Take Five: Renew Wisconsin head says EPA rules will push Wisconsin in right direction

Last week, we interviewed Wisconsin Manufacturers & Commerce’s Scott Manley to get his take on proposed Environmental Protection Agency rules that would administratively establish a cap-and-trade plan to limit carbon emissions. (Click here to read that interview.) Suffice to say, Manley is not a fan, citing potential damage to Wisconsin’s economy. For a different take on the proposed rules, IB turned to Tyler Huebner, executive director of Renew Wisconsin, who believes Wisconsin is well positioned to use these proposed rules to its economic advantage. Here are some excerpts from our recent Take Five interview.

IB: You’ve seen Scott Manley’s criticisms of the Obama administration’s recent carbon proposals. What’s your take on the proposed rules?

Huebner: I think they present a great opportunity for the state of Wisconsin to benefit from energy technologies, which are going to be a significant economic driver in the 21st century. We’ve had a lot of success in the past with energy efficiency and with renewable energy programs. Based on the way the rules are proposed, we’ve already made almost half of our distance from reducing our carbon from these plants, from 2005 through today, on our way to 2030. So we’ve got great programs that have worked well in the past. We’ve got a head start. The flexibility in the [EPA] rules will enable us to really find a Wisconsin way to make these rules work for us and help the economy, not hurt it.

IB: Allow us to play devil’s advocate and read a critique from U.S. Sen. Ron Johnson: “Wisconsin is especially vulnerable to regulations that artificially make electricity costly because so much of our economy depends on manufacturing, and manufacturing depends on power.” Does he protest too much, or does he have a point?

Huebner: He definitely has a point. We have a strong manufacturing base, and energy costs are a very important part of doing business. Frankly, our energy rates have been going up for a couple of decades, at a breakneck pace. We have the sixth-highest rate increase from 1990 to 2012 out of all 50 states plus Washington, D.C.

In relationship to that, we used to have lower rates than Iowa and Minnesota, and now we have much higher rates than Iowa and Minnesota. Iowa gets about 30% of its energy from renewables. Minnesota is coming up on 15%, so it’s definitely not the case that reducing carbon or increasing renewables and efficiency is the only thing that raises rates.

Frankly, in Wisconsin, the research that was done in 2012 shows the renewable increase had cost less than 1% more in rates to Wisconsin rate payers, so the solutions that are out there, like energy efficiency and renewable energy, are as cost effective as they have ever been.

IB: Do you agree with one criticism of the president’s proposal, which states that he’s trying to move us away from coal, especially with the lack of available carbon capture and storage technology? What’s the motivation you see here?

Huebner: Well, I think the overall motivation is the president and his administration sort of put a stake in the ground that we care about carbon because they believe it’s causing climate change. In the long run, the cost of adapting or dealing with the effects of potential storms or rising waters due to climate change is going to be more expensive than dealing with it now. The emissions from our power sector make up about 40% of our national emissions, which is the largest source. I think transportation is second, but it’s easier to address coal than transportation because there are on the order of 600 coal-fired power plants in the U.S., as opposed to hundreds of millions of vehicles. So it’s a problem that’s addressable.

For some states, it’s going to be easier. Wisconsin has already started this transition from coal to natural gas, so that’s going to be easier for some states than others. Twenty-nine different states, including Wisconsin, have a renewable energy standard. Ours is 10%. At the time, it was the highest when we passed it in 2006. Now, among those 29 states, it’s the lowest. Every other state that has a renewable standard has something greater than 10%. To get us most of the way to that 10%, it has cost us less than 1%. The cost of wind energy and solar and bioenergy are coming down, as opposed to the cost of new coal or new natural gas-powered plants, which are going up. So it sets up well for renewable energy over the medium and long term.

Committing ourselves to a higher renewable standard would push Wisconsin even more. A couple of things are coming in place here that will push us to more renewables. Hopefully, we can get a higher standard as well within the state, but the fact is that this [federal] clean power plan will lead to more renewables for the state of Wisconsin. I also think the proposed American Transmission Co. power line [Badger-Coulee] is going to connect us with more wind power from North Dakota, Minnesota, and Iowa, and that power line would bring electricity from the western part of the state down into the Madison area.

IB: You mentioned that the costs of renewable forms of energy are coming down through each product iteration. Could you explain to an everyday person who is skeptical about climate change why we must enable renewables with policies that raise the cost of fossil fuels, instead of relying on the natural iteration from year to year?

Huebner: My understanding is that basically, the EPA has given each state an emissions budget, and the flexibility to propose a plan to meet that budget. So it’s not the case, necessarily, under that kind of scenario, that the cost of fossil fuel-generated electricity is going up. It may, if we establish some kind of a cap-and-trade system or if we propose a tax to do that, but there possibly are ways for us to do that through ramping up our energy-efficiency investments, ramping up our renewable energy investments, and bringing offline some of the coal plants that are a little bit older, perhaps contributing to higher emissions, [and replacing them] with some of the newer natural gas or even the newest coal plant. We may be able to get there without significantly raising the cost, and that’s the beauty of this rule because it’s so flexible.

(Continued)

 

IB: What are the flexible features that give you so much confidence that this is not going to hurt Wisconsin?

Huebner: Just that they’ve identified an overall budget, an overall target for emissions, and then specified that there are so many different ways you can get there. You can get there from increasing natural gas usage as opposed to coal, you can get there through energy efficiency, you can get there through more renewables, and there are a number of other technologies that can be used to help us get there. Through our existing successes, such as our efficiency program Focus on Energy and our success in reaching 10% renewables with relatively low cost, that shows there are definitely ways that we can do this while minimizing energy rates.

On the plus side of the equation are investments in efficiency and renewables in Wisconsin, which would be a tremendous economic boon for the state. Study after study has shown that more jobs are created through energy efficiency, solar, and wind than are created through coal and natural gas. The best thing about those jobs is they will be based in Wisconsin because if we’re going to fix Wisconsin by getting the buildings and homes to be more energy efficient, that work has to be done in Wisconsin. If we’re going to put solar panels on roofs in Wisconsin, if we’re going to put manure digesters on farms, all that work can be done and should be done by Wisconsin employees, Wisconsin citizens.

That is maybe the side that the WMC spokesman is not really talking about. He’s thinking about the manufacturers and making sure their kilowatt per hour prices don’t go up. There is a huge segment of the economy that can be really, really expanded through energy efficiency and renewable energy development here in the state of Wisconsin.  That’s especially important because right now we spend about $12 billion a year importing oil, coal, natural gas, and nuclear to Wisconsin. We don’t have any of those resources ourselves, so that’s $12 billion that’s leaving the state. If we instead replace that with energy efficiency and renewables made in Wisconsin, we’re going to get benefits all the way through the whole life cycle.

IB: I take it the state has halted its progress in that area, at least too much to your satisfaction?

Huebner: Yes. For Focus on Energy, the budget had been proposed to go up in 2011 for one year, but then it was ratcheted back down. Since then, the latest report from Focus on Energy showed that for every $1 invested, they are getting $3.40 in savings, which is just a tremendous return on investment.

On the renewable side, the 10% renewable energy standard is in place and has been kept in place. It’s set to be 10% by 2015, and then the question is out there — what’s next? We sort of wildly succeeded getting to 10% renewables here in the state at minimal extra cost to customers, and the states around us are going for 25%, 30%. Iowa is already at 27%, so we sort of have this competition with our neighbors, and they are passing us by in a hurry.

We’ve got a lot of Wisconsin businesses that already are leading the way on the transition. We’ve got Johnson Controls in Milwaukee, which is a global leader in energy efficiency. We’ve got S.C. Johnson down in Racine, which put up wind turbines and so they are using wind power to make Windex. We’ve got Gundersen Health System based in La Crosse, which is on its way to 100% energy independence by 2015. We’ve also got Organic Valley, which is putting up some wind turbines, and Epic here in Dane County, which has put up a large solar array and then is also purchasing wind turbines here off Hwy. 12.

So we have got a lot of corporate leadership that is doing this for a variety of reasons — cost, locking in energy rates, or doing what they see as a good corporate thing to do from a sustainability standpoint.

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