Ensuring Clean, Reliable, Affordable Energy for Wisconsin

Wisconsin must act now to establish a framework for sustaining utility public interest obligations that protect consumers and the environment before its electric industry proceeds with restructuring. Recent declines in energy conservation and low-income weatherization funding are endangering our ability to provide adequate and affordable supplies of electricity at minimal environmental cost.

Adopting the Customers First! public benefits proposal would enable Wisconsin to reap the economic and environmental advantages that flow from increased system reliability, lower electric bills, new jobs and business opportunities and greater energy security for low-income households.

• Customers First! Public Benefits Goals
• Customers First! Public Benefits Proposal
• Customers First! Public Benefits Projected Results
• Everything You Always Wanted To Know About The Customers First! Public Benefits Proposal

Customers First! Public Benefits Goals:

• To ensure adequate and effective energy services for low-income households, which will be at greater risk in a more competitive electric power industry.

• To strengthen the energy conservation and efficiency market in Wisconsin and to achieve increased environmental and reliability benefits through the wise use of energy.

• To accelerate the development of renewable power sources for wholesale power supplies and individual customer use.

Customers First! Public Benefits Proposal:

• Establish a graduated access fee on electricity sales to support low-income energy efficiency and environmental initiatives currently paid through utility rates.

• Charge the Department of Administration (DOA) with administrative responsibility over low-income, energy efficiency and environmental programs funded through the public benefits access charge.

• Establish new funding for public benefits at $44 million each year. $20 million is for energy efficiency and environmental programs. $24 million is for low income energy assistance.

• Impose a 3% cap on increases in customer bills due to the public benefits charge.

• Create a Commitment to Community plan that provides customer-owned utilities — cooperatives and municipals — the option of using funds raised through the access fee to create programs and services that directly benefit their own customers.

• Lower customer bills through access to energy conservation and efficiency services.

• Jobs and business opportunities for providers of energy efficiency services and renewable power.

• Additional income to landowners and revenues to local governments from local renewable energy generation.

• Enhanced system reliability.

• Reductions in harmful emissions from energy generators.

• Affordable bills for low-income households.

Wisconsin’s utility customers have historically supported energy efficiency practices, low-income services and environmental initiatives through their rates. As the utility industry evolves toward a more competitive and increasingly complex structure, however, we run the risk of losing our ability to provide affordable energy to low-income residents, as well as providing adequate, environmentally sound supplies of electricity through demand reduction measures and increased use of renewable resources.

Public benefits programs would be funded through a non-bypassable access fee on electric bills. This fee would be broken out separately from other electric charges. To ensure that no customer sees a disproportionate bill increase due to the access fee, our proposal would cap the increase on all bills at 3%, which would increase bills by about $1.18 per month.

No. The access fee would replace funding for energy efficiency and low-income programs currently embedded in electric rates. Contributions from the federal government and utilities, however, have declined markedly in the last three years. The funding levels generated by the access fee would be roughly equal to what Wisconsin utility customers actually contributed toward conservation and low-income measures in 1995.

How would the Customers First! Public Benefits Proposal improve system reliability?

Increasing support for energy efficiency and demand reduction measures now would produce savings in the hundreds of megawatts by the next decade, the equivalent of a new power plant. Efficiency improvements in manufacturing and building energy use can be achieved more rapidly and often at a lower cost than constructing new power stations and transmission lines. An ounce of conservation does much more than prevent a pound of pollution: it reduces the need to construct fossil fuel plants and power lines to serve growing loads.

If all cost-effective energy efficiency investments in Wisconsin were pursued, they would produce a positive economic impact of $9.5 million annually, according to a 1995 report prepared by a stakeholder group appointed by Governor Thompson. If those investments were made immediately, they would result in $297 million of additional disposable income and 4,836 additional jobs by 2005, according to a 1998 DNR study. The state weatherization program has been shown to generate $2.25 of economic activity for $1.00 expended.

Our proposal makes special provision for the democratic nature of rural electric cooperatives and community-owned municipal utilities. Under our proposal, these providers have the option of either:

1. contributing their fair share to the statewide energy pool; or
2. using funds raised through the access fee to create programs and services that directly benefit their own customers.

No. While the restructuring debate is driving the need to redesign the mechanisms for delivering energy efficiency improvements and low-income services to customers, our public benefits proposal would work in today’s regulatory system as well as in a restructured power industry.