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Wis. renewables standard falls short of promises, study says

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Wis. renewables standard falls short of promises, study says

Wisconsin'srenewable portfolio standard has fallen short of the clean energy and green jobrevolution promised by proponents, and in fact the requirements havesignificantly increased electricity prices, hurting the local economy in theprocess, according to a new report by the MacIver Institute.

Drawingon research from University of Wyoming economist Timothy Considine,the report, released July 7, said that by shifting the power supply more in thedirection of higher-cost wind and solar energy rather than cheaper sources ofenergy, the state's renewable portfolio standard is estimated to increaseaverage electricity prices by 9.6% in 2016, 10% in 2020 and 7% to 9% after2025. The cost borne by consumers is $474 million in 2016 alone, with higherelectricity rates leading to $1 billion in lost economic activity per year, thestudy said.

TheMadison, Wis.-based MacIver Institute bills itself as a "think tank that promotesfree markets, individual freedom, personal responsibility and limitedgovernment." It is an affiliate of the State Policy Network, a group ofconservative think tanks.

Wisconsin's current renewable portfolio standard calls forthe state to get 10% of its power from renewables. Investor-owned utilities,municipal utilities and electric cooperatives are all obligated to comply withthe RPS. About 98% of the new power capacity to meet the standard comes fromwind, the report said.

In 2014, Democrats in the state legislature boosting the standardto 30% by 2030, but the bill never passed. The MacIver Institute said that thenew research about the costs for Wisconsin should put to rest claims made byrenewables proponents "that Wisconsin was missing out on economicopportunity by not passing the draconian measure."

But more exhaustive research has found the truth of theeffects of renewable portfolio standards is "just about the opposite"from the claims of the MacIver Institute, according to Keith Reopelle, seniorpolicy director for Clean Wisconsin, an environmental group. InJanuary, the National Renewable Energy Laboratory and Lawrence BerkeleyNational Laboratory put out a studythat found renewable portfolio standards created billions of dollars ineconomic benefits from lower air pollution and new jobs, and in many cases evensuppressed, not increased, electricity prices.

For Wisconsin specifically, the national labs cited a2012 Public Service Commission of Wisconsin study that estimated the renewableportfolio standard compliance costs were about 1% of the utilities' revenuerequirements from 2008 to 2010.

Reopelle also pointed to the fact that state utilities arecontinuing to seek renewable energy on their own volition, despite havingalready met the standard. For example, WPPIEnergy in June issued a request for proposals for 100 MW of wind poweror the equivalent from other renewables sources, to be supplied under along-term contract.

Sierra Club John Muir ChapterConservation Programs Coordinator Elizabeth Ward said Wisconsin has "fallenbehind" neighbors like Minnesota in terms of the strength of renewable energystandards.

In response to arguments thatrenewable energy mandates have increased prices, Ward said the contentionconfuses correlation with causation. While Wisconsin'selectricity prices have risen to some of the highest in the nation, she said,there have been other factors at work. The state is still heavily dependent oncoal for energy, and coal power has become relatively more expensive due toenvironmental regulations, age and competition from cheaper natural gas.Coal provided more than 61% of the state's total generation in 2013, accordingto the MacIver Institute report, with wind providing only 2.4%.

According to Reopelle, the priceincreases can also be explained by utilities having moved investments to morerecent years. In the 1990s, when electricity rates in the state were lower, theutilities anticipated deregulation and deferred investments as a result, hesaid.