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The Wisconsin Story

The Wisconsin Story. Carol Stemrich Assistant Administrator Gas and Energy Division. Overview. History of energy efficiency in Wisconsin Wisconsin’s unique circumstances Need for decoupling in Wisconsin Decoupling features Barriers to decoupling. History of Energy Efficiency.

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The Wisconsin Story

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  1. The Wisconsin Story Carol Stemrich Assistant Administrator Gas and Energy Division

  2. Overview • History of energy efficiency in Wisconsin • Wisconsin’s unique circumstances • Need for decoupling in Wisconsin • Decoupling features • Barriers to decoupling

  3. History of Energy Efficiency • Glory years (utility provision of energy efficiency services) • Annual goals • Cooperative effort • Brute force • Conservation escrow • Rate base treatment/performance incentives

  4. History of energy efficiency (cont.) • 1999 Wisconsin Act 9 • Statewide public benefits programs • Administered by DOA • Third-party program administrators • Established funding level • Customer service conservation activities • Voluntary programs • Ordered programs • WEPCO • WPSC

  5. History of energy efficiency (cont.) • 2005 WisconsinAct 141 • Increased funding level • Utilities contract with program administrators • Program types • Statewide • Utility-administered • Voluntary utility • Large customer self-directed • Commission approval of contracts and proposals • Quadrennial planning process

  6. Unique circumstances • Frequent rate cases • Forward-looking test year • Full recovery of demand-side investments • Reduced utility responsibility for energy efficiency • Wisconsin utilities generally regarded as excellent investments

  7. Is decoupling needed in Wisconsin? • Impact of Wisconsin’s unique circumstances • Act 141 implications • Limit on the ability to order programs • Mechanism for increasing funding of statewide programs • Energy efficiency package

  8. Decoupling features Premise: The energy efficiency package will result in increased energy efficiency savings through a change in behavior on the part of the utility.

  9. Decoupling features • Partial decoupling • Weather normalization • Economic normalization • Consistent with markets targeted by the energy efficiency programs • Structured to minimize rate volatility • Pilot • Third-party evaluation

  10. Package features • Include new tariffs and efficiency programs that are likely to have a substantial impact on sales • Establish aggressive goals • Performance incentives that reward achievement not spending

  11. Barriers to decoupling • Role of utilities in providing energy efficiency services • Administrative burdens of economic and weather normalization • Unintended consequences • Inequities between customer classes • Rate volatility • Legality • Other options

  12. Summary • Unique circumstances in Wisconsin need to be considered when determining whether a decoupling mechanism is needed • Decoupling may be most appropriate under extraordinary circumstances • Need for careful design to prevent unintended consequences

  13. Carol Stemrich carol.stemrich@psc.state.wi.us (608) 266-8174

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