Small businesses would be harmed by change in energy rates

The business imperative to “decarbonize” was the topic at a timely forum held by Wisconsin Business Alliance, hosted by CUNA Mutual, and attended by over 60 local businesses last week. Walmart and other large retailers now require their suppliers to report their carbon output, and carbon accounting is becoming a reality for businesses that want to compete in the global marketplace.

“Carbon reduction is a leading performance indicator of efficiency and is also a strategy to retain customers, reduce risk, and spur innovation,” said Tom Eggert, executive director of the Wisconsin Sustainable Business Council, at the Carbon 101 event.

But if businesses are served by utilities addicted to coal, they’ll be at a competitive disadvantage. Facebook, Microsoft, and Google recently made low-carbon electricity sources a key factor in locating data centers in Iowa. Iowa produces 28.8% of its energy from renewables, while Wisconsin stands at only 6.8%.

MGE commits to coal while penalizing efficiency and renewables

After looking into MGE’s public filings, a group of local energy experts has concluded that MGE’s commitment to coal is projected to last decades. MGE’s ownership shares in coal plants supply a full 70% of electricity to the Madison market. These plants have been plagued with massive cost overruns, resulting in over $1 billion in bailouts in the form of rate hikes approved by the Public Service Commission. The filings also indicate that MGE intends to run the Columbia coal-fired plant until 2038 and the Elm Road coal-fired plant until 2050.

In our analysis, MGE has shown much less commitment to solar and wind than the public has been led to believe. From 2009 to 2013, the growth in MGE’s ownership of solar- and wind-generated electricity was 5% and 0% respectively. Conversely, in the United States, total installed solar and wind capacity grew 34% and 81% during the same period. According to the Solar Electric Utilities 2013 rankings, that would rank MGE at a disappointing #110 among its utility peers.

Unfortunately, Madison Gas & Electric has proposed big changes in 2015 that reduce incentives for saving energy and using renewables. Hiking the fixed fee by 80% and modestly lowering the energy cost per unit sends a price signal to use more energy, not less. MGE, along with other Wisconsin utilities, is restricting companies’ control of their energy bills and pulling the plug on technologies that can reduce overhead costs. Fifty local businesses from the Madison area have responded by signing an open letter asking MGE to withdraw its proposal.

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MGE has argued that the rate change is about fairness, but when pressed at a local business forum, MGE’s assistant vice president of energy planning, Greg Bollom, admitted that no customers had complained about the current rate structure.

The path forward

Public comment on MGE’s billing plan is being accepted online by the Public Service Commission through Oct. 8. MGE has offered to engage in a belated community dialogue on the issue, but only after the PSC makes a ruling. MGE’s offer would be sincere if MGE postponed these major decisions until after the community dialogue. There is simply no rational imperative, economic or otherwise, to implement these fundamental changes before that conversation occurs.

One place to start is within business and economic development circles, as regions and states friendly to clean jobs policies have had their economies kick-started through the rapid deployment of solar choice. A recent article by Business Insider revealed the number of solar workers in the U.S. has recently surpassed the number of coal workers.

MGE should also consult the City of Madison’s Sustainability Plan from 2011. The plan, a two-year community conversation, included representation by Madison Gas & Electric along with elected officials, community members, businesses, and other stakeholders. The adopted plan envisions and commits Madison to expand energy efficiency, solar power, and a reduction in our city’s carbon emissions by 50% by 2050.

Mitch Brey is a campaign organizer at RePower Madison.