PSC improves interpretation of energy priorities law

In a recent action, the Public Service Commission (PSC) did an about-face on its longstanding interpretation of the 6-year-old Wisconsin Energy Priorities Law, finally putting some teeth into it.
The PSC applied the new standard in a case involving Wisconsin Public Service Corporation’s (WPS) request to build a coal-fired power plant in Marathon County.
The Energy Priorities Law provides, "In meeting energy demands, the policy of the state is, to the extent cost-effective and technically feasible, options be considered based on the following priorities: (a) energy conservation and efficiency; (b) noncombustible renewable resources; (c) combustible renewable resources; and (d) nonrenewable combustible energy resources in the order listed: (i) natural gas; (ii) oil or coal with sulfur content less than 1 percent; (iii) all other carbon-based fuels."
Since1999, the PSC has held that the Energy Priorities Law requires only an analysis of whether a sufficient amount of technically feasible and cost effective resources of higher priority exist to warrant canceling or delaying a project. The problem with that interpretation is it renders the Priorities Law virtually meaningless. The answer to the question of whether implementing energy efficiency measures, for example, would be sufficient to obviate the need for a 500 megawatt power plant like the one WPS proposed will always be no.
In the recent WPS proceeding, I argued that this interpretation was wrong. The statute, correctly interpreted, requires more than a token review. The PSC must ensure Wisconsin’s citizens and environment bear the smallest amount of power plant generation needed to meet the state’s electricity needs.
That means, when considering how to meet the energy demands that a project is designed to address, the PSC must first look to how much of that need can be met using energy efficiency technology.
In adopting the new interpretation the PSC stated, "The plain language of the Energy Priorities Law requires the Commission to maximize the overall use of the preferred options to the extent possible, even in incremental amounts. This is consistent with the obvious objective of the law, which is to deploy the more environmentally preferable options first when meeting Wisconsin’s need for energy."
The PSC also rejected WPS’ argument that the PSC did not have the authority to require the utility to achieve a specified level of energy efficiency in its service territory. WPS contended that any such authority was limited to voluntary efforts by the utility. Instead, the PSC agreed with our argument that WPS should be required to develop and implement a plan to achieve at least 32 megawatts of energy efficiency by 2008.
What does this mean for Wisconsin? It means the PSC is finally taking the Energy Priorities Law, and the excellent policies underlying it, seriously. It means Wisconsin utilities can expect to have their feet held to the fire on energy efficiency and renewable energy issues before their requests to build more coal plants are approved.
That’s good news for Wisconsin’s citizens, its economy, and its environment.
Elizabeth Rich is the executive director of Plymouth-based E4, Inc., a nonprofit corporation dedicated to the environmental and economic benefits of energy efficiency for Wisconsin businesses.
November 12, 2004, Small Business Times, Milwaukee, WI

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