Policy Documents

Tip Sheet: Wisconsin Renewable Portfolio Standard

March 28, 2013

Problem

In 1998, Wisconsin legislators established the state’s first renewable requirement. Since then, the law has been rewritten numerous times, culminating in a Renewable Portfolio Standard (RPS) that currently requires utilities to generate 10% of electricity from sources such as wind and solar by the end of 2015.

The mandate will mean added costs to build and maintain renewable energy capacity and to deliver the energy. Those costs are likely to be passed down to businesses and individuals.

A joint report by the Wisconsin Policy Research Institute and Beacon Hill Institute estimates the RPS mandate will raise the cost of electricity by $208 million for consumers in 2016. This increased price for energy will decrease investment by $18 million and lower employment by 1,780 jobs.1

This system unfairly dictates what type of energy ratepayers must consume, forcing them to pay higher rates for more-expensive and less-reliable energy. This reduces the buying power of virtually the entire economy.

Solution

Energy consumption is not a problem, it’s a solution. There is evidence that tremendous socioeconomic benefits ensue when efficient energy systems are created through market forces.

A repeal of the state renewable portfolio standard would lower costs for consumers and foster job creation. This would produce more long-term economic benefits for the state than the temporary and artificial “green jobs” created by this mandate.

Policy Message

Point 1: Renewable energy is currently more expensive per kilowatt hour (kWh) than conventional fossil fuels, and those higher costs are being passed on to ratepayers.2

Point 2: Energy costs are regressive, so increases will most directly affect seniors who primarily live on a fixed income and low-income families with the least capacity to absorb higher energy costs.

Point 3: “Green energy” supporters may be able to point to individual investment projects and jobs from the RPS, but they don’t count the jobs lost to higher energy costs. Those jobs aren’t as easy to identify, but they are just as important.1

Point 4: RPS mandates will cost Wisconsin $788 million in higher electricity costs between 2013 and 2016.3

Point 5: Wind and solar technologies are intermittent and thus require fossil fuel generators to back them up. Running fossil fuel generators in this way can emit more pollutants than if they were used as primary power sources.3

Point 6: Wind and solar technologies are also diffuse, which means harnessing them requires copious amounts of land, resulting in habitat reduction for wildlife and even endangerment.4

References

1. “The Economic Impact of Wisconsin’s Renewable Portfolio Standard,” Wisconsin Policy Research Institute. http://heartland.org/policy-documents/economic-impact-wisconsins-renewable-portfolio-standard

2. “Levelized Cost of New Generation Resources in the Annual Energy Outlook 2011,” U.S. Energy Information Administration. http://205.254.135.24/oiaf/aeo/electricity_generation.html

3. “State’s renewables mandate a loser,” Milwaukee Journal Sentinel. http://www.jsonline.com/news/opinion/states-renewables-mandate-a-loser-5d98838-199615881.html

4. “Wind farm vs. wildlife,” The Spectator. http://heartland.org/policy-documents/wind-farms-vs-wildlife