Enhanced Renewable Portfolio Standard

Current Law

• 1999 Wisconsin Act 9, among other things, created a renewable portfolio standard, which requires electric utilities and retail electric cooperatives sell minimum amounts of electricity from renewable sources. The RPS established by Act 9 would reach 2.2 percent by 2011.
• 2005 Wisconsin Act 141 modified the previous RPS. Act 141 established baselines, based on an electric provider’s 2001-2003 annual sales of renewable electricity, and requires that, by 2010, an electric provider increase its annual sales of renewable electricity by two percentage points above its baseline. Act 141 set the RPS to 10 percent by 2015.

Proposed Renewable Portfolio Standard

• Legislative Findings (Wis. Stat. 196.378 (1g); Section 170, p. 101-02)
  
  • It is essential to the health and safety and economic well−being of Wisconsin that the state maintain a highly reliable electric system at all times.
  • Increased reliance on out−of−state electric generation dependent on long−distance transmission of electricity to deliver the electricity to Wisconsin creates reliability and congestion cost risks that are significantly greater than reliance on electric generation located in Wisconsin at or near centers of demand for electricity.
  • Historically, Wisconsin has relied on imports of electricity from other statesfor about 15 percent of the state’s electricity needs.
  • It is essential to the health and safety and economic well−being of Wisconsin that the state take actions to mitigate global climate change from emissions of greenhouse gasses. Central to such mitigation efforts is reducing reliance on electricity produced from fossil fuels through policies such as the renewable portfolio standard.
  • As of the effective date of this law, the most abundant and affordable sources of electricity that can be used to comply with the renewable portfolio standard are wind resources in western Minnesota, the Dakotas, and Iowa. Extensive reliance on these resources for compliance with the renewable portfolio standard will produce a significant increase in dependence on imported electricity with the associated reliability and congestion cost risks.
  • To balance the competing imperatives of maintaining the reliability of the electric system and reducing dependence on electricity produced from fossil fuels, it is essential that Wisconsin adopt a renewable portfolio standard that requires at least in part the production of electricity from renewable resources in this state.

New Renewable Portfolio Standard (Wis. Stat. § 196.378(2)(a); Sections 179-86; pp. 103-06)

• Amends the current goal of 10 percent electric energy consumed in the state from renewable energy by 2015 to 2013.
• Increases the renewable energy goal to 20 percent by 2020 and 25 percent by 2025.
• Also requires that 6 percent of all electric energy consumed in the state be generated by renewable facilities located in this state by 2020, and 10 percent by 2025.
• Requires that by 2020 each electric provider increase its renewable energy percentage so that it is at least 16 percentage points above the electric provider’s baseline renewable percentage and shall ensure that its in-state percentage is not less than 30 percent of the renewable energy percentage.
• For the years 2021, 2022, 2023, and 2024, each electric provider may not decrease its renewable energy percentage below the electric provider’s renewable energy percentage and may not decrease its in−state percentage below the electric provider’s in−state percentage required this section.
• For the year 2025, each electric provider shall increase its renewable energy percentage so that it is at least 21 percentage points above the electric provider’s baseline renewable percentage and shall ensure that its in−state percentage is not less than 40 percent of the renewable energy percentage required under subd. 2. f.
• For each year after 2025, each electric provider may not decrease its renewable energy percentage below the electric provider’s renewable energy percentage required under subd. 2. h. and may not decrease its in−state percentage below the electric provider’s in−state percentage required under subd. 2. h.

Energy Sources Deemed “Renewable” (Wis. Stat. § 196.378 (2) (b) 1r.; Section 190; p. 107)

• Hydroelectric Energy (Manitoba Hydro):
  
  • (1.r. a.) Except as provided in subd. 1r. b. and c., an electric provider may not include in its renewable energy percentage any renewable resource credits associated with electricity derived from a hydroelectric facility that has a rated capacity of more than 60 megawatts.
  • (1.r.b.) Except as provided in subd. 1r. c., an electric provider may include in its renewable energy percentage renewable resource credits associated with electricity generated after December 31, 2013, from a hydroelectric facility located outside this state that has a rated capacity of more than 60 megawatts and that is first placed in service on or after the effective date of this bill.
  • (1.r.c.) Renewable resource credits associated with electricity derived from a hydroelectric facility that is located in Manitoba, Canada, that has a rated capacity of more than 60 megawatts, and that is first placed in service on or after the effective date of this bill, may be included in a renewable energy percentage only if the province of Manitoba has informed the commission in writing that the interim licenses under which the Lake Winnipeg Regulation Project and the Churchill River Diversion Project were operating on the effective date of this bill have been replaced by final licenses and that those projects have received all final approvals, licenses, and permits applicable to them under Canadian law and only if the commission determines that such final licenses and any other actions taken by the province of Manitoba or Manitoba Hydro−Electric Board constitute a reasonable resolution of the concerns of the First Nations affected by those projects.
• Solid Waste (Wis. Stat. § 196.378 (1r) (fg); Section 174; p. 103)
  
  • The combustion of refuse-derived fuel in a facility that was in service before January 1, 1998.
  • The combustion of solid waste that has been subject to a process to remove recyclable and noncombustible materials in a facility that is owned by a count in this state that was in service before Jan. 1, 1998.
• Nonelectric Energy (Wis. Stat. §§ 196.378 (1r) (dm) and (3m) 196.378 (3m); Sections 172 & 202; pp. 102-3; 114).
  
  • “Nonelectric energy” means any of the following types of energy produced or generated at a facility located in this state and placed in service on or after the law takes effect, but only if the energy displaces fossil fuel use in this state:
    
    • The thermal output from a cogeneration production plant, as defined in s. 79.005 (1g).
    • The thermal output from a biomass−fueled boiler, but only if, after the effective date of this subdivision . [LRB inserts date], the boiler was converted from a fossil fuel−fueled boiler to a biomass−fueled boiler.
    • The thermal output of a geothermal system.
    • Biogas that is put into a natural gas transmission or distribution pipeline.
    • The thermal output of a solar water heating system.
    • Useable light delivered by a solar light pipe.
  • Energy derived from other applications, specified by the commission by rule, that produce energy other than electricity from renewable resources. The commission shall promulgate rules allowing an electric provider to include in its renewable energy percentage for a year the megawatt hour equivalent of nonelectric energy produced or generated by the electric provider in the year. The commission shall also promulgate rules allowing any person, including an electric provider, to create a certificate documenting the megawatt hour equivalent of nonelectric energy produced or generated by the person in a year and to sell the certificate to an electric provider for inclusion in the electric provider’s renewable energy percentage for that year. An electric provider who purchases a certificate may sell the certificate to another electric provider, but a certificate may be included in an electric provider’s renewable energy percentage only in the year that the nonelectric energy documented by the certificate was generated. There is no limit on the number of sales in a year by electric provider.
    
    • The rules promulgated under this section shall include requirements and procedures for determining the megawatt hour equivalent of nonelectric energy., measuring and verifying nonelectric energy, and demonstrating that nonelectric energy has displaced fossil fuel use in this state.
• Renewable Resource Credits (Wis. Stat. § 196.378 (3); Section 201; pp. 111-112)
  • Whenever a person generates renewable energy, the person creates renewable resource credits in an amount equal to one credit for each megawatt hour of renewable energy generated. A person that generates renewable energy may do any of the following:
    • Sell the renewable energy and the associated renewable resource credits to any other person. For renewable energy that is sold at wholesale in this state, the sale is considered to include the associated renewable resource credits unless an agreement between the parties specifies otherwise.
    • Separate the renewable resource credits from the renewable energy and sell, trade, transfer, assign, bank for future use, or permanently retire the credits or, if the person is an electric provider, elect to use the credits in the electric provider’s renewable energy percentage.
  • A person that purchases renewable energy from which the associated renewable resource credits have not been separated may take any of the actions described in subds. 1. a. and b.
  • A person that purchases renewable resource credits may sell, trade, transfer, assign, bank for future use, or permanently retire the credits, or, if the person is an electric provider, elect to use the credits in the electric provider’s renewable energy percentage.
  • An electric provider may use renewable resource credits created by the generation of renewable energy outside this state in the electric provider’s renewable energy percentage if the credits are documented in a regional renewable resource credit tracking system designated by the commission in rules promulgated under par. (b) and the credits satisfy the requirements of this subsection and the rules promulgated under par. (b).
  • An electric provider may not use a renewable resource credit in the electric provider’s renewable energy percentage if the renewable resource credit or renewable energy from which the credit has been separated has been used to comply with the renewable energy requirements of another state.
  • An electric provider may not use renewable resource credits created by the generation of renewable energy outside this state to comply with an in−state percentage requirement of the renewable portfolio standard.
  • A renewable resource credit does not expire until an electric provider uses the credit in the electric provider’s renewable energy percentage or the owner of the credit retires the credit.
  • The commission shall promulgate rules that establish requirements and procedures for creating, selling, trading, transferring, assigning, banking, and retiring renewable resource credits, for an electric provider’s use of renewable resource credits in the electric provider’s renewable energy percentage, and for tracking renewable resource credits under a regional renewable resource credit tracking system designated by the commission.
  • The commission shall promulgate rules that allow an electric provider to include in the electric provider’s renewable energy percentage renewable energy generated by the electric provider from which the electric provider does not separate renewable resource credits.
• Other Provisions:
  • Calculations Related to Co-Fired or Cogeneration Facilities (Wis. Stat. 196.378 (2) (bm); Section 194; pp. 108):
    • “Energy content ratio” means, with respect to a facility, the ratio in which the numerator is the energy content of the biomass, solid waste, refuse−derived fuel, or any combination of biomass, solid waste, or refuse−derived fuel, that is burned by the facility and the denominator is the energy content of the fossil fuel and the biomass, solid waste, refuse−derived fuel, or any combination of biomass, solid waste, or refuse−derived fuel, that is burned by the facility.
    • “Facility” means a facility that burns a fossil fuel and also burns biomass, solid waste, refuse−derived fuel, or any combination of biomass, solid waste, or refuse−derived fuel.
    • The amount of renewable resource credits associated with electricity supplied by a facility that may be included in a renewable energy percentage shall be an amount equal to the product of the facility’s energy content ratio and the total amount of the electricity generated by the facility that is sold at retail.
    • The amount of renewable resource credits associated with thermal energy supplied by a facility that may be included in a renewable energy percentage shall be an amount equal to the product of the facility’s energy content ratio and the total amount of thermal energy that is produced by the facility.
• Public Service Commission Report and Rules (Section 9141; pp. 170-172)
  • Renewable Portfolio Standard Report
    • The public service commission shall study options for ensuring that electric providers are able to comply with the renewable portfolio standard, including options for doing all of the following with regard to renewable energy construction projects:
    • Streamlining the regulatory approval and siting process.
    • Encouraging proposals that encompass multiple projects, with multiproject, integrative plans for the acquisition of sites, equipment, and contractors.
    • Approving multi-year commitments for the acquisition of necessary equipment in a timely manner, with appropriate recovery of development costs.
    • Encouraging larger electric providers to partner with smaller electric providers.
  • No later than 6 months after the effective date of this paragraph, the public service commission shall submit a report to the legislature and governor under section 13.172 (2) of the statutes that describes the actions the commission has taken or proposes to take to implement the options specified in paragraph (b) and any recommendations for legislation necessary to fully implement the options.
  • Nonelectric Energy Rules
    • The public service commission shall submit in proposed form the rules required under section 196.378 (3m) (a) of the statutes, as created by this act, to the legislative council staff under section 227.15 (1) of the statutes no later than the first day of the 6th month beginning after the effective date of this subsection.
  • Large Energy Customer Program Rules
    • The public service commission shall study the rules it has promulgated under section 196.374 (3) (f) 3. of the statutes to determine whether the rules provide adequate opportunities for creating programs under section 196.374 (2) (c) of the statutes. No later than 6 months after the effective date of this subsection, the public service commission shall submit a report to the legislature in the manner provided under section 13.172 (2) of the statutes and to the governor that describes the commission’s findings and the actions the commission has taken or intends to take to correct any deficiencies in the rules.
• Wind Turbine/Transportation Report (Section 9150; p. 172-173)
  • The department of transportation shall review regulatory barriers to the transport over the highways in this state of wind turbine components. No later than 6 months after the effective date of this subsection, the department shall submit a report to the legislature and governor under section 13.172 (2) of the statutes that describes the actions the department has taken to remove such barriers and any recommendations for legislation necessary to fully remove such barriers.
  • Advisory Committee
    • The department of transportation, in consultation with the department of natural resources, shall appoint a technical advisory committee under sections 15.04 (1) (c) and 227.13 of the statutes to make recommendations to the department of transportation on the factors to be considered, and the methodology to be used, in preparing evaluations required under section 85.021 (2) (a) of the statutes, as created by this act. These evaluations shall take into consideration all of the factors specified in section 85.021 (2) (b) of the statutes, as created by this act.
    • The technical advisory committee shall make recommendations to the department of transportation on setting a monetary value for greenhouse gas emissions and energy use, based on factors such as social costs, market rates for carbon credits, and energy costs.
    • If the department of transportation completes its final 2030 plan, as defined in section 85.021 (1) (e) of the statutes, as created by this act, prior to the effective date of this subsection, the department shall revise the final 2030 plan to incorporate the requirement specified in section 85.021 (3) of the statutes, as created by this act.
    • Rules Relating to Transportation Projects. The department of the effective date of this subsection. transportation shall submit in proposed form the rules required under section 85.021 (4) of the statutes, as created by this act, to the legislative council staff under section 227.15 (1) of the statutes no later than the first day of the 18th month beginning after