On March 8, 2006, the Wisconsin legislature voted to increase the renewable portfolio requirements the legislature first established in 1999. The bill, SB 459, is expected to be signed into law by the Governor in the near future.
Under the law in effect since 1999, investor-owned electric utilities, municipal electric utilities, and rural electric cooperatives (“electric providers”) were required to provide a minimum, and minimal, percentage of the power they sold from renewable resources. This percentage began with 0.5% in 2001 and escalated by small increments to only 2.2% in 2011. Wis. Stat. §196.378 (2005). These requirements could be met through the purchase of renewable resource credits, or “RRCs.”
SB 459 both increases the minimum percentage and extends the program into 2015 and beyond. Under SB 459, each electric provider must increase its renewable energy percentage by at least 2 percentage points above its baseline percentage by 2010. The baseline percentage for each electric provider is the average of the energy provider’s renewable energy percentage for 2001, 2002, 2003. By 2015, each electric provider must increase its renewable energy percentage so that it is at least 6 percentage points above its base line percentage. Electric providers are not permitted to decrease their renewable energy percentages.
The bill also requires state agencies to obtain 10% of their energy from renewable sources by December 31, 2007 and 20% of their energy from renewable resources by December 31, 2011.
With the exception of the definition of biomass, and subject to the effect of in-service dates discussed below, the definition of renewable source remains unchanged. Renewable resources include resources that derive electricity from fuel cells that use a renewable fuel, tidal or wave action, solar thermal eclectic or photovoltaic energy, wind power, geothermal technology, biomass, and hydro facilities placed in service on or after January 31, 1998, provided that the hydro facility has a capacity of less than 60 megawatts. Under the 1999 law, biomass included refuse derived fuels used by renewable facilities that were in service in Wisconsin before January 1, 1998. The new law extends the use of refusederived fuels to out-of-state facilities that were in service before that date.
SB 459 provides for more detail regarding the creation and trading of RRCs, and compliance requirements. Most notably, SB 459 limits the amount of renewable resource credits created by a renewable facility placed into service before January 1, 2004 to the incremental increase in output that is due to capacity improvements made on or after January 1, 2004. RRCs created under prior law may not be used after 2011. Unless the Wisconsin Public Utilities Commission rules otherwise, RRCs created under SB 459 may not be used after the 4th year after the year in which the credit is created. Annual compliance reports submitted by electric providers may now contain detail of the suppliers and amounts of renewable energy and must contain the electric provider’s implementation plans for future compliance. Electric providers may petition for a delay in compliance reporting deadlines if, notwithstanding reasonable efforts to prevent the same, compliance would result in undesirable impacts on reliability or unreasonable increases in rates, or if delay in compliance results from failure of a renewable energy project to obtain required approvals or from failure to secure transmission service.
The Wisconsin Public Utilities Commission is required to prepare a report to the governor and legislature in every even-numbered year evaluating the impact of the renewable portfolio requirements on the rates and revenue requirements of electric providers and comparing that impact with the impact that would have been realized if renewable energy practices were subject only to market forces.
Lastly, SB 459 sets a goal that, by December 31, 2015, 10% of all electric energy consumed in the state shall come from renewable sources. The Wisconsin Public Utilities Commission is required to prepare a report in 2016 indicating whether that goal has been reached. If the goal is not reached, the commission is instructed to indicate why the goal was not achieved and how it may be achieved in future.