INTERVEIW WITH RENEW POLICY DIRECTOR MICHAEL VICKERMAN FOR A PIECE TO BE PUBLISHED ON URBAN MILWAUKEE.COM 9/15/14

Thank you for taking the time to speak with me. I am an undergraduate in UWM’s English department studying writing and rhetoric and am very interested in activism and how rhetorical analysis, public discourse and writing can effect change. As a writer and member of the community, as a person interested in activism and how to enact ethical change, my aim with the article is to enumerate enaction of policy, and promote consumer empowerment.

-        I saw on your August 28^th testimony you developed and negotiated renewable energy policy recommendations that were signed into law. What was successful about that proposal?

I think you’re referring to the renewable energy standards which is now has been law in this state for eight years. How did that happen? It started out really as a policy goal enunciated by the governor at the time jim doyle and he convened a task force composed of a very broad cross section of the electricity world. All the stakeholders who had to be there were there and so we worked through a variety of technical issues to reach the goal of the governor called for. His goal was %10 renewable energy by 2015. At the time it seemed like an ambitious goal, it turns out it really wasn’t but we didn’t really know that at the time and no other state had enunciated such an ambitious target, at least in this region. Wisconsin was the first state to move forcefully, decisively in this area and we worked out the actual policy mechanisms to achieve that %10 renewable goal on utility sales.  I would describe the effort as inclusive and consensus base to a great degree.

-       Are there any parallels to the We Energies issue?

Some of them yes, there are really two big issues with the We Energies rate filing. The first is what we call Rate Design which is the weighting of the fixed charge to the energy charge. We Energies is proposing to increase dramatically the fixed charge (for being a customer) from $9 to $16 a month. We Energies is not alone among investor owned utilities in seeing a dramatic increase…Madison gas & Electric is asking for the same for the same and Wisconsin Public Service is asking for an even bigger jump. So that is an issue that all three utilities have in common.

-        So just to clarify those three are the three energy “bodies” that provide energy to the state?

They have their own territories, so Madison gas and electric serves madison and a couple of dane county communities. We energies is the electric provider for southeast Wisconsin from Illinois border to Appleton and up to upper Michigan. the third entity is Wisconsin public service. That utility serves green bay, the Wisconsin river area and parts of the fox valley and the lake Michigan shore…so they cover about more than half the state but they don’t serve Eau Claire lacrosse or Janesville or Beloit…other utilities serve those areas…but still that is basically close to 3/5ths of the state that would be affected by these proposals…just for the privilege of being an electricity customer your bills start out being nearly double. The other thing that they’re doing is they’re lowering the energy rate. Which sounds like a good deal and could mean lower bills if you are a high energy using customer. Then the incremental savings from the energy rate is more than enough to compensate for the higher fixed charge. But if you are a low energy user and try to be fairly frugal with how the electricity is consumed you end up paying higher monthly bills. This is unusual in a rate case. All three utilities are asking for more revenue but the way their going about it would reward certain customers or result in savings for certain customers and result in higher bills for other customers so there is a question of fairness.

-       And it’s important in Milwaukee especially because every year we have power down week it’s something that the community is dedicated to focusing on….and so it is something I definitely am a part of also.

You asked about what We Energies is proposing and there are 2 major facets to the proposal....the second is effectively their tax on clean energy. And that includes clean energy that people already have invested in and put on their house our business. That is the biggest threat in We Energies’ current rate filing.

-       Because of the consumer…

Well because alright, put yourself in the position of a customer that just bought in 2013 just put up a solar electric system in the house… and you’re expecting to save approximately 700$ from the system…you paid a lot for this, close to 10,000$. Well, under the proposal from We Energies….We Energies would essentially capture back 300$ in your savings.

-       Can you talk a bit about what the Public Service Commission is and does?

Yes, the Public Service Commission is the governmental body that regulates utility service in Wisconsin. The reason why these utilities are regulated is because they have a monopoly on their within their territory…they are the only legal seller of electricity in that territory. That gives them a lot of power and so the Public Service Commission was created to review the reasonableness of utility service…are they charging fair rates, the rates are supposedly based on the cost of serving these customers…

-       but it’s a monopoly

the monopoly…the theory behind this is that it is actually more economically efficient to just have one provider instead of four or five with their own sets of poles and wires and power plants…and they also are privately owned companies….they’re entitled to a profit from their investments but that profit is regulated by the utility commission they will tell the utility “your share holders can 10% from your investments this year, not 12, not 13 but 10.

-       Okay, so the system as it is set up is for…is structured around entities or territories that work as opposed to individual generators of renewable energy.

Correct

-       so that is what we are working within

The utility provides a regulated service. The individual generators sell electricity to themselves and to the utility

- yeah that is another interesting issue I wanted to talk a bit about

-       Would you say there is a conflict of interest happening with We Energies’ proposal because they are a monopoly…..how is an issue like this addressed by the Public Service Commission, in your experience? 

Okay so to your first question I would say no there is no inherent reason why a monopoly has to behave the way We Energies is behaving. Not all utilities are searching for ways to tax their customer generators…so no that is not a conflict. I would attribute it to short-sighted, kind of control-freak management culture…they want to generate all the electricity that customers use they don’t want to share the grid with anybody else and that includes their own customers. Having said that, not all utilities are so jealously possessive of their infrastructure as We Energies is….so you can go to western Wisconsin that is served by different utility Excel Energy and you are just not seeing the same proposals and that rate case is going to be deliberated very quietly without controversy, because the utilities decided the current structure is fine it can still earn a profit and so they’re asking for slightly higher revenues and everybody will pay a little bit more starting next year instead of picking winners and losers based on their energy usage……and penalizing low-use customers and solar system owners.

-       So all these things would you say are happening within a rising economic climate…like a changing economic….a point in time where rates are generally increasing and so utilities are reacting in different ways?

The current climate in which utilities operate it does present challenges and the utilities are responding differently based on the values of their management. Some utilities are doubling down on sort of their monopoly status and their asking for higher fixed charges these charges don’t vary in any direction based on customer usage. So there is less risk involved with this kind of pricing structure but not all utilities are following that path.  That is why I think in the end what matters more is utility management values than the monopoly structure.

-       I would like to address the issue regarding lack of legal definition of ownership:

it seems that there is a degree of understanding what is needed legally through a lack of specification in policy and precedent is used in guiding public awareness.

I am referring to RENEW’s website under “we energies rate case”  that discusses Wisconsin’s interconnection rule lacking specification on the question of ownership. Is a lack a problem because there is no law that specifies and protects ownership?

The absence of clear language creates an uncertainty that inhibits investments. If you are an investor you don’t know whether you can sell energy or provide energy to a customer from a system behind that customers meter. That you are at some risk of being subjected to legal challenge or being regulated as public utility than you the investor is going to put your money elsewhere….this is not a secure investment climate…in those states where the language has been developed through recent law there is no uncertainty, so a company can go in work with a school a local government and say, we’ll own the solar system we’ll sell you or provide you the energy you don’t have to manage the system you just pay us for the service we provide.

-       Like Sunvest?

Exactly. Well, Sunvest uses a leasing model but yeah, it’s basically the same thing.

-        So when you say investors you mean third parties like Sunvest.

I mean sources of outside capital. It’s not the customer’s capital that results in the system being placed on the roof or the property it’s somebody else’s capital.

-        In your opinion would you say that clarification of language would assist investors in feeling confident about creating renewable energy markets or strengthening markets?

Investing in renewable energy markets, the production….providing renewable energy products and services, yes.

-        Would you say that we energies is using this lack of clear language as an  opportunity to stop the independent implementation of solar energy?

To squash competition. They consider generation that other people own, and that includes their own customers, but also they are afraid of third parties coming and making it easier for their customers to host the system and use less of We Energies electricity.  What they’re doing is saying, well, we don’t care what the state of the law is we are just going to adopt this policy in this rate case saying you have to own (inaudible)….so our comeback to that is state law is not clear on that subject therefore we consider your policy to be arbitrary and punitive.

-       Okay, I am going to jump to my next question, it is a 2 part question:

The process of buyback with solar power and the grid is very interesting. I am wondering if this buyback process exists because independent solar usage automatically contributes to the power grid based on the nature of electrical conductivity?

What you call buyback policy is really called net metering and that flows from a federal law past several decades ago that require utilities to accept power that’s contributed to their grid from independent sources. The buyback policy can be tailored to either encourage customer self-generation or discourage and lately the direction has been to discourage customer generation.

This aspect of the business caught my attention because there is a recognition of the value of solar energy generation.

There is a recognition in certain jurisdictions. Wisconsin is not one of those jurisdictions. There is no special regulation in support of solar in the state of Wisconsin.

-       …I guess you could say that this is a public policy forum. Because there is not something specified in that ….is that a place where, for example, RENEW comes in to create policy?

Yes. There is clearly a lack that is detrimental to the states economy and the environment and so we would like to promote the idea and the commitment among decision makers to create policies to advance solar, specifically. Solar is rapidly becoming the default source of electrical generation in this country. But not all states not all utilities have gotten that memo. So, for example, across the Mississippi River in Minnesota there is a policy framework in place to promote utility ownership of solar, customer generation of solar and community solar projects, at least, as applied to the largest utility in the state. So they’re gonna move forward. They’re gonna see a rapid expansion of solar and it’s gonna come at a relatively low cost. We don’t have that in Wisconsin. That leaves the solar market basically composed of individual customers, businesses and households that want to have a solar system to supply them with some part of their energy. So it is much more fragmented here and without some kind of policy goal our customers and utilities are going to be in conflict with each other.

-       on your website is a conversation about Iowa Supreme Court and clarification of “ownership”

essentially that is the third party issued being settled in Iowa. The state supreme court said, no we don’t consider generation, as built for one customer, to be a utility service. This was a split vote in the supreme court but the majority found that….so it doesn’t matter who owns the system because it is not considered a sale of electricity, or I should say it is not considered offering utility service to the public, that is what defines “utility.” The product has to be made generally to everyone. If you are a solar installer there are certain things you would want from a customer to go forward. One of them is having a house that could actually accommodate a solar system. Actually most properties can’t, it could be a big tree, it could be a roof facing the wrong direction, it could be the fact that the customer doesn’t own the property. Behind the meter generation is sort of on it’s face, not a utility service it can’t be. So that issue was settled in Iowa without having to pass a law. Which is somewhat unusual. Somebody actually paid attorneys to take this matter all the way through the state judicial system finally resulting, almost three years later, with a decision he was looking for.

-       Where can folks go to find out more about solar home energy installation and also what actions are being taken by RENEW, or in general in the public over the next month regarding this policy change.

The very best source for Milwaukee residents and even outside the county is Milwaukee Shines. That is a city of Milwaukee solar initiative that’s organized a number of group projects in City of Milwaukee-specific neighborhoods and they’re also tracking the development of this rate case. The City of Milwaukee is an intervener. They see the We Energies filing in direct conflict with their own sustainability goals. The other is RENEW. Our website basically has as much good information as you can find. We try to keep track of all the media stories. It is a little difficult to keep track through the public service commission but anyone who wishes to post a comment on the We Energies filing they have less than 2 weeks to do so now. The technical hearing is coming up on the 24^th of September.

-       Will that help with the public hearing?

Well, the public hearing actually, the technical hearing that we will be involved in is set for the 24^th of September is here in Madison, but there is a public hearing happening in the City of Milwaukee on October 8^th. 

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