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Friday, March 26, 2010

Letter writer asks Sen. Schultz to support Clean Energy Jobs Act

From a letter to State Senator Dale Schultz from Shelly Laffin, RENEW Wisconsin's treasurer, who lives in Spring Green:

Dear Senator Schultz,

I recently learned from the Spring Green Home News that you do not support any provisions of the Clean Energy Jobs Act. Your district is distinctly suited to benefit from two parts of the Act in particular.

There are wind projects in Lafayette, Grant and Iowa counties that will be built if the Renewable Portfolio Standard is increased, especially with a mandated percentage of the energy projects to be built in Wisconsin. Wind projects in those counties not only will supply clean energy and jobs, but local towns and counties will receive annual payments. I am sure you know that the local economies in those areas are depressed and would materially benefit. Wind projects are good neighbors, which I’m also sure you are aware of, based on the ten year operating history of the Montfort Wind Farm in Iowa County.

Another critical provision in the Act is the Advanced Renewable Tariff component. While I see that you support tax credits for food processing plant modernization, you perhaps have not made the linkage to food processing waste and energy generation that many cheese plants would like to incorporate in their operations. Several cheese companies are considering anaerobic digestion for their plants (in your district), but cannot make the financial aspects work without an advanced renewable tariff as a standard offer. Grants are fine, but they work best to support technologies in initial stages of market development, rather than as a permanent feature to sustain a market. Preliminary analysis has been done on the cost of advanced renewable tariffs that could be offered by investor owned Wisconsin utilities (www.renewwisconsin.org). In offering approximately 11 cents per kilowatt hour, at a fully subscribed level of 1.5% of customer retail sales, the cost for a typical Wisconsin residential customer (~usage at 10,000 kilowatt hours per year) would average an extra 83 cents a month ($10.00 per year). The analysis uses the marginal amount that would be added to each investor owned utility’s current avoided cost. As the avoided cost rate continually increases over time, this marginal amount diminishes or disappears.

When I look at the Wisconsin State Capitol, the county courthouse in Lancaster and other early government projects, the investment in better building, better craftsmanship and better materials has stood the test of time. It is pitiful that we now exhibit such lack of vision that we cannot enthusiastically invest in Wisconsin’s future as our ancestors did. The two items I mentioned translate into local development, local jobs and local industry (ala Cuba City’s Wausaukee Composites – wind nacelle housings).

Wisconsin is currently the national leader in dairy farm digesters. The opportunity that comes from being a focal point in the country for anaerobic digestion technology will slip away, and has already begun to slip (federal digester funding targeted to New York state), without taking the next step – advanced renewable tariffs. The Focus on Energy Program has a very limited budget for renewables in general and this technology in particular. With a granting program, choices of winners and losers tend to be based on the program and state agency priorities, not necessarily the customer’s needs. DATCP does not have a RD&D budget to move farm digesters from being a large farm option to a viable mid-size farm option. Farms, in cooperation with investors, coops and using other business models could make the move themselves, with the assurance of an advanced renewable tariff. Wisconsin has already attracted the attention of German companies who would like to make investments in Wisconsin digester projects. And finally, Wisconsin is home to the company that has, by far, the most farm digester installations in the U.S. – GHD, Inc. in Chilton, Wisconsin. We would be crazy to forgo such a unique opportunity to support our agricultural community. I truly wish you could see it that way.

Another critical opportunity for Wisconsin is the promising mid-size wind industry. Several companies in eastern Wisconsin are obtaining UL listing for their equipment and are attracting investors to finance the building of small and mid-sized wind turbines in Wisconsin. Their chances of success improve greatly if there are buyback rates in Wisconsin to sustain consistent sales of wind equipment. Without the tariffs, Wisconsin is defaulting to wind turbines built in China. The industrial infrastructure is still in place that would make these companies viable, but the support of advanced renewable tariffs for small systems is critical.

The advanced renewable tariffs reward only equipment and projects that actually produce energy. As a contrast, grants are paid for projects whether they subsequently produce energy at the level promised, or do not. Higher buyback rates and tariffs do not pick and choose winners in the marketplace. They reward energy production - period. I fail to see why you would not support the advanced renewable tariff provision of the Clean Energy Jobs Act. The Wisconsin Distributed Resources Collaborative, with most of Wisconsin’s utilities as members, (www.wisconsindr.org) has investigated many options and administrative structures for advanced renewable tariffs over a range of cost recovery methods for utilities. Alliant Energy modeled its advanced renewable tariff offering (fully subscribed in less than a year) on tariff work done by the Wisconsin Distributed Resources Collaborative. By limiting tariff subscription levels and capping eligible project sizes, utilities and utility customers are protected from unmanageable financial impacts.

Wisconsin did not deregulate its retail electric utilities as did some other states in the 1990’s. Customer-based renewable electric projects are therefore restricted to selling energy to retail electric providers, at prices largely based on energy production from fully amortized coal plants. A variety of renewable energy businesses are in your district and will be able to thrive at a modest and controlled cost to utility customers. Small renewable companies in your district, such as Timmerman’s Talents, Platteville (solar and wind), point to the future growth and vigor that will be possible with support for renewable energy through an advanced tariff. There is no other energy policy on the horizon that would have more benefit for small growing renewable businesses.

I hope that you will reconsider your current position and support these two Clean Energy Jobs Act provisions.

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