With so much heat being generated over health care reform or tax increases these days, it’s a bit surprising that there isn’t much public protest – or even discussion – of another smack at Wisconsin’s collective pocketbook.
Our electricity bills are rising – and rising fast.
We simply must raise our level of public discussion about this. The investments we make in energy and environmental improvements today will produce higher bills that we’ll be paying the next several decades.
At the very least, we need to ensure that the investments will truly make sense years from now. Higher electric bills and tax bills are all paid with the same dollars that come from the same pockets and business bottom lines. Worse, by acting alone, Wisconsin would be imposing billions of dollars in new costs that other states – and certainly nations won’t face.
That’s a potential disaster. We can pretend that economic competitiveness doesn’t matter. But we’ve already lost 164,000 jobs in this state, with 63,000 from manufacturing jobs that pay above average wages. Imposing huge new costs on manufacturers today is like throwing anchors to drowning victims.
Wisconsin used to be among the cheapest places in the country to buy electricity for homes and businesses. Now we’re among the highest in the Midwest. Our rates have gone up more than twice the rate of inflation. And it could get a lot worse if we aren’t careful.
Wisconsin’s renewable mandate requires billions of dollars in new renewable energy sources, for example. Our utilities are currently required to provide 10 percent of their electricity from renewable sources by the end of 2015. The Governor’s Task Force on Global Warming recommended boosting that to 25 percent by the year 2025. We’re currently at about 5 percent – and we’ve got a long, expensive way to go.
We’ll need massive new wind farms just to meet our state’s current 10 percent renewable mandate, even though our state’s utilities already have more than enough supply to meet demand. In recent testimony, administration officials said they haven’t yet modeled the costs of compliance for the proposed 25 percent mandate. However, one recent study estimated that provision alone would cost Wisconsin ratepayers over $16 billion for new energy infrastructure.
Wisconsin is the leading state in manufacturing, and manufacturing is an energy-intensive industry. Rate increases from the proposed legislation would make us less competitive. Our higher rates have already influenced companies to shut down factories or consider expanding elsewhere. It has hurt the papermakers, foundries and other heavy manufacturers in our area.
State manufacturers have invested millions in energy efficiency and will continue to do so as it is the most cost-effective option. That’s why our group does not oppose reasonable measures for energy efficiency, conservation and renewables. The industrial sector is the only part of our economy to have flat or declining energy consumption and air emissions over time due largely to those efficiency efforts. But even good investments often come with a limit on what we can afford to pay. Manufacturers already have a strong incentive to save on energy and costs because of global competition.
We can pretend costs don’t matter. But with double-digit unemployment in manufacturing-dependent areas of Wisconsin, it’s pretty clear economics do matter. So let’s elevate the debate and work toward realistic energy policies that will improve the environment and improve our economic competitiveness. We need a real cost-benefit analysis performed on this controversial legislation and we absolutely need stronger cost caps and cost containment initiatives added to existing state energy laws.
Todd Stuart is the executive director of the Wisconsin Industrial Energy Group Inc. (WIEG), a nonprofit association of 25 of the state’s largest businesses which collectively employ more than 50,000 workers. WIEG advocates for policies that drive affordable and reliable energy.