wisconsin industrial energy group annual business meeting brett favre’s steakhouse june 24, 2010
TRANSCRIPT
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Overview• Introduction
• Costs/Rates/Jobs
• Global Warming Task Force Bill
• Legislative Session Summary
• Future Costs, Economic Survival
• Next Steps – Coalition Efforts
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Introduction• #1 state per capita manufacturing jobs• #1 state for paper & #3 state for foundries• Among the highest % of coal-fired generation• Currently among highest electric rates in the
Midwest• Currently way more electric supply versus
electric demand (30%) – no need to build anything
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Costs/Rates• WIEG members often spend $1 million or
more on their monthly electric bill
• Since 2003, industrial electric rates have increased between 40% to over 100% in Wisconsin
• Our electric rates were once among the lowest in the country, but are now among the highest in the Midwest
Industrial Electric Rates: Wisconsin vs. Midwest Average: 2000-2007
3.5
4
4.5
5
5.5
6
6.5
2000 2001 2002 2003 2004 2005 2006 2007
Ele
ctr
ic R
ate
(cen
ts/k
wh
)
Wisconsin Midw est Average
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Current & Future Costs
Generation ~$4 billion
Transmission ~$3 billion
10% Renewable ~$5 billion
Environmental ~$4 billion
Total $16 billion
*$5.5 billion collected annually in rates
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Global Warming Task Force
In reality was a 4 year fight - changes then made to WIEG paid big dividends now
• Changed some duties & consultants; greater legislative focus than in past
• Hired new executive director
• Act 141 passed with cost off-ramps, industrial caps & self-directed
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Global Warming Task Force
In 2007, the politics shifted after elections – the ink wasn’t dry on Act 141 when big policy shifts were announced
• Gov. Doyle creates Global Warming Task Force
• New Mercury Rule (CAMR) was introduced
• Sale of Point Beach nuclear plants
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Global Warming Task Force
In 2008, the politics shifted further and huge expenses were on the way
• Task Force final recommendations
• Power the Future $105 million settlement regarding water permits – legally obligated to lobby for 25% renewables mandate
• Massive WEPCO rate hike approved, but industrials caught a break on COSS
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Global Warming Task ForceIn 2009, the plate was full and WIEG was playing
defense on several fronts• PSC opens up at least five global warming task
force related dockets• Fuel Rules battle results in compromise, but no
law change (stalemate in 2009)• Commission was forced to reverse itself on
making WPSC lobby for 25% renewables mandate
• Bent Tree wind farm suit
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Governor’s Global Warming Task Force Legislation –
Original Bill• 25% by 2025 renewables mandate– Advanced Renewable Tariffs (ARTs)
• Increase Public Benefits contributions
• “Relax” Nuclear Moratorium
• Annual Boiler Inspections
• Non electric provisions:– Low Carbon Fuel Standard– Building Codes– “California Cars”
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2009 – 2010 Legislative Session
WIEG Accomplished Major Legislative Goals
• Killed global warming bill/“Clean Energy Jobs Act”
• Added cost containment to current 10% renewables (RPS) law
• Enacted compromise Fuel Rules legislation
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2009 – 2010 Legislative SessionOther Energy Legislation WIEG Lobbied:
• AB 755 (Rep. Mason) would have applied labor standards to Public Benefits programs, but was killed
• Wind siting reform (Act 40)
• “Green to Gold” (Act 332) energy loan program
• Proposed early sunset of District Attorney tax on utility bills
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Global Warming Bill Costs/WIEG Savings
WIEG members directly saved in avoided costs:
• $115 million annually overall with defeat of AB 649
• $20 million annually for just the current Act 141 caps versus AB 649
• $.5 million with just current law + Act 141 caps
*Note: The PSC says AB 649 would have saved customers billions
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Economic Survival• The state lost 164,000 manufacturing jobs
• Factory employment in Wisconsin is now at lowest levels; more government employees than manufacturing jobs
• 21% of workforce in manufacturing in 1999 – 18% of workforce in 2006
• Manufacturing pays 26% more than the average private sector job
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Economic SurvivalIf rates get too high, companies may fail,
leave or be unable to expand and grow
• Internally - we need to control costs with conservation and efficiency measures
• Externally - we need to influence the policy debate: ask what is the cost/benefit?
• Form business coalitions and talk to your state legislators
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Next StepsNeed to keep global warming coalition
active and figure out how to better align business & utility interests
• Over 50 business groups opposed to global warming bill
• Five core groups: Cast Metals, Food Processors, WIEG, WMC, Paper Council
• Legislation, Rate Cases, PSC Dockets
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Next StepsQuestions to answer:
• How can we maximize past energy investments for competitive advantage?
• What is the “sweet spot” and can we coast off of these investments for a few years?
• Can we maximize spending on Public Benefits/Focus on Energy?
• What is “right” amount of renewables & efficiency?
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Next Steps - RegulatoryAlways have rate cases to fight and have
major PSC dockets pending:
• Retirement of coal docket
• “Innovative Rates”
• Increased energy efficiency spending studies
• Demand Response/Load Management
• Small scale renewables
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Next Steps - LegislationDepends a great deal on the next election
and who is in charge
• Clean Energy Jobs Act probably dead
• What is the “right” amount of renewables?
• What is the “right” amount of efficiency?
• Expanded economic development tariffs? Tighter cost/benefit laws?
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Summary/Conclusion
• Introduction
• Costs/Rates/Jobs
• Global Warming Task Force Bill
• Legislative Session Summary
• Future Costs, Economic Survival
• Next Steps – Coalition Efforts