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<title>March 2006: Wisconsin Legislature Increases RPS Requirements</title>
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<p align="left"><strong><small><font face="Arial">About The Author:</font></small></strong></p>
<p align="left"><font face="Arial" style="font-size: 9pt">Robert A. Olson is a partner in the law firm of
Brown, Olson & Gould, P.C. which maintains a nationwide practice in energy law,
public utility law and related commercial transactions.</font></p>
<p><small><font face="Arial"><font style="font-size: 9pt">He can be reached at:</font><br>
<br>
<b><font color="#0000FF">Brown, Olson & Gould, PC</font></b><br>
2 Delta Drive<br>
Suite 301<br>
Concord, NH 03301<br>
<a href="mailto:[email protected]">[email protected]</a><br>
(603) 225-9716<br>
<a href="mailto:[email protected]"></a></font></small></p>
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<p ALIGN="left"><b><u><br>
<br>
March 2006</u></b><font size="6"><b><br>
WISCONSIN LEGISLATURE INCREASES RPS REQUIREMENTS<br>
</b></font><strong>by Robert Olson and
</strong><b>David J. Shulock</b><strong> -- Brown, Olson and Wilson, P.C.<br>
</strong><font face="Arial" size="2">(<em>originally published by PMA OnLine Magazine:
2006</em>/04/1)<br>
</font></p>
<p class="MsoNormal" style="text-autospace: none" align="left">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.</p>
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<p class="MsoNormal" style="text-autospace: none" align="left">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.”</p>
<center>
<p class="MsoNormal" style="text-autospace: none" align="left">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.</p>
<center>
<p class="MsoNormal" style="text-autospace: none" align="left">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.</p>
<center>
<p class="MsoNormal" style="text-autospace: none" align="left">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.</p>
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<p class="MsoNormal" style="text-autospace: none" align="left">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.</p>
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<p class="MsoNormal" style="text-autospace: none" align="left">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.</p>
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<p class="MsoNormal" style="text-autospace: none" align="left">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.</p>
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<blockquote>
<p align="left"><font face="Arial">
<small>Robert A. Olson is a partner in the law firm of Brown, Olson &
Gould P.C.
which maintains a nationwide practice in energy law, public utility law and related
commercial transactions. He can be reached at:</small></font><p align="center">
<font face="Arial"><small><font color="#0000FF"><b>Brown, Olson & Gould, PC</b></font><br>
2 Delta Drive, Suite 301<br>
Concord, NH 03301 <br>
<br>
<a href="mailto:[email protected]">[email protected]</a> | (603) 225-9716<a href="mailto:[email protected]"></a></small></font>
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