Energy 2030: MGE tries to build on progress

Gary Wolter is the first to admit there is still a great deal of work to be done to execute Madison Gas and Electric Co.’s new long-term energy strategy, the Energy 2030 framework released last week, but he’s confident the desired results will be met with the help of the ongoing community engagement MGE is committed to as part of the plan.

Indeed, the utility acknowledges it will need customer collaboration and support to achieve its vision, which includes harnessing the power of newer, smarter home automation technologies. Wolter notes the community conversations were but a piece of a pre-roll out engagement strategy that also included surveying, discussions with industry experts from organizations like the Citizens Utility Board and Clean Wisconsin, and the solicitation of online comments from the public.

“I don’t think there is another utility in the country that has engaged the public in as many different ways,” says Wolter, MGE’s chairman, president, and CEO. “The engagement will be ongoing as we figure out programs and customer products and services.”

An energized utility

Energy 2030, which has received praise even from some the utility’s most vocal critics, is designed to address the need for a new long-term direction for the provision of energy, particularly cleaner energy such as solar and wind, and to develop a plan to transition away from aging fossil fuel-fired resources.

Among the framework’s goals are to supply 30% of retail energy sales with renewable resources by 2030, including a milestone goal of 25% with renewable sources by 2025, and to reduce the community’s carbon dioxide emissions by 40% from 2005 levels by 2030. The current level of retail energy sales from renewables is 12%.

After securing controversial rate hikes in 2015, MGE is not proposing an increase in fixed charges for residential and small business customers in 2016, but it indicated that it would be engaging the community in discussions about what it calls “innovative pricing options” to encourage customer behavior such as electric vehicle charging at off-peak times.

Wolter characterized the goals as aggressive but doable, even given the fact that Dane County now has more than 70,000 additional residents than it did in 2005, the year it launched it’s recently completed long-term plan, Energy 2015. “Not all of that 70,000 are our customers,” he notes, “but we’re serving a growing population.”

Framework feedback

MGE generates and distributes electricity to 143,000 customers in Dane County and purchases and distributes natural gas to 149,000 customers in seven south-central Wisconsin counties. The new framework was developed following nearly 100 community energy conversations with area residents providing feedback on their preferences.

It is designed to build on the progress made under the utility’s Energy 2015 plan, which was established following similar community outreach in 2005, and led MGE to eliminate coal burning at its downtown power plant, increase energy from renewable resources by a factor of 12, and reduced carbon (CO2) emissions by almost 20%.

“What we incorporated was the extent to which the public is encouraging us to add renewables to the mix,” Wolter states, adding that in a survey 81% of MGE customers said it was “very important” to add renewables.

He believes the number of customers willing to pay for renewables has grown, in part because the cost of solar energy is one-fourth of what it was eight years ago due to improvements in the technology, and wind farms are getting more efficient, too.

The company has hinted at this direction with recent news that it plans to ask the Wisconsin Public Service Commission to build two solar projects in Middleton, including the installation of 1,700 solar panels on the Middleton Municipal Operations Center on Parmenter St., and a smaller installation on the roof of the Middleton Police Department. MGE notes the Energy 2030 framework is aligned with the 25% renewable energy goals — by 2025 — of the city of Madison and the municipalities of Middleton, Monona, and Fitchburg, and the renewable energy goals of Dane County.

To meet its Energy 2030 goals, MGE will need more solar installations like Middleton and more wind installations like the wind farms it has in Kewaunee County and in Iowa. Before it expands solar, MGE wants to evaluate the Middleton solar installation pilot, which represents a unique model in that it allows customers to participate without a long-term commitment and without a large upfront payment — two features that were adopted based on customer research.

Other solar models require large, upfront payments, which has served as a disincentive to customer participation. “We’re looking to get approval, get it built, and make sure we understand the market [before doing more],” states Wolter.



Peaking prices

With regard to future rates, MGE says it anticipates researching and testing the aforementioned innovative pricing and rate options — time-varying rates and demand rates — that encourage customers to shift electric use to other times of the day. In its framework, MGE specifically mentioned different pricing options to facilitate electric vehicle charging — it has 26 charging stations in different parking ramps and at area libraries — at off-peak times.

If vehicles are charged during off-peak times, especially midweek during a very hot stretch of weather, they can run on units that are cheaper and they won’t further tax the system during peak hours.

Pilot projects will also involve the use of smart appliances and home automation systems, as they become more readily available, to help customers conserve energy. MGE plans to explore strategies with customers such as using smart thermostats from Nest, a company American Family Insurance already is partnering with, to reduce air-conditioning load at peak times.

According to Wolter, there are already 2,500 customers in MGE’s service territory with Nest thermostats, and the pilot projects could result in many more. “Tying our customers’ smart technology with our metering technology is something we will be looking to do,” Wolter says. “Nest thermostats are a good example of how customers’ technology will integrate with what we’re doing.”

MGE cautions that it might be necessary to modify these plans due to evolving technology and markets, and due to changes in regulations, laws, or statutes. If any of these scenarios unfold, more community engagement will be needed.

The overall Energy 2030 framework does not require approval by the PSC, but individual projects like individual solar and wind installations would require the commission’s blessing.

Energy de-central

Tyler Huebner, executive director of Renew Wisconsin, calls the framework a good start and says the 30% renewable goal is achievable. He also notes that wind and solar are coming down in price, and he praised MGE for its community energy conversations, which is aligned with the trend of electric transmission becoming less centralized. “The customers are now providing some of the energy to the system,” he notes, referring to solar installations.

Huebner says that MGE’s public collaboration is fairly unique and depending on what unfolds, it could serve as a model for other utilities statewide and nationwide. “We’re happy to see MGE put these goals out there for renewable energy adoption,” he states, “but a lot of details still have to be worked out.”

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