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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