Waste heat from paper and pulp processing, steel mills, and other manufacturers could earn renewable resource credits for reusing excess heat under legislation being considered by a Wisconsin legislative committee.

SB 144, and its companion AB 204, would allow waste heat to generate renewable resource credits, or RRCs, that can be sold to utilities and electric cooperatives to meet their compliance requirements under the state's renewable portfolio standard.

Speaking before the Senate Committee on Elections and Utilities on April 5, Sen. Roger Roth, the lead sponsor of SB 144, said the bill would prevent excess heat from being wasted and encourage the use of that resource for heating, cooling or other manufacturing processes,

During the meeting, the bill drew skepticism from Sen. Mark Miller, who said the proposal "misplaces" waste heat within the RPS when it does not generate more electricity from renewables. "You are just capturing energy, but it is not electricity. It is not an appropriate use of the renewable portfolio standard," Miller said, arguing that the more appropriate place is under the state's Focus on Energy program, which encourages the use of alternative sources of energy.

Rep. Robert Brooks, the lead sponsor of AB 204, said heat can be captured to offset needing additional electricity on the grid. The bills allow waste heat from all types of resources, even fossil fuels, to generate credits, but it avoids the use more coal or fuel to drive other manufacturing processes.

At least 19 states, including Minnesota, Ohio, Indiana and the Dakotas, have included waste heat in their renewable and energy efficiency definitions, according to testimony from the Wisconsin Industrial Energy Group, Wisconsin Paper Council and Heinzen Law, which represents industrial groups. Brooks introduced the bill because manufacturer Charter Steel is within his district in the southeastern part of Wisconsin, which he said faces some of the highest industrial electricity rates in the state. The bill also drew support from the Midwest Food Products Association and Wisconsin Manufacturers and Commerce.

Wisconsin met its 10% renewable target in 2013, two years ahead of when it was required, but the bill provides "another tool" to generate credits and helps get waste heat recovery projects "over the hump," said Todd Stuart, executive director of the Wisconsin Industrial Energy Group whose board members include paper producer Domtar Inc. and commercial product company Proctor & Gamble Inc.. On top of that, manufacturers have an opportunity to sell the credits to buyers within and outside the state. "We believe that there are paper companies that are currently selling these RRCs into other markets outside of MISO," Stuart said in an interview.

The proposal drew opposition from RENEW Wisconsin Executive Director Tyler Huebner, who during the hearing said the bill does not preclude older systems from counting toward the state's renewable target instead of encouraging the development of new systems and new resources, though Huebner qualified that he does find waste heat to be a valuable resource.

Sen. Fred Risser and Miller said the bill opens the question on whether the Legislature should raise the RPS, but Rogers said he did not know whether he would support such a measure. Brooks said the Legislature needs to make sure such a measure would be cost-effective.