Posts Tagged ‘Michael Vickerman’

MGE: The Rustbelt Mindset

Friday, April 30th, 2010

Word has it that Madison Gas & Electric was the lead lobbyist in scuttling the state’s green energy plan during the state’s recent budget deliberations.

One major component of the plan: 25% of state’s total energy was to come from renewables. It also included a massive conservation push. There were significant provisions for reeling in cars. It was a multi-frontal assault on gluttony. It was a good plan.

Kristine Euclid, Gary Wolter & Co. should be ashamed of themselves.

As many readers know, I’m a major doubter about renewables. For now. I believe that there is so much low hanging fruit in terms of conservation that it would be unwise to dive into renewables until we have reduced our overall burn to the point that renewables could actually make a dent. As it stands, we burn so much that even a massive, Manhattan Project-scale investment in renewables wouldn’t make a hill of beans difference. We’ve got to burn less — a lot less — in order for renewables to be more than decorative. That said, this plan was so comprehensive, and so, so, just plain good on so many levels — especially conservation — that I think the 25% was a good, achievable target for renewables. I believe we would have been forced to burn a lot less in order to achieve that target number. We could never in a million years gotten to that number trying to build up to it assuming current consumption. We would first have to reduce, reduce, and reduce some more to make that number a reality. A good thing.

But the old, gray industrialists at MGE didn’t like it. Why? For one, by forcing reductions in the total burn of coal in the state, the bill probably would have reduced the value of their recent investment in 19th century coal technology at the Oak Creek power plant (or Elm Road, or whatever the latest euphemism for that rusting relic is).

It gets worse. Not only did they scuttle a visionary, 21st century green energy policy, they now want to hammer their green power paying customers with the cost of keeping their coal fired power plants.

More below….

IMMEDIATE RELEASE

April 27, 2010

MORE INFORMATION

Michael Vickerman

RENEW Wisconsin

608.255.4044

mvickerman@renewwisconsin.org

RENEW: Renewable Energy Not Responsible for MGE Rate Increase

Higher costs associated with fossil fuel generation are driving Madison Gas & Electric’s costs higher, according to testimony submitted by company witnesses. The utility filed an application last week with the Public Service Commission (PSC) to collect an additional $32.2 million through a 9% increase in electric rates starting January 2011.

The bulk of the rate increase can be attributed to expenses associated with burning coal to generate electricity. A 22% owner of the 1,020-megawatt (MW) Columbia Generating Station near Portage, Madison Gas & Electric (MGE) and the owner plant owners plan to retrofit the 35-year-old facility to reduce airborne emissions. The cost of Columbia’s environmental retrofit is expected to total $640 million, of which MGE’s share is about $140 million.

MGE also owns an 8% share of the state’s newest coal-fired station, the 1,230-MW Elm Road Generating Station located in Oak Creek. A portion of the proposed rate hike would cover lease payments and other expenses at that plant.

MGE’s application does not attribute any portion of its proposed rate hike to renewable energy sources. However, MGE plans to increase the premium associated with its voluntary Green Power Tomorrow program from 1.25 cents per kilowatt-hour to 2 cents. RENEW estimates that the premium hike will collect more than $1 million in 2011 from the approximately 10,000 customers participating in the program.

According to the utility’s web site, 10% of MGE’s electric customers purchase some or all of their electricity from renewable resources. Moreover, Green Power Tomorrow has the second highest participation rate of all investor-owned utilities in the country according to the National Renewable Energy Laboratory.

Not surprisingly, MGE anticipates subscribership in Green Power Tomorrow to decrease if the PSC approves the higher premium. Currently, the program accounts for about 5% of total electric sales. Program subscribers include the City of Madison, State of Wisconsin, Dane County Regional Airport, Madison West High School, Goodman Community Center and Home Savings Bank.

According to MGE, sinking fossil fuel prices have widened the difference between wholesale power costs and the cost of supplying customers with renewable energy. However, it is worth remembering that the cost of supplying power from MGE’s renewable energy assets, such as its Rosiere installation in Kewaunee County and Top of Iowa project, did not increase last year and will not increase in the foreseeable future.

“Even though the cost of MGE’s windpower supplies is not going up, Green Power Tomorrow customers will take a double hit if the PSC approves this rate increase and request for higher premiums,” said RENEW Wisconsin executive Director Michael Vickerman. “It’s a ‘heads-I-win-tails-you-lose’ proposition that will wind up rewarding customers who drop out of the renewable energy program because coal is cheaper.”

“It would be short-sighted to penalize renewable energy purchasers just because fossil fuel prices are in a temporary slump,” Vickerman said. “But if MGE is allowed to institute this penalty at the same time it imposes the cost of cleaning up an older coal-fired generator on all of its customers, including its Green Power Tomorrow subscribers, it would have a profoundly negative impact on the renewable energy marketplace going forward.”

“This is the wrong time to be throwing up barriers to renewable energy development. We at RENEW will fight proposals that reward fossil fuel use and penalize renewable energy,” Vickerman added.

END

RENEW Wisconsin (HUwww.renewwisconsin.orgUH) is an independent, nonprofit 501(c)(3) organization that acts as a catalyst to advance a sustainable energy future through public policy and private sector initiatives.