Renewable Portfolio Standard

A Renewable Portfolio Standard (RPS) is a policy requiring the use of renewable energy. Sometimes called a “Renewable Energy Standard” or “Renewable Electricity Standard,” they often set a minimum for the percentage of electricity sold in a state that comes from renewable sources.

In Wisconsin, the current RPS will require about 9.6% of all electricity sold in the state to come from renewable sources by 2015.[1]

There are many advantages to having an RPS in place. By spurring renewable energy development, they expand the renewable energy marketplace, strengthening the industry and creating jobs. They also diversify the sources of energy, which helps reduce risk and keeps the cost of energy more steady. And most importantly, by cutting down on the need to burn dirty fossil fuels, they keep pollution out of our air and water.

Key Points

  • Wisconsin sends over $12.5 billion out of state every year on average to purchase fossil fuels.[1]
  • More than 80% of Wisconsin voters support a standard requiring 30 percent of our energy to come from renewable sources.[2]
  • Renewable energy can bolster Wisconsin’s economy, create thousands of jobs in the state, and reduce air and water pollution.
Clean Wisconsin's Work

Clean Wisconsin is working hard to protect and expand our state’s renewable electricity standard.

This work is critical to cut down on the billions of dollars we spend purchasing dirty fossil fuels that diminish the quality of our air and pollute our lakes, rivers and streams with toxic mercury. Our dependence on those dirty fossil fuels drains our economy, damages our environment and threatens the health of our families.

Clean Wisconsin Media and Materials

Questions and Answers

What is Wisconsin’s Renewable Portfolio Standard?
Wisconsin first required utilities to generate power from renewable sources in 1998 and passed the state’s first RPS in October of 1999, requiring 2.2% of electricity sold in Wisconsin to come from renewable sources by 2012. This RPS was expanded in 2006 to a goal of 10% of electricity from renewable sources by 2015. Due to the way the RPS was set up, the estimated net result is actually estimated to be about 9.6% of all of Wisconsin’s electricity coming from renewable sources by 2015.[3]

How does the RPS in Wisconsin work?
Each Wisconsin electric provider has a unique RPS requirement, based on their renewable “baseline” of the percentage of renewable electricity they were providing in the years 2001-’03. Investor-owned utilities, municipal utilities and electric cooperatives are all obligated to comply with the RPS. Each electric provider was required to maintain their 2001-’03 baseline renewable percentage for the years 2006-’09. From 2010-’14, each electric provider must provide an additional 2% renewable electricity above their baseline percentage. From 2015 on, each electric provider must provide a total of 6% above their baseline renewable percentage.[4]

How does Wisconsin’s RPS compare to those in other states?
While Wisconsin was one of the first states in the nation to pass RPS policies, the goal of Wisconsin’s RPS is now rather low compared to other states. More recent RPS policies tend push for a higher percentage of renewable energy further into the future. For example, the state of Colorado has a requirement that 30% of electricity provided by investor-owned utilities come from renewable sources by 2020. This includes the utility Xcel Energy, which is also required to meet a goal of 30% by 2025 in Minnesota, but much less in Wisconsin.[5]

What renewable energy technologies are eligible for inclusion into the Wisconsin RPS?
The technologies that count as renewable sources of energy for Wisconsin’s RPS include: fuel cells using renewable fuels, tidal or wave power, solar thermal electric, solar photovoltaic, wind power, geothermal technology, hydroelectric, and biomass (which is defined as “a resource that derives energy from wood or plant material or residue, biological waste, crops grown for use as a resource, or landfill gases”). Bioenergy technologies that use garbage or non-vegetation-based waste and were in use before January 1st, 1998 are also eligible. Facilities that have biomass co-firing (biomass used to create power along with a non-renewable resource) can be counted in an amount equal to the product of the maximum amount of electricity that the facility is capable of generating and the ratio of the energy content of the biomass fuels to the energy content of both the biomass and conventional resources.[6]
In 2010, the RPS was changed to allow certain resources that produce a measurable and verifiable displacement of conventional electricity resources to also qualify as eligible resources.[5] In 2011, the WI PSC developed rules in Docket 1-AC-234 that allowed these additional eligible technologies: solar water heaters, solar light pipes, ground source heat pumps, and installations that generate thermal output from biomass, biogas, synthetic gas, densified fuel pellets or fuel produced by pyrolysis.[5]
Renewable energy produced outside the state is also eligible, but the electricity generated by such installations must only be delivered to Wisconsin consumers.[5]

Is there a national Renewable Portfolio Standard?
There is currently no national renewable electricity standard, although several bills for such a standard have been introduced to Congress in past years. The most recent RPS legislation was the Clean Energy Standard Act of 2012, introduced by Senator Jeff Bingaman. According to the US EIA, if enacted the bill would increase demand for renewable energy “by 42% over baseline projections in 2025”.[7]

What are Renewable Resource Credits (RRCs)?
Renewable Resource Credits are the mechanism for providing proof that are a certain amount of renewable energy has been produced. They represent not only the amount of electricity produced (an RRC usually represents 1 MWh), but the environmental or non-power attributes of renewable electricity generation.[8]  In many states that have RPS policies, RRCs can be used by utilities to meet their renewable energy mandate.[9]  For example: if Utility A is at risk of not reaching their RPS goals but Utility B has created more than their RPS goal, then Utility B can sell its excess RRCs to Utility A, which can be used to fulfill their RPS requirements. In Wisconsin and many other states, these RRCs are tracked through the “Midwest Renewable Energy Tracking System.”

What are the consequences if Wisconsin utilities do not meet their RPS requirements?
Utilities may request that the Wisconsin Public Service Commission (PSC) grant them a delay in complying with their annual requirement if the utility demonstrates a “good faith effort” to comply and can demonstrate any of the following:

  • Compliance will have an undesirable impact on reliability of service
  • Compliance will result in unreasonable increases in ratepayers rates
  • There have been delays in receiving required siting or permitting  approvals
  • Transmission constraints that interfere with the economic and reliable delivery or electricity derived from renewable energy resources to the provider’s system.[4]

There are no provisions for punishment if the state does not reach its goal. On June 1, 2016, the WI PSC must report whether or not the state has reached its goal and if it has not, how the goal can be achieved.

How does the RPS affect the electric rates of consumers?
According to the most recent report published by the PSC, between 2008 and 2010 all electricity sold from new facilities associated with the RPS accounted for a total of around $191 million, a rate impact of 1.00%, above 2006 electricity costs.[10]  At the same time, data from the U.S. Energy Information Administration shows that the 2010 electricity prices were up a total of 20.4% overall compared to 2006.[11] In other words, renewable energy projects accounted for a less than 1/20th of the total increase in Wisconsin electric rates.

What would be some benefits of an enhanced renewable electricity standard?
By increasing the amount of renewable energy being produced in Wisconsin, we can help displace some of the old, dirty fossil fuel based energy currently being utilized by the state. Decreasing the use of fossil fuels in the state will help reduce Wisconsin’s carbon footprint and contribute mitigating climate change.  Limiting our use of fossil fuels will also reduce air and water pollution and help restore Wisconsin’s environment to its natural state.
An enhanced renewable energy standard would also increase the amount of green jobs in Wisconsin. According to a study done by the Renewable Energy Policy Project, an increase in RES standards to 25% by 2025 would add around 25,000 green jobs to the Wisconsin economy.[12]
More renewable energy in Wisconsin would also mean more money would stay in the Wisconsin economy. Instead of sending billions of dollars out of the state for coal and natural gas, that money could be spent on developing new renewable energy projects within Wisconsin’s borders.

Quick Facts
  • 29 states plus Washington, D.C. have RPS policies, with seven more states having non-binding goals. Iowa was the first to introduce a form of RPS in 1983.[5]
  • Wisconsin became the second of the eight Great Lakes states to adopt a renewable portfolio standard in 1999. However, it is now the weakest of the 7 mandatory standards (Indiana has only a voluntary goal).[5]
  • Wisconsin’s current RPS has a goal of 10% of electricity sold in the state to come from renewable sources by 2015, but will likely only require a total of about 9.6% (the exact amount varies by utility).[3]
  • As of 2011, just under 9% of Wisconsin’s electricity came from renewable sources. This amounted to over 6 million megawatt hours,[5] but was only 1/1000th of our total renewable energy potential.[3]
  • According to recent polling, 84 percent Wisconsin voters support expanding Wisconsin’s RPS to require 30% of electricity to come from renewable sources.[2]
  • Wisconsin sends over $12.5 billion out of state each year to import fossil fuels.[1]
  • By 2010, Wisconsin’s Renewable Portfolio Standard had raised electrical rates by only 1% from 2006 levels, less than 1/20th of the total rate increase during that time, while leading to nearly $2 billion in new investment in renewable energy technologies.[10]

For more detailed data see the on Wisconsin’s RPS, see the “Wisconsin Data, Trends, and Legislation” section.

Wisconsin Data, Trends, and Legislation

Wisconsin relies on out-of-state fossil fuels to produce our energy. The state has no coal, oil or gas reserves, so billions of dollars are spent each year purchasing fossil fuels. In turn these fuels diminish the quality of our air and pollute our lakes, rivers and streams with toxic mercury. This drains Wisconsin’s economy, damages the environment and threatens the health of Wisconsin families. At the same time, Wisconsin has an abundance of natural resources, a strong manufacturing base and superior agricultural capacity. As a result, Wisconsin has the tools it needs to replace fossil fuels with clean energy harnessed from the sun, wind and crops.

 Transitioning toward clean, renewable energy in Wisconsin can clean the environment; improve health; keep billions of dollars circulating in the state economy; create thousands of jobs manufacturing, constructing and maintaining clean energy technologies; create new sources of revenue for Wisconsin farmers; and make the state more resilient and energy independent. It is also an important step in reducing Wisconsin’s greenhouse gas emissions.

More data on Wisconsin’s RPS

Overview:

  • Wisconsin’s RPS is estimated to require 9.57% of all electricity sold to Wisconsin consumers to come from renewable sources by 2015, although there is also an overall goal of 10%.[3]
  • The Public Service Commission of Wisconsin projects that about 6.7 million MWh of renewable energy will be needed to meet all 2015 RPS requirements, with 7 million MWh required to meet the 10% goal.[3]
  • Based on the average emissions from non-renewable resources*, meeting the 10% goal will cut air pollution by 76,000 tons of nitrous oxides, over 14,000 tons of sulfur dioxide, and nearly 12 million tons of carbon dioxide equivalent emissions.
    *2012 EPA emissions data for coal, natural gas, oil, and nuclear power plants in Wisconsin (2009 generation year)[13]
  • An estimated equivalent of 300,000 Wisconsin homes will be powered by renewable energy if we meet the 10% RPS goal.[14]

Current Status:

  • In 2011, 8.88% of Wisconsin’s electricity came from renewable sources due to the RPS (6,094,154 MWh).
  • The largest portion of renewable electricity sold in Wisconsin in 2011 came from wind (about 60%), with hydroelectric (23%) and biomass (17%) sources coming next.[3]
  • Just less than half (49.4%) of renewable electricity sold in Wisconsin in 2011 was generated within the state, with out-of-state wind representing the largest source of renewable electricity (43%).[3]
  • As of 2011, there were 9 million MWh worth of Renewable Resource Credits that have been banked and are available for use by Wisconsin utilities in future years.[3]

Progress Toward Goals:

  • In 2011, all 118 Wisconsin electric utilities met their annual RPS requirements and six out of the seven large providers had already substantially met their estimated 2015 RPS target.[3]
  • Of all 48 entities with RPS obligations, 75% (36) had already reached the levels of renewable electricity sales that will be required in 2015, and four more were very close.[3]

Economic Impact:

  • Wisconsin’s RPS raised the total cost of electricity sales in the state by only 1% ($190.0 million) between 2008 and 2010, while leading utilities to either build or purchase 1,428 MW worth of new renewable energy capacity.[10] At the same time, data from the U.S. Energy Information Administration shows that the 2010 electricity prices were up a total of 20.4% overall compared to 2006.[11] In other words, renewable energy projects accounted for a less than 1/20th of the total increase in Wisconsin electric rates.
  • Wisconsin’s RPS has led to $1.7 billion in new investment (capital costs for new utility-owned renewable generation approved by the Public Service Commission between 2007 and June 2012), with only $191 million in rate impact.[10]

Future Potential:

  • A 30% RPS in Wisconsin, which is supported by 84% of voters, could power 2.4 million homes, which amounts to over 90% of all homes in the state.[14]
  • Wisconsin has the potential to generate 6,346,913 GWh of electricity from renewable sources a year. That’s over 1,000 times as much electricity as was generated in 2011, and over 90 times as much as all electricity currently used in the state.[15]

Current Law

Wisconsin’s current RPS has been created through the following:

  • 1998 Reliability Act (1997 Wisconsin Act 204): Required regulated utilities in eastern Wisconsin to install a total of 50 MW of new renewable energy by December 31, 2000.  Each utility had a different share that was determined by the PSC.[6]
  • Reliability 2000 (1999 Wisconsin Act 9): This was the original RES for the state of Wisconsin. It required investor-owned and cooperative-based electric utilities to obtain at least 2.2% of the electricity sold to customers from renewable energy resources by 2012.[5]
  • 2005 Wisconsin Act 141: This was an amendment to 1999 Wisconsin Act 9 that increased the percent of renewable energy use for each utility up to 10% by 2015. These standards are encoded in Wisconsin Statute Section 196.378.[6]
  • Wisconsin 2011 Act 34: This act was an amendment to allow large hydroelectric facilities (>60 megawatts) to be used for RPS compliance beyond 2015, specifically including hydroelectric facilities located in Manitoba, Canada.

The details of the current law are as follows:

  • Wisconsin’s RPS applies to all 118 electric providers that serve retail customers in Wisconsin and requires annual reporting to the Public Service Commission using the Midwest Renewable Energy Tracking System (M-RETS).[3]
  • Of the 118 electricity providers in WI, three different aggregators represent 73 municipal utilities, resulting in 48 entities with RPS obligations.[3]
  • The RPS has a stated goal of 10% of electricity sold in the state coming from renewable sources, with mandatory levels set as:[4]
    • A “baseline” percentage of renewable electricity sold was set for each agency, as the average percentage of electricity sold coming from renewable sources in the years 2001, 2002 and 2003.
    • In each year, a set minimum amount of electricity sold by each agency must come from renewable sources based on a certain percentage from their average sales over the previous three years.
    • In the years 2006 through 2009, each agency had to meet the same percentage of renewable electricity sold as the “baseline” percentage (2001-2003).
    • In the years 2010 through 2014, each agency must sell an amount of renewable electricity that is 2% above the baseline.
    • In 2015 and thereafter, each agency must sell an amount of renewable electricity that is 6% above the baseline.
  • The energy sources that can be used to meet Wisconsin’s RPS include:[4]
    • Wind power
    • Hydroelectric power
    • A fuel cell that uses a renewable fuel
    • Tidal or wave action
    • Solar thermal electric or photovoltaic energy
    • Geothermal technology
    • Biomass
    • Synthetic gas created by the plasma gasification of waste
    • Densified fuel pellets made from waste material that does not include garbage, and that contains no more than 30% fixed carbon
    • Fuel produced by pyrolysis of organic or waste material
  • Utility renewable electricity requirements can be met through new utility-owned generation, through purchase agreements for renewable electricity generated by other entities, or through the use of “Renewable Resource Credits” (RRCs).[3]
  • RRCs used to meet RPS requirements can either be “banked” by utilities for up to 4 years to meet future requirements or can be can be bought, purchased, or traded with other utilities.[3]
Cited Resources
  1. Based average of most recent five years with available data (2005-2009) from Wisconsin State Energy Office. Wisconsin Energy Statistics 2010. Chapter 7: Wisconsin Expenditures for Energy.
  2. David Metz and Lori Weigel. Voter Attitudes Toward Energy Issues in Wisconsin. Fairbank, Maslin, Maullin, Metz & Associates and Public Opinion Strategies. January 9-15, 2012.
  3. Public Service Commission of Wisconsin. 2011 Renewable Portfolio Standard Compliance Report (PSC REF#:174240). Docket 5-GF-214. August 27, 2012.
  4. Wis. Stat. § 196.378
  5. NC State University, Database of State Incentives for Renewables & Efficiency (DSIRE)
  6. Union of Concerned Scientists – Wisconsin Renewable Portfolio Standard Summary
  7. U.S. Energy Information Administration. 2012. Analysis of the Clean Energy Standard Act of 2012
  8. EPA’s Green Power Partnership: Renewable Energy Certificates
  9. Wiser, R, et al. 2007. Renewables Portfolio Standards: A Factual Introduction to Experience from the United State. Lawrence Berkeley National Laboratory LBNL-62569
  10. Public Service Commission of Wisconsin. Report on the Rate and Revenue Impacts of the Wisconsin RPS (PSC REF#:166782). Docket 5-GF-220. June 15, 2012.
  11. U.S. Energy Information Administration. Average price by state by provider, back to 1990 (Form EIA-861). Retrieved 2013 from http://www.eia.gov/electricity/data.cfm.
  12. Bluegreen Alliance – How to Revitalize America’s Middle Class with the Clean Energy Economy
  13. US EPA, Emissions and Generation Resource Integrated Database 2012
  14. Clean Wisconsin – By the Numbers – Building Wisconsin’s Clean Energy Economy
  15. Lopez et al. “U.S. Renewable Energy Technical Potentials: A GIS-Based Analysis.” U.S. Department of Energy, National Renewable Energy Laboratory. Technical Report NREL/TP-6A20-51946 (July 2012)

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