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The Wisconsin Story
Carol Stemrich
Assistant AdministratorGas and Energy Division
Overview History of energy efficiency in Wisconsin Wisconsin’s unique circumstances Need for decoupling in Wisconsin Decoupling features Barriers to decoupling
History of Energy Efficiency Glory years (utility provision of energy
efficiency services) Annual goals Cooperative effort Brute force Conservation escrow Rate base treatment/performance incentives
History of energy efficiency (cont.) 1999 Wisconsin Act 9
Statewide public benefits programs Administered by DOA Third-party program administrators Established funding level
Customer service conservation activities Voluntary programs Ordered programs
WEPCO WPSC
History of energy efficiency (cont.) 2005 WisconsinAct 141
Increased funding level Utilities contract with program administrators Program types
Statewide Utility-administered Voluntary utility Large customer self-directed
Commission approval of contracts and proposals Quadrennial planning process
Unique circumstances Frequent rate cases Forward-looking test year Full recovery of demand-side investments Reduced utility responsibility for energy
efficiency Wisconsin utilities generally regarded as
excellent investments
Is decoupling needed in Wisconsin? Impact of Wisconsin’s unique circumstances Act 141 implications
Limit on the ability to order programs Mechanism for increasing funding of statewide
programs Energy efficiency package
Decoupling featuresPremise:
The energy efficiency package will result in increased energy efficiency savings through a change in behavior on the part of the utility.
Decoupling features Partial decoupling
Weather normalization Economic normalization
Consistent with markets targeted by the energy efficiency programs
Structured to minimize rate volatility Pilot Third-party evaluation
Package features Include new tariffs and efficiency programs
that are likely to have a substantial impact on sales
Establish aggressive goals Performance incentives that reward
achievement not spending
Barriers to decoupling Role of utilities in providing energy efficiency
services Administrative burdens of economic and weather
normalization Unintended consequences
Inequities between customer classes Rate volatility
Legality Other options
Summary Unique circumstances in Wisconsin need to
be considered when determining whether a decoupling mechanism is needed
Decoupling may be most appropriate under extraordinary circumstances
Need for careful design to prevent unintended consequences
