Advocates say wind projects in jeopardy; Bill would end expiration of energy tax credits 

As wind turbines and towers begin rising northeast of Madison this week on what will be the state’s largest wind farm, advocates say a new bill could make it the last renewable energy project in Wisconsin for years to come.

Renewable energy supporters say the proposal, coupled with a plan to import hydroelectric power from Canada and new moves to restrict the location of wind turbines, amounts to a “stealth campaign” to repeal a requirement that 10% of the state’s electricity must come from renewable sources by 2015.

“This is not a minor revision to the renewable standard. It opens a gaping hole in the policy and undermines the policy,” said Lee Cullen, a lawyer who represents the Wisconsin Energy Business Association, a consortium of more than 60 wind component manufacturers, project developers and construction firms.

The proposal, Assembly Bill 146, would prevent the expiration of energy “credits” that are earned by utilities when they invest in renewable energy projects that exceed what’s required by the mandate in a given year. Currently, those credits expire after four years, a system designed to encourage ongoing development of clean energy such as wind and solar power.

Utilities agreed to a cap on the credits five years ago when the renewable energy mandate, known as Act 141, was passed. But they say ending the caps would lower the costs of complying with the mandate.

“That was something we agreed on at the time, but the landscape is significantly different today,” said William Skewes, head of the Wisconsin Utilities Association, which represents the state’s investor-owned utilities. “The atmosphere in Wisconsin for building renewable energy project is certainly not what it was when Act 141 was passed.”

Since the bill was passed, the state has experienced a recession, political control has changed in Madison, and attitudes toward renewable energy have shifted, Skewes said.

“Wisconsin utility customers have invested in renewable energy, and the value of the credits created by that renewable energy should not expire,” he said.

Wisconsin’s reversal on renewable energy was discussed during a panel session this week at the American Wind Energy Association’s annual conference in California, where the state has adopted a renewable-energy target of 33%.

“There’s no reason to do this at a time when we should be looking to create jobs and grow the clean energy economy,” said Jeff Anthony, the wind energy association’s director of business development. “This is continuing to take Wisconsin in exactly the opposite direction from many, many states elsewhere in the country.”

Most states that have adopted green energy standards have requirements that are more aggressive than Wisconsin’s. Nearly all of them also place some sort of cap or expiration date on the use of credits.

We Energies supports the renewable credits bill, although a company spokesman said its passage wouldn’t make a big difference in helping the utility meet the 2015 renewable energy mandate.

We Energies built the Blue Sky Green Field wind project several years ago and expects the construction of towers to start this week at the $367 million, 90-turbine Glacier Hills Wind Park in Columbia County northeast of Madison.

If the company also proceeds with building a biomass power plant in Rothschild, it will be on track to comply with the renewable energy mandate, which requires the state’s largest power company to supply more than 8% of its electricity from renewable sources in 2015 and thereafter.

Wisconsin’s renewable energy mandate requires utilities to increase the amount of renewable energy as utility sales grow. Based on its latest estimates, We Energies would need to build or buy more renewable energy by late 2016 or 2017 to remain in compliance, spokesman Brian Manthey said.

Manthey said the bill eliminating a cap on credits would not necessarily be a deterrent to adding more renewable energy.

“The ability to be able to gain more credits for future use, and properly reward early action by producing more renewables than are actually mandated, is a good thing from a renewable energy standpoint,” he said.

But the bill, which was introduced late last week, would be a big departure from the way nearly every other state with a renewable energy standard operates, said Cullen.

“Almost no state does this,” he said. “The whole purpose of the policy is to induce utilities to continually invest in renewable energy – not just once and for all.”

Supporters of the rollback note that utilities already are investing billions of dollars in wind power projects.

Todd Stuart, executive director of the Wisconsin Industrial Energy Group, said the bill “makes a lot of sense, and should help provide some flexibility and a little bit of cost relief.”

But wind power proponents say wind energy will stabilize rates for customers, given there is no fuel cost for wind power. Meanwhile, they say, the cost of coal continues to climb, and utilities are spending billions to install scrubbers to reduce mercury and air pollution linked to the burning of coal.

In documents circulated to Wisconsin legislators, the Wisconsin Energy Business Association, American Wind Energy Association and the wind power group Wind on the Wires said the state is too dependent on fossil fuels, which supply 73% of the state’s energy needs.

“This over-reliance on fossil fuels puts the state at risk of inevitable fuel price spikes in the future. Wisconsin has no fossil fuels, and every year has to spend billions of dollars to pay for coal and natural gas,” the groups said.

Separately, a bill that would allow hydroelectric power from large dams to qualify as “renewable” under Wisconsin’s mandate has passed the state Senate and is awaiting final passage in the Assembly. On Wednesday, Manitoba Hydro announced that it had signed an agreement with Wisconsin Public Service Corp. of Green Bay to sell 100 megawatts of power from a new dam in Manitoba. It was part of a package of power sales that will yield $4 billion for Manitoba Hydro.

Earlier this year, two wind energy firms said they were canceling or postponing development work on three major Wisconsin wind farms. The decision came after Gov. Scott Walker unveiled a property rights bill requiring turbines to be built farther from nearby homes, and the Legislature blocked the implementation of a statewide rule developed by the state Public Service Commission regarding wind turbine locations.

“In order for a business to thrive in our state, especially one on the cutting edge of technology and innovation, it needs a regulatory system that supports it and encourages growth,” said Jeff Ehlers, president of Renewegy, an Oshkosh manufacturer of small wind turbines. “Unfortunately, by eliminating the expiration of renewable energy credits, (the bill) provides a disincentive to growth in the renewable energy industry.”