Dive Brief:
- Wisconsin's Strategic Energy Assessment 2022 finds the state's planning reserve margins will remain above 13% through the planning period, while electricity providers expect "slow but continued growth in peak demand."
- But the coal-heavy state also concluded rates were rising for all customer classes, though the report says investment is necessary to modernize the grid and comply with stricter federal carbon regulations.
- Those higher rates are hurting the state's large industries, the Wisconsin State Journal reports. One company, Charter Steel, told regulators power costs in its Wisconsin operations exceed labor and because of this it will not expand operations there.
Dive Insight:
Wisconsin's electric supply will be sufficient through 2022, according an energy assessment released this month by the Public Service Commission. And the coal-heavy state has begun collecting data on distributed energy resources, indicating they have become an increasing part of rate cases in recent years.
The state's distributed resources are over half landfill gas, with hydroelectric and biogas installations also making up a big chunk. Solar and wind installations are a tiny fraction of the resources.The state still gets about 62% of its energy from coal, according to the report.
"The shutdown of the Kewaunee nuclear facility and decreases in the cost of natural gas, among other factors, continue to change the generation mix proportions in the state," the report found. Between 200 MW and 700 MW of new generation is expected from 2016 to 2022, and utilities in the state plan to retire approximately 520 MW of existing generation by 2020.
Wisconsin State Journal points out that the state has the highest electricity costs among eight Midwest states. And industrial players, the paper reports, claim those rates are impacting their bottom line.
“Because a commodity business like steel is extremely competitive, it is vital that Charter Steel’s key input costs be competitive. This is no longer the case for electricity,” Charter Steel said in comments filed with the PSC.
The Wisconsin Industrial Energy Group told regulators that “it is particularly troubling to note in a state whose economy is built on manufacturing that in 2015, not only did Wisconsin have the highest average industrial rate when compared to surrounding states, the Midwest and U.S. averages respectively, but the growth rate from 2001 to 2015 was the highest as well."
In a statement to the State Journal, Charter Steel indicated they are not considering leaving the state and remain committed to their operations there. "That said, the non-competitive cost of electricity in the We Energies’ service territory is a key reason we are looking to expand outside of Wisconsin for future growth projects," company officials said.