RENEW Wisconsin Calls for Advanced Renewable Tariffs

RENEW Wisconsin filed testimony with the Wisconsin Public Service Commission (PSC) last month calling for implementation of Advanced Renewable Tariffs (ARTs) in the state by January 1, 2008. The move is the first formal action by a non-governmental organization in the U.S to urge adoption of the policy mechanism used in Germany, France and other countries to successfully spur rapid development of renewable energy.

Michael Vickerman, RENEW Wisconsin’s executive director, submitted testimony to the PSC in two separate proceedings challenging the commission’s buy-back rates for distributed generation. He testified that RENEW favors setting fixed rates or tariffs for distributed generation based on the cost of production of each renewable technology — and does not support basing tariffs on the wholesale price of electricity. Though a small step in itself, Vickerman’s PSC testimony could set a precedent in the U.S. since RENEW Wisconsin’s position is a significant departure from the position of most American non-governmental organizations involved in utility rate cases. RENEW also submitted an exhibit outlining detailed categories of tariffs for each technology and a manner in which the specific tariffs can be determined. According to RENEW’s filing, the rates would have the following attributes: — Simple, comprehensible and transparent — Fixed prices sufficient to drive development — Lengths sufficient for profitability — Prices differentiated by technology These are the principle elements of Advanced Renewable Tariffs as used in France and Germany. RENEW proposed that the tariffs be limited to customer-sited generation with caps on the project size of each technology. — Solar Electric: 1 megawatt (MW) — Biogas/Biomass: 1 MW — Wind: 2 MW The proposal also limits total program size to only 10 MW. This contrasts with that in Ontario, Canada where project size is limited to 10 MW and there are no program caps. “The rates would be set in accordance with the expected production costs associated with each technology and as well the size of the installation. In our view, fixed rates have shown to be singularly effective in giving prospective distributed generators the confidence they need to invest in socially desirable generating technologies that yield modest annual returns over a long period of time,” stated Vickerman in his testimony. “Feed-in tariffs have been the driving force behind the extraordinary penetration of solar, wind and biogas installations in nations like Germany and Spain.” Currently WE Energies is the only Wisconsin utility that has a renewable tariff for solar photovoltaics and it is the only utility in the country with a true renewable tariff. WE Energies pays $0.225 per kilowatt-hour (kWh) for solar-generated electricity for a period of 10 years. As in the German and French programs, the utility only pays for the export of electricity. There is no net metering. Some programs in the U.S. pay an incentive based on the production of solar electricity but rely on net metering for the program to function. Washington state will pay as much as $0.54/kWh for solar electricity from equipment manufactured in the state and will do so for eight years. The incentive is in addition to net metering. Vickerman’s testimony called on the PSC to convene a hearing docket specifically to investigate Advanced Renewable Tariffs. Doing so, said Vickerman, would produce a hearing record sufficient to develop policies based on the evidence provided. He noted, however, that a formal proceeding may be too unwieldy to produce the policies needed in the two-year time frame proposed. He suggested as an alternative that the PSC organize a technical conference on the topic to examine the details in a less formal manner. RENEW’s filing explains that the key features of a Wisconsin feed law that need to be defined are: — Duration of tariff payments (10 year minimum) — Specific tariffs by technology and project size — Provisions for adjusting the tariffs over time — Maximum project size (project caps) — Maximum subscription levels (program caps) Though other states have privately and publicly discussed implementing a feed law for distributed generation, notably Oregon, RENEW Wisconsin’s filing is the first formal announcement of a campaign for such a program in the U.S. About the author… Paul Gipe has written extensively about wind energy for both the popular and trade press. He has lectured widely in Europe, North America and the South Pacific on wind energy and how to minimize its impact on the environment and the communities of which it is a part. In 2004, he served as the acting executive director of the Ontario Sustainable Energy Association where he created, managed, and implemented a provincial campaign for Advanced Renewable Tariffs. He is the author of numerous wind power books, including Wind Energy Comes of Age.
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