Tuesday, December 6th, 2016

Nobody buying what the PSC is selling on the global warming bill

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Supporters of the proposed global warming bill in Wisconsin have been hyping an “analysis” by the Public Service Commission which claims the bill will actually lower energy costs.  Nobody else is buying it.

In the hours after the substitute amendment was introduced, the Public Service Commission quickly passed judgment on the 150 page substitute announcing it would save Wisconsin energy ratepayers $1.4 billion between now and 2025. The Evelyn Woods speed-reading graduates echoed the bill’s proponents flawlessly in their enthusiasm for the global warming bill.

Interestingly, the PSC analysis claims the substitute amendment would result in greater savings in energy costs than the original bill because the substitute lowers the renewable portfolio standard (RPS) for six energy providers and two wholesalers. It does not answer the question that if lowering the minimum required renewable portfolio standard will result in lower utility costs, why would having any renewable portfolio standard mean lower utility costs than if there was no standard?

The PSC analysis also still relies on passage of a federal carbon emissions tax to justify their claims of lower rates for electricity. It says,

Although bills increase over time for the average ratepayer under all scenarios, they increase more under the status quo than under the CEJA or CEJA Sub scenarios if CO2 compliance costs equal $10/ton or more.

Some in the legislature just aren’t buying the PSC analysis, including State Senate Majority Leader Russ Decker (D-Weston), who remains “adamantly opposed” to utility rate increases. When asked by WisPolitics if the current version of the bill does that, he said yes. He also said he does not believe the global warming bill currently has the votes to pass the State Senate.

Despite Decker’s belief the Senate will not pass the bill, Assembly Speaker Mike Sheridan has scheduled a vote on Tuesday for the bill. It will be interesting to see if the Hraychuk story was a harbinger of trouble for the bill in the Assembly, too.

Business groups are not impressed with the PSC analysis, either. The Wisconsin Industrial Energy Group (WIEG) says the 25% renewable energy requirement will raise utility rates, despite what the PSC claims. Citing the necessary $15 billion in infrastructure investment that will be required to meet the renewable energy mandates, WIEG expects those costs will be passed along to consumers.

WIEG says utilities in Iowa and Minnesota are already raising rates to meet their renewable energy mandates. Otter Tail Power in Minnesota recently asked for a double-digit increase, with over half of that increase due to Otter Tail Power’s new wind power generation.

Rate increases are what legislators should reasonably expect. After all, no form of renewable energy as defined by the bill is cheaper than the current means of power production. If they were less expensive, power utilities would be using those renewable energy resources now.  By mandating use of the more expensive and less-efficient renewable energy sources, the state will guarantee rate increases.

Independent analysis of the state global warming bill has shown individual ratepayers can expect $1000 per year in higher utility costs.

You’ll want to read the whole thing at the MacIver Institute website.

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