Dive Brief:
- A measure passed by Wisconsin's Assembly and now being considered in the Senate would change the way the state funds energy efficiency programs, lowering funding by about $7 million, according to Midwest Energy News.
- Senate Bill 654 would fund efficiency programs through a 1.2% charge on a utility's retail sales, a change from the current charge on operating revenues. Assembly Bill 804 was passed in mid-February by a 62-33 vote.
- But lawmakers may be cutting an effective program, critics claimed. A report by Cadmus released in December found $3 in customer benefits for every dollar spent by the program, and more than $6 when broader economic benefits were considered.
Dive Insight:
Efficiency advocates argue this: If every dollar spent returns more than $1 in savings, utilities should be investing in all economic efficiency. But states don't always see it that way.
Take Indiana, for example. Last year, the state's Utility Regulatory Commission issued a report finding the Good Cents energy program was saving Indiana $3 for every $1 spent on residential efficiency, before being eliminated in favor of utility-defined goals.
Those numbers are similar to a finding by Cadmus last year, which said Wisconsin's Focus on Energy program was saving between $3 and $6 per dollar spent (the higher figure includes broader economic savings), and in the process, boosted manufacturing jobs in Wisconsin. But despite that, lawmakers are considering changes to how the program's funds are calculated and in the process advocates say they may leave savings on the table.
“This change is going to hurt customers, they’ll have less opportunity to take advantage of the programs that Focus on Energy offers, and those programs help customers lower their bills,” Mitch Brey, campaign organizer of the citizen group RePower Madison, told Midwest Energy News.
Changes to how the program is funded could cut $7 million from its $100 million annual budget. We Energies is supporting the change, arguing the current structure allows for a double charge.
“The ‘double-charge’ issue occurs when a utility sells electricity at wholesale. Purchasers of that wholesale electricity – such as municipal utilities, cooperatives or other utilities – also collect funds from their customers for Focus on Energy,” a spokesman for the utility told Midwest Energy News.
According to the Cadmus report, from 2011 to 2014 the program generated more than $600 million in net economic benefits and was expected to generate more than $2.2 billion – approximately $92 million per year – from 2015 to 2038. Across the same four-year period, the report estimated annual net employment growth ranged from approximately 1,000 to 2,000 full-time equivalent jobs.
"Primarily because residential and business customers continue to spend disposable income from bill savings, annual net job growth is projected to continue at lower levels — approximately 544 FTE jobs per year — thereafter," the report concluded.