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Energy Efficiency Policies and Practices in Wisconsin

Utility Sector

Utility sector policies are those policies that directly affect the way that the state's electricity and natural gas utilities do business and serve the energy needs of their customers.  These policies include utility forecasting and planning requirements for energy efficiency, requirements for energy efficiency delivery to customers, regulatory mechanisms to determine utility revenues for energy efficiency services, processes for working collaboratively with other utilities and energy stakeholders to advance energy efficiency, requirements for evaluating energy efficiency programs and portfolios, and policies to promote the development of the next generation of energy grids.


Resource Planning

Authorized by Wisconsin Statute 196.374(3)(b)1, the Wisconsin Public Service Commission (PSC) undertakes a quadrennial review process to "set or revise goals, priorities, and measurable targets for the [energy efficiency and renewable energy] programs" paid for by ratepayers under the statewide EE and RE standards.  A 2009 report commissioned by the PSC in Docket 05-UI-115 recommended increasing the state's requirements and spending on energy efficiency, and in 2010 the PSC conducted the Quadrennial Review Process (search at the PSC homepage for Docket 05-GF-191). As the result of that review, in November 2010 the PSC ordered changes to the statewide energy efficiency funding model, but that order was overturned by the legislature in early 2011. As a result, that docket remains quite active as the Commission continues to evaluate energy efficiency and renewable energy programming.

In addition to the Quadrennial Review, the PSC also conducts a biennial Strategic Energy Assessment to assess the adequacy and reliability of the state's energy supply. The SEA, mandated by Wisc. Stat. 196.491, evaluates and forecasts energy supply over a 7 year horizon. The latest SEA was completed in mid-2012 and evaluates the years 2012-2018.

► Overview of Resource Planning policies in the Midwest


Energy Efficiency Standards

Electricity & Natural Gas

Wisconsin has a long history of energy efficiency policy. Under current policy, Wisconsin has a statewide energy efficiency program, funded by ratepayers of regulated investor-owned utilities, called Focus on Energy. Several municipal and coop utilities also participate in Focus on Energy. Focus on Energy has been administered by the Public Service Commission since 2007, under changes made in 2005 Wisconsin Act 141. According to the Commission, energy efficiency spening in Wisconsin is approximately 70% electricity and 30% natural gas efficiency programs.

As promulgated under Act 141,  Wisconsin Statutes 196.374(2) requires utilities to fund energy efficiency programs at a level of 1.2% of annual revenue, a spending-based energy efficiency standard known as a Public Benefit Fund (PBF). Wisconsin has the only PBF in the Midwest. Other states in the Midwest with statewide energy efficiency standards use the savings-based Energy Efficiency Portfolio Standard (EEPS) model.  In 2010, the Wisconsin Public Service Commission attempted to move away from the PBF and into an EEPS which would have ramped up to over double current energy efficiency funding levels in Wisconsin, but that PSC order in November 2011 and its subsequent approval by a Democrat-led Joint Committee on Finance (JCF) was rolled back early in the 2011 legislative session by the now Republican-led JCF, reducing the budget to about $100 million for the PBF and removing the authority of the PSC to increase funding requirements.

In Wisconsin's PBF, the utilities collectively contract with Focus on Energy as the statewide program administrator through the Statewide Energy Efficiency and Renewable Administration (SEERA) which contracts with and funds third-party administration to implement not only residential and non-residential energy efficiency programs, but also renewable energy, and environmental and economic R&D. Utilities are also allowed under statute to conduct their own energy efficiency programs in addition to those funded through the statewide administrator, subject to approval by the PSC, though the PSC cannot order utilities to conduct additional programs. Wisc. Stat. 196.374(2)(c) allows for self-directed energy efficiency programs for large customers over 1,000 monthly kWh or 10,000 dekatherms of natural gas.

► Overview of Efficiency Standards policies in the Midwest


Rate Structures & Incentives

Cost-Recovery

Under Wisc. Stat. 196.374(5)(a), utilities receive cost-recovery in their rates for funding Focus on Energy. The PSC can also approve cost recovery for utilties that engage in further energy efficiency programming outside of the PBF on a case-by-case basis.

Lost-Revenue Recovery

Lost revenue recovery mechanisms in Wisconsin are approved by the Commission on a case-by-case basis. In 2008, in Docket 6690-UR-119, the Commission approved decoupling as a "Revenue Stabilization Mechanism" and allowed the Wisconsin Public Service Corporation (WPSC) to pursue a four-year pilot program. WPSC has asked that decoupling be continued past the end of the pilot in 2012. Wisconsin Power and Light has also been approved for decoupling for natural gas in Docket 6680-UR-116. (Search at the PSC homepage for the dockets, as the system does not allow direct linking.)

Utility Incentives

Utilities can propose incentives as part of their rate cases for the voluntary utility-administered EE programs that are outside of the Focus on Energy program. The incentive is in the form of shared savings.  Alliant (WP&L) has received Commission approval to utilize the shared savings mechanism one of the programs it offers outside of the Focus on Energy program. (Search at the PSC homepage for the docket, as the system does not allow direct linking.)

► Overview of rate structures & incentives in the Midwest


Stakeholder Collaboration

Utilities that fund Focus on Energy meet collaboratively as part of the Energy Efficiency and Renewable Administration (SEERA) process that hires and funds Focus administrators, and as part of the ongoing engagment with the Focus on Energy model. Focus and the utilities also conduct periodic trade-ally meetings. Energy efficinecy planning collaborative meetings in Wisconsin are not public meetings and there is no formal process for meetings that are open to all interested stakeholders.

► Overview of stakeholder collaboratives in the Midwest


Program Evaluation

Energy efficiency program evaluation in Wisconsin is primarily conducted under the auspices of the statewide Focus on Energy program administrator. Programs are evaluated annually, as mandated in Wisc. Stat. 196.374(3)(d).

Cost-Effectiveness Tests

Under the authority of Administrative Code PSC 137.05(12), the Commission determines what cost-effectiveness tests are used in the state. Wisconsin primarily uses the Total Resource Cost (TRC) test for determining the cost-effectiveness of energy efficiency programs, though the Program Administrator Cost Test (PACT) and the Societal Cost Test (SCT) are also used.

Net vs. Gross

Wisconsin energy efficiency program evaluations report both Gross and Net savings. Net savings calculations include measurement of both free-rider and spillover effects, as specified in Administrative Code PSC 137.01(1).

Technical Resource Manual

Business sector programs have a Technical Resource Manual (TRM), known as the Deemed Savings Manual v1.0.  Evaluation materials and reports for business sector programs are available from Focus on Energy's website.

Residential programs in Wisconsin do not have a TRM that is as well-defined as that on the business side.  The residential programs also use a deemed savings model, but documentation of those savings is not condensed into a single document. Typically, they are included as appendices to the evaluation reports in which they are used, rather than as a stand-alone TRM.  Residential sector deemed savings are reviewed periodically. Deemed savings reviews, evaluation reports, and other documentation of residential sector programs is available from Focus on Energy.

► Overview of efficiency program evaluation in the Midwest


Smart Grid

The Smart Grid Information Clearninghouse identifies the following smart grid projects in Wisconsin:

Recovery Act-funded smart grid projects that benefit Wisconsin, as identified on SmartGrid.gov include:

► Overview of smart grids in the Midwest


 

 

Read the report that accompanies these pages:
Energy Efficiency Policies, Programs, and Practices in the Midwest:
A Resource Guide for Policymakers (2014 Edition)

►more information about the Resource Guide