Friday, July 25, 2008

Wisconsin Climate Report: Some Considerations

The Wisconsin Climate Report was released yesterday, and it will be controversial. Jim Ott (R-Mequon) has already made a few salient points, but there are other nuggets in the Report's Appendix E which are of interest. (Page reference are from Appendix E pagination.) Following that, we'll look at sections of the main Report. Some of the report is actually funny. Some of it is ludicrous. ALL of it will cost money. A LOT of money. And the Report's assumption is that the State treasury is damn near limitless.

Economic Impacts: Under all of the policy scenario modeling runs, both those with and those without cap and trade policies, the state’s economy, employment and personal disposable income increased over the 2006 to 2024 time period, but at a slightly lower rate of increase than projected under the Reference Case. The TAG had concerns that the REMI runs, including the robust economic forecast, may have been somewhat insensitive in assessing economic impacts (PP 7/8)

IOW, it's possible that the costs will kill off economic growth.

By the way, the Report also observes that Wisconsin might either import or export electricity in the future. If we import it, we pay more but emit less. If we export, we pay less, but emit more--in which case we pay more anyway because our utilities will be required to emit less.

Electricity Demand Growth: Annual electricity demand growth rate is cut in half from two percent in the Reference Case to one percent in under Policy Case 1. This can be attributed to a number of factors including the enhanced energy efficiency policy, and to higher energy prices resulting from the enhanced renewable portfolio standard policy. This reduction in electricity demand results in lower electricity bills in 2024. While the rates that utilities charge customers increase an average of 8 percent above Reference Case in 2024, electricity bills are reduced by between 12 and 15 percent depending on the rate class. The experience of individuals and particular businesses may vary significantly from these projections. (P 8)

Translation: "We're not exactly sure why demand growth is cut by FIFTY PERCENT under our Policy Case 1, and don't be bothered by the EIGHT PERCENT increase in electricity costs, because overall, electric bills will be lower in 2024, but we don't know whether that's because all the businesses left the State, or because all the individuals left the State (your mileage may vary, don't blame us.)"

The Report did use "high-end" estimates for costs of coal, petroleum, and natural gas, which is a credit to them. It is entirely possible that prices will be less than they assume, which will be beneficial to ratepayers. (P 13)

Now back to the main Report itself (Page numbers will correspond with Report page numbers.)

This policy recommends that Wisconsin advocate for a dramatic increase in federal research and development (R&D) spending related to achieving substantial reductions in GHG [greenhouse gas] emissions. At the state level, R&D funding for renewable and other low carbon technologies should be significantly increased to enable Wisconsin to become a leader in these areas. In addition, the state should support R&D of carbon capture and storage technologies in order to achieve, if feasible, rapid development and deployment on a commercial basis of coal plants with this technology. Finally, R&D funding should be provided to enhance Wisconsin’s ability to adopt to climate change, including funding for the Wisconsin Initiative on Climate Change Impacts, a partnership between the UW-Madison and the Department of Natural Resources (P. 38)

That will certainly help the Legislature reduce the State's ~$1 billion structural deficit, no?

...the policy recommends that the state adopt annual targets for reducing electric load and natural gas use through energy efficiency. The targets for 2009 would be to reduce electric load by 0.75% and natural gas use by 0.5% from what they would otherwise be without the energy efficiency and conservation measures. The annual reduction targets would increase gradually until they reach 2% for electric load and 1% for natural gas use in 2015 and each subsequent year. (P. 39)

That happens to be a lot of reduction. The Report calls it "aggressive."

How to get there?

An objective of this effort would be to achieve net zero energy commercial buildings by 2030
and residential buildings by 2040
(P. 41)

This policy recommends that the state set a strong example by taking a number of steps to
reduce its GHG emissions through energy conservation, energy production, building efficiency,
transportation use, and purchasing policies
(P. 41)

You think that means the Capitol's heat and a/c will be turned off? The Governor's Mansion? The UW-System's? Or that the Governor will use a Prius instead of an SUV?

They have other ideas.

..requires rental properties to install energy efficient lighting in common areas and all mounted fixtures (other than fixtures controlled by dimmer switches and fixtures in appliances). It also would require exit lights to use light emitting diode bulbs (LEDs).

...proposes legislation to create state appliance/equipment efficiency standards based on a model bill developed by the Appliance Standards Awareness Project...[including] new commercial and
industrial boilers, new residential furnaces and furnace fans, and compact audio equipment...
state should request a waiver of the existing federal standard for commercial boilers and
residential furnaces in order to adopt higher standards
(PP. 40/41)

Compact AUDIO equipment?

Liquid propane gas (LPG) and fuel oil make up 17% of fossil fuel use in Wisconsin’s residential sector and are also used in large quantities in the commercial, industrial, and agricultural sectors, but these fuels are not covered by the existing Focus on Energy program. This policy recommends legislation to provide for a fee on non-regulated fuels to fund Focus on Energy conservation and energy efficiency programs for consumers of these fuels (P. 42)

So LPG and heating-oil customers will pay more to use the stuff.

This policy calls for a legislative study committee to consider the need for, and nature of,
potential mandatory, minimum energy efficiency standards triggered by specific events (e.g.
point of sale) for existing single-family home and multi-family rental units
to complement
voluntary energy efficiency programs for these sectors

Selling your home or investment property? You'll pay for the "efficiency upgrades" from the proceeds of the sale. That cap-gain just disappeared, folks. Re-arrange your retirement program immediately.

This policy calls for a major state-sponsored energy efficient housing retrofit and
rehabilitation program for existing housing stock in lower income areas
(urban and rural), funded in large part by allowance fees and auction revenues from a cap and trade program

So either the cap-and-trade program will be very lucrative (that is to say, expensive for the buyers of credits) OR the "large part" will be small--meaning that GP Revenues will be funding these retrofits.

And, of course, the Report has expensive thoughts about the fake "problem" of CO2:

This policy recommends that the Public Service Commission and the DNR convene a special commission to explore the potential for geologic carbon sequestration for CO2 produced by Wisconsin’s electricity generation fleet (P.43)

They'll pipe the emissions underground, or pipe them to other States to put them underground (!!)

And we'll windmill the blazes out of the Great Lakes!!

This policy recommends that the state, through the relevant state agencies, convene a
study group to look at the technical and economic potential for developing wind energy on Lake
Michigan and Lake Superior

Another electricity cost-enhancement is buried in here.

This policy recommends that the PSCW reopen the current Strategic Energy Assessment,
with all utilities subject to the SEA required by October 15, 2008 to file comprehensive GHG
emissions inventories using recognized standards. In conjunction with these filings, each utility
would: (i) identify the actions currently being taken or planned to be taken during the next three
years that will reduce its GHG emissions, showing estimated reductions, costs and other relevant information; and, (ii) identify other actions that are not included in its current actions or plans that could be undertaken by it during this period to further reduce its GHG emissions, and
identify the potential emissions reductions available, the associated costs and any other relevant

Reality time, folks. The utilities will NOT pay for these studies. YOU will. How many folks will WEenergies add to the staff to come up with this stuff? Who knows? But WEenergies does NOT care--it's a pass-through cost.

This proposal would increase the state’s RPS [Renewable Portfolio Sources] in current law to 10% by 2013, 20% by 2020 and 25% by 2025. Of the required 20% by 2020 and 25% by 2025, minimums of 6% by 2020 and 10% by 2025 would have to come from Wisconsin-based renewables (P.45)

That means we'll be burning trees, corn (!!), silage, weeds, and dried excrements. In addition, the report hints that we will be connecting cow-butts to pipelines leading to electricity-generation facilities. Maybe even deer- and bear-butts!! Invest NOW in hose-makers!!

...renewable energy and renewable resources in the existing RPS law would be expanded to include the thermal portion of Wisconsin cogeneration projects fired with biomass, as well as biogas produced in Wisconsin that is put in the gas pipeline system, solar water heating and other verifiable renewable applications that displace fossil fuel use (P.45)

Gas from contented cows!!

If you happen to buy your own windmill, you could do very well:

Utilities would be required to enter into long term, fixed price contracts to purchase all of the electricity produced by customer-owned renewable generation systems at favorable rates. The policy recommends that these advanced renewable tariffs should be based upon the specific production costs of each particular generation technology, include a return comparable to the utilities’ allowed returns, and be fixed over a period of time that allows for full recovery of capital costs (P.47)

Folks, these rather generous terms are enough to make Gary Grunau slobber spit all over the office. I'll remind you that the utilities DO NOT CARE what those "favorable rates" are--because the utilities will NOT PAY the costs--YOU will, dear reader.

The "new nukes" policy is hogwash.

The proposed policy would not mandate or encourage new nuclear plant construction, but would modify the current requirements as follows: (i) A new Certificate of Public Convenience and Necessity (CPCN) provision would be added requiring that the proposed nuclear plant must be built to meet Wisconsin needs at a cost that is reasonable and advantageous to customers in comparison with available alternatives, taking account of emission reductions benefits. If such a nuclear plant is a plant to be built and owned by a party other than a Wisconsin utility, the output would need to be sold to Wisconsin utilities to meet the needs requirement. In any event, any new nuclear plant, regardless of any changes in ownership or operational responsibility during the life of the plant, would be subject to regulation by the PSCW on a basis that is comparable to the regulation that would apply to such a plant if owned and operated by a Wisconsin public utility. (ii) The current requirement of a federally licensed or foreign nuclear waste disposal facility would be replaced with a requirement that to obtain a CPCN the PSCW must find the nuclear waste plan for the plant is economic, reasonable, stringent, and in the public interest, given the safety and other risks presented by such waste. (iii) The proposed CPCN requirements for a nuclear plant would apply to any proposed nuclear unit regardless of size and include any replacement of any existing nuclear unit. (iv) In addition to the existing right of the PSCW to apply for extension of the 180-day time limit to act on a CPCN, an additional extension could be sought by the PSCW in the case of a nuclear plant for a reasonable,
but defined period

"Economic, reasonable, stringent, and in the public interest, given...."---any 5th grader could drive a truck through the holes in that language. Nukes? Fuggeddaboutit.

Now as to your car:

This policy recommends that Wisconsin join with other states that have adopted
California rules that set mandatory minimum GHG emission standards for passenger vehicles

What about cutting your lawn, boating, 4-wheeling?

This policy recommends adopting voluntary and mandatory emission reduction measures
to reduce GHG emissions from off-road sources related to construction, agricultural,
lawn/garden care, recreational and industrial/commercial sectors

Driving your semi-, or any OTHER truck?

The task force recommends regulation to limit truck idling at depots, over night rest areas
and other long-term parking circumstances. The rule would limit idling to a maximum five
except when trucks are on the roadway during traffic, there are temperature extremes,
medical needs require engine power, powering equipment is needed to unload freight, engines
are required to idle to regenerate emission filtration devices or required maintenance procedures are conducted. Efficient trucks with 2007 or newer engines will be exempt

Bundle up, Teamsters. It will be cold out there. In the alternative, you might want to get naked when it's hot. Trust me, "temperature extremes" can be defined in very interesting ways.

Here's another GP Revenue drain, combined with a property-tax increase:

This policy recommends legislation to reduce consumption of non-renewable motor
fuels. This legislation would require that by 2012, 25% of the delivery vehicles, light trucks, and
passenger vehicles operated by the state and its largest cities have Plug-in Hybrid Electric
Vehicle (PHEV) drive trains. The state would provide grants to the affected municipalities to
offset 50% of the incremental cost
of purchasing PHEV vehicles compared to conventional
vehicles of the same make and model

And Jimmy Carter redux:

This policy recommends strict enforcement of the existing 65 mph highway speed limit, a
study of potential future speed limit reductions
, and support and recognition for voluntary speed
reduction policies by businesses and other organizations

"Reducing speed limits" translates to "increasing the semi-truck fleet numbers"--as was proven by the Carter flop. Buy stock in Kenworth.

This policy recommends education and incentives for the purchase of hybrid electric
vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs) and electric vehicles (EVs) including
encouraging businesses to allocate favorable parking for these vehicles and by providing rebates
or state-tax credits

IOW, taxpayers will subsidize folks who buy hybrids/plug-ins. Grind down the lower-end taxpayers a bit more!!

Another reference to fake-pollution here:

This policy suggests legislation with regulatory implementation and enforcement to
develop a low carbon fuel standard (LCFS) for fuel providers on a sales-weighted average. The
standard would be developed by measuring CO2-equivalent grams per unit of fuel energy

Providers could meet the standard by blending ethanol (corn/cellulosic) with gasoline, blending biodiesel with diesel (P.53)

Starve a few Mexicans. Who cares??

We hope you like to walk.

This policy recommends regulatory action and state funding to reduce vehicle miles
traveled (VMT) by individuals
. The recommendations include: (i) providing special
transportation funding for areas zoned for traditional neighborhood design, (ii) including safety
provisions for pedestrians, bicyclists, and transit vehicles in road projects along and across
corridors being improved, (iii) requiring a VMT and GHG analysis for new developments that
will receive state economic development assistance
and for projects to expand state roadway
capacity, (iv) developing a model parking ordinance that reconsiders mandatory minimum
requirements for retailers and increases pricing of street parking, incorporating parking standards based on technology and market changes, such as small parking spaces for microcars, (v) establishing multimodal accessibility as the highest goal for the state to ensure walking and
biking accessibility
, (vi) considering VMT generated by applicant facilities as a major factor in
state economic development funding decisions, giving projects with low levels of VMT per
employee preference over those that increase VMT
, (vii) considering VMT generated by
Wisconsin to be a higher priority on rehabilitation of existing infrastructure over adding new
lane-miles (fix-it-first) for funding purposes, and (vii) encouraging the Wisconsin Department of
Commerce to develop incentives for local governments to allow compact development and

There are all kinds of "Smart Development" ideas in that graf which are inimical to suburbs and ex-urbs. But if you read that stuff carefully, you also find that "economic development" efforts will look at parking spaces--the more required, the less the State wants them.

So if you're going to build a 2,000-employee factory about halfway from Jefferson to Milwaukee, your development will be DIS-favored, compared with building it smack-dab in the middle of Milwaukee, or any other municipality with bus, rail, or bike-paths.

Or unless your workers can simply walk to the factory.

And it gets even more interesting.

This policy recommends legislation to reduce GHG emissions through establishing three
programs for public and private transit alternatives: Intercity Rail, Transit Trust Fund and a
Regional Transit Authority. The policy also recommends a voluntary Travel Demand
Management (TDM) policy for employers with more than 100 employees
. The Intercity Rail
initiative would advance the proposed Chicago-Milwaukee-Madison high speed rail
improvements to Eau Claire and the Twin Cities by increasing the non-federal share to a level
that will provide greater leverage to access limited federal funding, up to $120 million. The
Transit Trust Fund would provide local units of government with up to a 50% state match for
local rail projects, such as the Kenosha-Racine-Milwaukee
and Dane 2020 rail options. The
Regional Transit Authority initiative would allow local units of government to fund transit
operations through a local sales tax of up to one half cent to help transit systems account for
. The voluntary TDM policy would promote commute trip reduction programs for
employees to reduce single-occupant vehicle use for workplace travel. Key elements of the TDM
program would include providing incentives for alternate modes, considering parking supply
constrictions, tailoring support and incentives suited for specific work sites
, combining programs
that inform employees of commuting options and making a range of commuting alternatives
(pp 54/55)

You might want to read that again. First off, is there ANY money left in the Transportation Fund?? Taxes for KRM, taxes for Dane 2020, taxes for buses, light rail--and if you employ more than 100 people, you will be "advised" by State bureaucrats.

Meaning: hire another couple of HR desk-jockeys to plan your employees' trips to/from work.

Buy a farm. It will be profitable, no matter what you do.

This policy recommends legislation to increase the availability and use of renewable
biomass and biofuels for electricity, heat and transportation by (i) creating an Energy Crop
Reserve Program that would provide incentive payments to landowners for growing perennial
grasses and energy crops
, targeting land previously enrolled in the federal Conservation Reserve
Program (CRP), (ii) providing financial support to biomass producers for the purchase of new
equipment and technology needed
to harvest, process and transport biomass feedstocks, also
replace older equipment or introduce more energy efficient equipment, resulting in further
reduction of carbon emissions, (iii) providing financial support to reduce risk and uncertainty for
biomass producers
and (iv) providing support for biomass aggregators and infrastructure such as transportation, storage and processing. Such support may include development of biomass
harvesting and classification deadlines, pilot projects, promotion of commodity markets and
exchanges, outreach to producers and users and grants to cooperatives.
Of course, if you choose to live off the taxpayers' largesse, you don't want to employ more than 99 people--otherwise, you'll have to "aggregate" and "farm" where there are sidewalks, bike-paths, and busses.
Schools should be located on farms. Dairy farms are ideal.

To establish the state as a leader in the use of biomass, the policy recommends: (i)
utilizing solid/liquid/gaseous fuels derived from biomass to provide 25% of the energy needs for
state owned or occupied facilities by 2025
, (ii) providing incentives to school districts that use
biomass for heat or electricity by excluding the capital cost of biomass systems, fuel,
maintenance, and any purchase cost of heat or electricity from revenue limits under the school
aid formula
and (iii) excluding the cost of biomass systems, fuel, maintenance and any purchase
cost of heat or energy from biomass from municipal and county levy limits
The way this is shaping up, I think there will only be 68 actual tax-PAYERS remaining in the State. All the rest will be tax-TAKERS.
Buy a tree-farm

This policy recommends enhancement of existing state programs, and increased
education and assistance, to encourage afforestation and reforestation to decrease GHG
emissions through terrestrial carbon sequestration. Enhancement of state programs will provide
additional incentives for landowners
. These changes may require legislative rule changes, fiscal
measures, or manual code adjustments. (P.56)

This policy recommends improvement of animal health through better nutrition. For example, healthier cows stay in the herd longer and fewer replacements are needed, resulting in lower methane emissions. The task force recommends promoting management intensive grazing
at existing grazed animal operations to increase soil fertility, plant vigor and quality, and
providing financial incentives to producers to increase use of animal nutritionists to promote a
high level of livestock health and productivity
Cow-Fart Utilization

This policy recommendation seeks to increase the capture and use of animal methane for
electricity or heat and to reduce current methane emissions
. (WTF??) Several policy options are suggested: (i) establish a cap-and-trade program to increase demand for electricity and biogas from digesters, (ii) establish a voluntary consumer payment program for electricity or biogas produced from manure, (iii) grant a tax credit for production of electricity or biogas from manure, (iv) grant a tax credit for investments in manure digesters or lagoon covers, (v) provide a state subsidy for digester capital costs, interest costs, or to cover risk incurred by private lenders for digester projects, (vi) create a state fund for incentives for utilities to pay a higher rate for electricity or biogas supplied from manure digesters, and (vii) fund research to increase the economic viability of manure digesters and other waste-to-energy systems and efficiently bring waste-to-energy systems to market through farmer-owned cooperatives
(P. 59/60)
Less farts? More poop? Buy cow-manure futures!!
Become an Energy Inspector!! Or Buy Certain Kinds of Stuff!!

They include: (i) cash grants for conducting comprehensive energy audits,
implementing corresponding conservation and efficiency measures, or purchasing replacement or retrofit equipment that is more energy efficient; (ii) refundable tax credits for the purchase of
equipment or other capital expenditures that will result in quantifiable energy savings and
manufacturing transition tax credits to assist companies that redesign production facilities to
produce new, cutting-age technologies with fewer GHG emissions; (iii) low-interest or nointerest
loans for large capital expenditures
intended to reduce energy consumption; (iv) fast
track permitting for retrofit and/or equipment replacement projects that would otherwise proceed on a traditional permitting path, if the equipment will result in energy efficiency or conservation savings; and (v) industrial development bonds targeted to businesses that do any of the following: begin manufacturing energy efficient fixtures, metering equipment or appliances, or begin manufacturing renewable energy products or components; install renewable power generators in their facilities; or begin manufacturing component parts for renewable fuel or hybrid/flex-fuel vehicle operations; or transition from manufacturing traditional vehicles to
manufacturing hybrids, advanced diesel, flex-fuel and other advanced drive train vehicles and
related components
I see a lot of existing Wisconsin businesses in that list--who will now be getting tax-favored treatment, courtesy of ordinary citizens (the 58 who remain actually paying taxes...)
I quit here.
You want more? Read the report yourself. Go ahead. I dare you.


Anonymous said...

How about the long version?

Dad29 said...

Smartass. I know who you are!!

Some think tank will probably come up with a 'long-version' KO of this would take about two weeks if one wishes to provide counters to the assumptions, detailed analysis of the recc's, etc.

Anonymous said...

Well, Pol Pot is well on his way to de-populating the state. This "proposal" will put the economic nail in the coffin if adopted.

Don't forget, it took 16 Months for these hammerheads to come up with this crap.