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Friday, January 29, 2010

Hearing on Clean Energy Jobs Act bill trivialized Advanced Renewable Tariffs

January 28, 2010

Senator Jeff Plale
Room 313 South, State Capitol
Madison, WI 53708

Senator Mark Miller
Room 317 East, State Capitol
Madison, WI 53708

Dear Senators Miller and Plale:

Thank you for holding a hearing yesterday of the Select Committee on Clean Energy on SB 450 (the Clean Energy Jobs Act bill). You heard a great deal of substantive commentary about much of the bill, particularly the sections dealing with energy efficiency and the expanded Renewable Energy Standard.

Unfortunately, the same cannot be said for the discussion on the proposal to institute Advanced Renewable Tariffs in Wisconsin. Early in the hearing, a speaker framed the issue as “asking a little old lady in Cudahy to subsidize an expensive system in Mequon.” From that point, the discussion devolved into a kind of semi-orchestrated gang-tackling on this issue that continued unabated until I was called upon to speak, some seven hours and forty five minutes after the hearing began. While RENEW members who work for or with solar, wind and biogas energy installation companies were present during the hearing and had registered to speak, none were called prior to myself. All but two (Full Spectrum Solar and Ed Ritger) had to leave before the hearing ended.

Now, I don’t believe the first speaker, a labor leader, had intended to belittle the companies that install customer-sited renewable energy systems or dismiss their contribution to Wisconsin’s economy and environment. Nevertheless, the “little old lady from Cudahy” theme took a life of its own, and as a result, the very important issues of how to support these systems through utility rates and whether these rates should be mandated had become thoroughly trivialized by the end.

Allow me to repeat some of the points I made at yesterday’s hearing:

1. The vast majority of the distributed renewable generating units installed in Wisconsin serve schools, dairy farms and other small businesses, churches and local governments.

2. Utilities are not in the business of installing these systems themselves.

3. In many cases the renewable energy installation went forward because there was a special buyback rate available to accelerate the recovery of the original investment made by the customer. Yesterday, I gave the example of the Dane County community anaerobic digester project that, once operational, will treat manure taken from several nearby dairy farms in the Waunakee area and produce two megawatts of electricity with it. The electricity will be purchased by Alliant Energy through a voluntary biogas tariff worth 9.3 cents/kWh. Unfortunately, Alliant’s biogas program is fully subscribed and is no longer available to other dairy farmers, food processing companies and wastewater treatment facilities served by Alliant.

4. Companies that install solar, wind and biogas energy systems are quintessentially small businesses, many of them family-owned. Renewable energy contractors and affiliated service providers constitute one of the few market sectors where young adults who have acquired the necessary skills to do the job well can find meaningful work at decent pay.

5. By its very nature, distributed renewable energy delivers nearly 100% of its economic punch to the local economy.

In stark contrast to other states, Wisconsin has a well developed market structure for supporting small-scale renewables. Through the ratepayer-funded Focus on Energy program, there is in Wisconsin a human infrastructure that trains and educates thousands of young people to work in the renewable energy arena. Indeed, Wisconsin is a leader in this area. Our expectation is that these workers will apply their skills in the state, fabricating and installing renewable energy equipment in a thoroughly professional manner.

But if we don’t take equal care to create and sustain demand for their skills and services, these workers are apt to leave the state for greener pastures, and Wisconsin’s investment in their education will have gone unpaid. This is why the issue of Advanced Renewable Tariffs is so important to RENEW members.

The question of how to sustain and broaden the distributed generation marketplace is a serious matter that deserves careful consideration by the Legislature. As I mentioned yesterday, RENEW Wisconsin has a wealth of experience and expertise in designing forward-looking renewable energy policies, examples being the Act 141 renewable energy standard and We Energies’ voluntary renewable energy program, the most ambitious and innovative of its kind in the state.

We at RENEW would greatly appreciate the opportunity to meet with you and suggest some alternative approaches in the Advanced Renewable tariffs section that we believe would end the impasse between utilities and clean energy advocates and put the distributed energy sector on a sustainable growth trajectory. We would like very much the opportunity to discuss our alternative approach and provide any assistance you require in forging an acceptable compromise with the utilities.

One final point: yesterday you heard several utilities recommend that the Legislature strip out the Advanced Renewables Tariff section. RENEW urges you not to heed their advice. While we would support a reworking of this section, we cannot support abandoning this initiative altogether and cannot further support a bill that is silent on policies to advance the distributed energy marketplace. That is a bottom-line priority with us.


Sincerely,


Michael Vickerman
Executive Director

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