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State Energy Efficiency Policy Database

Wisconsin

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A network of nonprofits and foundations working on climate change and energy policy in an eight-state region of the upper Midwestern United States.
Administers Wisconsin's Public Benefits Fund, offering energy efficiency programs to a wide array of sectors and customers.

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Summary

Wisconsin's energy efficiency programs were initiated in the mid-1980s when integrated resource planning — termed the "Advance Plan Process" — was enacted by PSCW. This process is no longer in place and has been replaced by biennial "strategic energy assessments."

Under the 2005 Wisconsin Act 141, oversight of the statewide energy efficiency and renewable resources program called Focus on Energy transferred to the Public Service Commission of Wisconsin. Act 141 requires investor-owned electric and natural-gas utilities to spend 1.2 percent of their annual gross operating revenues on energy efficiency and renewable resource programs. Act 141 also requires municipal and retail electric cooperative utilities to collect an average of $8 per meter to fund energy efficiency programs. Municipal and retail electric cooperative utilities can collect the dollars and participate in the Focus on Energy program or can elect to operate their own Commitment to Community programs. The investor-owned utilities formed the non-profit Statewide Energy Efficiency and Renewables Administration (SEERA) to fulfill their obligations under Act 141. SEERA is required to create and fund Focus on Energy and to contract, on the basis of competitive bids, with one or more persons to administer the programs.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

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November 8, 2013


Customer Energy Efficiency Programs

Wisconsin has a statewide energy efficiency and renewable resources program called Focus on Energy, which is funded through a non-bypassable charge on customer bills. There has been no market restructuring or deregulation, so vertically integrated, investor-owned utilities are still regulated providers. In addition to Focus on Energy, utilities provide voluntary energy efficiency programs. Act 141 allows investor owned utilities (IOUs) to operate voluntary programs with funding in addition to the 1.2 percent or gross operating revenues they contribute to Focus on Energy. These voluntary programs need to be approved by the Public Service Commission and currently, three IOUs operate some level of voluntary programs.

Under 2005 Wisconsin Act 141, oversight of Focus on Energy was transferred to the Public Service Commission of Wisconsin. Act 141 also requires municipal and retail electric cooperative utilities to collect an average of $8 per meter to fund energy efficiency programs. Municipal and retail electric cooperative utilities can collect the dollars and participate in the Focus on Energy program or can elect to operate their own Commitment to Community programs.

Program cost recovery is handled via individual rate cases. A conservation escrow account is used for voluntary energy efficiency and programs. Program costs are recovered through rates, the money goes into an escrow account, and then the costs are adjusted, or "trued up," in the next rate case. If utilities spend more than the approved budget, they generally receive cost recovery through the true up. If actual spending is less than the escrow amount, the PSCW "trues it up" through a reduction in revenue requirement for the next rate period.

The Public Service Commission of Wisconsin oversees the statewide programs. The investor- owned utilities formed the non-profit Statewide Energy Efficiency and Renewables Administration (SEERA) to fulfill their obligations under Act 141. SEERA is required to fund Focus on Energy and to contract on the basis of competitive bids, with one or more persons to administer the programs. Focus on Energy has energy efficiency programs in two areas: (1) residential energy efficiency and renewable energy, and (2) non-residential energy efficiency and renewable energy (including the business, governmental, institutional, industrial and agricultural sectors).Focus on Energy also has a Research Portfolio Program which funds research projects to obtain new knowledge in the areas of energy efficiency and renewable energy program design and delivery in Wisconsin..

Act 141 allowed for self-directed programs for the largest energy customers. Customers must submit a program plan for approval to the Public Service Commission of Wisconsin that meets cost-effectiveness standards and includes detailed measurement and verification plans. Approved customers implement their plans and submit quarterly reports. The amount of funding available is based on variable formula and is received upon completion of projects. To date, no customers have chosen this option. More information on large customer self-direct programs can be found in the ACEEE report, Follow the Leaders: Improving Large Customer Self-Direct Programs.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

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November 8, 2013


Energy Efficiency Resource Standards

Summary:Electric: 0.66% of sales in 2011-2014. Natural Gas: 0.5% of sales in 2011-2014.

The Public Service Commission of Wisconsin issued its final order of the Quadrennial Planning Process on November 10, 2010, which adopted electricity and natural gas savings goals for Focus on Energy. The electricity goals, as a percent of peak load and electric sales, amounted to 0.75% in 2011, ramping up to 1.5% in 2014. The PSC also approved natural gas goals of 0.5% in 2011, ramping up to 1% in 2013.

Shortly after the EERS was approved by the Joint Finance Committee of the state legislature, the state limited funding to Focus on Energy to 1.2% of revenues, which resulted in a major reduction in energy efficiency goals. The goals are now approximately 0.75% of sales in 2011, 2012, and 2013 for electricity and 0.5% of sales for natural gas over the same time-frame.


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August 11, 2013


Alternative Business Models

Decoupling was approved for Wisconsin Public Service Corporation (WPSC) in December 2008 (specified as a “Revenue Stabilization Mechanism”), allowing the utility to pursue a four-year pilot program. WPSC is required to make additional contributions to Focus on Energy.  WPSC is also required to pursue three community-based pilots, which will be regularly reviewed (at 2, 12, 24, and 30 months). True-ups occur annually and over- or under-collection is capped at $14 million for electricity and at $8 million for natural gas. Pilot programs ended December 2012 and programs with additional contributions end at the end of 2013 (See Docket No. 6690-UR-119 (December 2008, modified February 2009). WPSC has requested the continuation of decoupling in 2014. A decision is expected in late 2013.

Wisconsin Electric Power Company submitted a proposed Gas Cost Recovery Mechanism. Approval was granted June 2011 (Docket No. 6630-GF-112).


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August 9, 2013


Reward Structures for Successful Energy Efficiency Programs

A decision in a recent rate case (Docket 6680-UR-114) of Wisconsin Power & Light (Alliant Energy) allows the company to earn the same rate-of-return on its investments in energy efficiency made through its “Shared Savings” program for C/I customers as it earns on other capital investments (e.g., power plant construction).

Utilities can propose incentives as part of their rate cases, but there have been no such proposals from other utilities recently. Wisconsin did have performance incentives in place in the early to mid-‘90s, but dropped them as the state began investigating restructuring and deregulation.

In addition, the Statewide Energy Efficiency and Renewables Administration and Chicago Bridge & Iron (formerly known as Shaw Environmental & Infrastructure Inc.) Focus on Energy contract (May 2011 through December 2014) includes a performance reward for exceeding goals and a penalty for not meeting goals.


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August 9, 2013


Energy Efficiency as a Resource

The Public Service Commission of Wisconsin carries out a "Strategic Energy Assessment" every two years. These assessments assess past and future electric energy needs and associated resources available to meet these needs. This process is for planning only; it yields no regulatory orders or decisions that require actions by affected utilities, such as establishing specific resource goals or required investment levels in energy efficiency.

In April 2008, PSCW initiated a docket as a result of recommendations by the Governor's Task Force on Global Warming to establish targets for energy savings through energy efficiency and conservation, "Investigation into the Adoption and Achievement of Increased Conservation and Energy Efficiency Goals (05-UI-115)." This docket was superseded by the Quadrennial Planning docket (5-GF-191).


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August 13, 2013


Evaluation, Measurement & Verification
  • Cost-effectiveness test(s) used: TRC, UCT, SCT
  • Uses a deemed savings database: yes (Deemed Savings Data)

The evaluation of ratepayer-funded energy efficiency programs in Wisconsin relies on both legislative mandates (Wisconsin Act 141) and regulatory orders (PSC Chapter 137). Evaluations are administered by both the utilities and the Public Service Commission of Wisconsin. There are specific legal requirements for evaluation in Wisconsin in Act 141. Evaluations are conducted statewide and for each of the utilities. Wisconsin uses three of the five classic benefit-cost tests identified in the California Standard Practice Manual. These are the Total Resource Cost (TRC), Utility/Program Administrator (UCT), and Societal Cost Test (SCT). Wisconsin specifies the TRC to be its primary test for decision making. A benefit-cost test is required for overall portfolio level screening. The rules for benefit-cost tests are stated in 5GF191 Order.


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August 21, 2013