Monday, December 5th, 2016

Doyle-era hidden tax rolled back

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One of the hidden costs of doing business in Wisconsin is the unnecessary renewable energy programs that are mandated by the state. The costs for these programs are paid by the ratepayers through higher energy bills. Fortunately, the Joint Finance Committee rolled back an attempt by the Jim Doyle-era Public Service Commission (ironically, the agency charged with protecting consumers from predatory rate increases) to dramatically increase the energy program mandated contributions from utility companies, costs that would have been passed directly to the residential and business consumer. This week at the MacIver Institute I commented on this welcome change.

State Representative Robin Vos, co-chairman of the Joint Finance Committee, explained in an interview with the Wisconsin Radio Network how the mandated contribution from energy companies works,:

“The way Focus on Energy works, especially for residential customers, everyone in this room pays higher electricity costs so that some people can get things for free.,” said Vos. “That’s the way Focus on Energy works primarily. There are a small number of people who will get that grant and if you are lucky enough to be one of them, perhaps it is a good deal for you.”

The PSC estimated energy ratepayers would see an increase of 4.3% in their energy bills by 2014 if the increased mandated contribution from the energy companies was allowed to stand. Supporters of programs like Focus on Energy claim that energy costs will go down with the improved energy efficiency. The PSC itself estimates that energy costs will decline after 2014.

However, the Legislative Fiscal Bureau said the costs for energy consumption would go down only for those participating in the program. Ratepayers as a whole would continue to subsidize lower energy costs for some through higher rates.

Despite the redistributive nature of the program, the JFC did not kill the program entirely. Instead they left intact the increase for this year in the program while returning the program next year to funding at the level prior to last December’s increase. That means the state will still spend around $100 million of the energy ratepayers’ money annually on energy efficiency and renewable energy programs.

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