Utility regulators want state’s energy efficiency program to play a larger role in cutting emissions

The state’s utility regulators want Wisconsin’s energy efficiency program to play a larger role in cutting carbon emissions as part of efforts to combat climate change.

The Public Service Commission voted 2-1 last Thursday for the state’s Focus on Energy program to play a greater role in cost-effectively cutting carbon emissions while continuing to emphasize energy savings.

Commissioners also supported research, planning and investment of resources that would set Focus on a path toward playing a larger role in promoting replacement of fossil fuels with electricity to reduce emissions and energy costs.

Regulators made the decision as part of reviewing and setting goals for the program over the next four years.

“The landscape around both energy generation and energy usage and the technologies associated with producing energy and using it, they’re changing now more than ever,” said Commissioner Tyler Huebner.

Huebner and PSC Chair Rebecca Valcq want to position the Focus on Energy program to ensure energy savings while adapting to new technologies and the state’s changing power mix. The state’s largest investor-owned utilities are spending billions to retire coal-fired power plants and replace them with wind, solar and battery storage over the next several years.

Regulators opted to use the next four years as a transition period for the program to further align with carbon reduction goals rather than shifting the program’s priorities.

“We do have to skate to where the puck is. In other cases, I think we don’t know where the puck is going yet,” said Valcq. “I think we have to be sure that we don’t get too far ahead of ourselves.”

The $100 million program that works with residents and businesses to install cost-effective energy efficiency and renewable energy projects generates between $3.66 and $5.16 in benefits for every dollar spent.

Nearly 16 million tons of carbon emissions were avoided in 2019 and 2020 through the program, which generates annual emissions benefits of roughly $110 million.

Heather Allen, executive director of RENEW Wisconsin, said the commission’s actions call for a more detailed accounting of carbon emissions under the program.

“That will shape the future going forward. It’s critical to the governor’s climate and clean energy goals,” said Allen. “It’s going to be vital to help us reduce emissions in Wisconsin and shift to a clean energy future.”

The state’s largest utilities have set goals to go carbon-neutral by 2050 in line with Gov. Tony Evers’ goal for the state to produce carbon-free electricity by that date.

Even so, Republican lawmakers rejected policy changes proposed by the Governor’s Task Force on Climate Change. That included Evers’ proposal to double utilities’ contribution to Focus on Energy, which would have generated an additional $100 million for the program.

Commissioner Ellen Nowak voted against the program playing a larger role in cutting carbon emissions.

“We shouldn’t play a defined role in moving towards carbon goals,” said Nowak. “I think we need to stick with what we do well, and, if the Legislature wants us to start to really focus on something different, then we’ll listen to them.”

Sen. Julian Bradley, R-Franklin, and Rep. Mike Kuglitsch, R-New Berlin, expressed concerns to the commission about aligning the program with carbon reduction goals. The two lawmakers serve as chairs of the Legislature’s utility committees.

“Specific concerns include whether the Commission has the authority to change program priorities and goals from conservation and energy efficiency to decarbonization,” said Kuglitsch in a statement on Wednesday.

He also questioned whether the commission had authority to incentivize energy savings through fuel switching without lawmakers’ approval.

“As the commission considers broad policy changes, we would hope to see more data and analysis to justify policy changes,” wrote lawmakers in a letter to the commission. “Without adequate rationale, the legislature may be forced to reconsider the effectiveness of the program and reconsider its future and funding.”

The Wisconsin Utilities Association said in comments to the commission that aligning the program with carbon reduction goals “could provide value” if it’s done within the constraints of the law and the program’s funding.