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Wisconsin's Struggling Wind Sector Could Suffer Another Legislative Blow

Some advocates see a new bill that would end expiration of energy tax credits as strike three against Wisconsin's wobbly wind industry

Jun 6, 2011
Blue Sky Green Field Wind Farm

Includes correction added June 6

Wisconsin's clean energy industry is facing another rollback measure that could further stymie wind farm development and undermine the state's ability to meet renewable energy goals if it passes, advocates say.

Assembly Bill 146 would eliminate the four-year expiration date for renewable resource credits, also called renewable energy credits (RECs), that electricity providers can trade to meet state energy requirements within a given year. The measure would mean the RECs would never expire.

Wind industry officials say that a limited "shelf life" for RECs is necessary to encourage energy companies to commit to ongoing renewable energy development in the state. If RECs never expired, electricity providers could make a one-time purchase of credits and hold on to them indefinitely, they warn.

Under Wisconsin's renewable portfolio standard (RPS), 10 percent of electricity must come from renewables by 2015. Each credit represents 1 megawatt-hour of electricity generated from a cleaner energy source.

Supporters of the bill, which the Assembly's energy and utilities committee proposed in late May, say that the four-year cap is an unnecessary cost to ratepayers now that lawmakers have moved to restrict the location of wind turbines, essentially closing the door on new construction.

"When the RPS was originally passed [in 2006], the consensus was that allowing the credits to expire [after four years] would result in additional renewable generation being built in Wisconsin, such as wind farms, which would boost the 'green jobs' economy," Bill Skewes, executive director of the Wisconsin Utilities Association, said in a May 19 letter to legislators urging their sponsorship.

"Since that time, however, the environment for building wind in Wisconsin has changed dramatically. Rules for uniform wind-siting standards have been suspended and others have been proposed that would raise the bar even further, making Wisconsin a less attractive location than other states," Skewes said in a copy provided to SolveClimate News.

"Thus, the primary motivation for the expiration of RECs no longer exists."

Wind Siting Suspension Sets Stage

Skewes was referring to the March 2 suspension by a Republican-led legislative committee of new wind siting rules. The vote took place a day before the rules were set to take effect.

Wisconsin's Public Service Commission had finalized the rules last December after two years of information-gathering and strong bipartisan support for the measure. Under the measure, wind turbines would be built at least 1,250 feet from property lines, a distance meant to satisfy landowners concerned with noise and decreasing property values while still giving wind developers room to build.

The committee has yet to put forth new wind siting rules, though Republican Gov. Scott Walker is proposing a 1,800-foot setback rule that would be the most stringent in the nation and prevent any future wind projects from moving forward, the industry says.

Shortly after the suspension, Chicago-based wind developer Invenergy said "regulatory uncertainty" had led it to cancel plans for the 150-megawatt Ledge Wind Energy Center in Wisconsin's southern Brown County, as reported by SolveClimate News.

Just weeks after Invenergy said it was pulling the plug, Midwest Wind Energy (MWE), also a developer from Chicago, announced it would suspend efforts to develop a 98-megawatt wind project in Wisconsin.

"So long as there are states rolling out the welcome mat it doesn't make sense to devote significant dollars to a state that is creating unreasonable roadblocks for wind development," MWE president Stefan Noe said in a March 29 press release announcing the decision.

29 Other States Have Caps

Wind industry officials say they are concerned that the proposed REC bill would further destabilize Wisconsin's shaky investment climate, especially considering that almost all of the 29 states with compliance programs, plus the District of Columbia, include credit caps.

"The practical impact would mean that you wouldn't have continued investment in Wisconsin-based renewable energy generation," Lee Cullen, a lawyer who represents the Wisconsin Energy Business Association, told SolveClimate News. The 60-member association represents manufacturers, construction companies, service providers and developers in Wisconsin's renewable energy industry.

Cullen said that under the bill, energy providers could purchase RECs at low prices and bank them indefinitely.

"That is not really going to do anything for creating jobs or capital investment in the state," he said.

Jeff Anthony, director of business development for the American Wind Energy Association (AWEA), said: "The real concern that AWEA and a lot of other wind energy advocates has is that it is really an attempt by utilities to weaken the renewable energy standard and to do it in a surreptitious, backdoor maneuver.

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