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While the utility serving Madison, Wisconsin has recently made a public commitment to expand renewable power and cut emissions, clean-energy advocates say they still have unanswered questions.
The Framework 2030 plan that Madison Gas & Electric (MGE) released last month says the company will get 30 percent of its energy from renewable sources and reduce carbon dioxide emissions by 40 percent (from 2005 levels) by 2030. It also vows to modernize the grid, and promises not to seek a fixed rate increase in its next rate case in spring 2016 – a departure from a broader trend in the state.
The news was welcomed by clean energy and consumer groups, who attributed the fixed rate promise to widespread opposition to such increases that utilities have sought and had approved in the past two years.
“MGE has a history of listening to our customers’ concerns and responding to their needs and their priorities, and that’s reflected in Energy 2030,” said MGE spokesperson Dana Brueck.
MGE held scores of small community meetings to collect input for the Framework plan, officials said, building on a practice the utility started a decade ago to inform its 2015 energy plan.
But some customers and clean energy leaders say they want a clearer and firmer commitment from MGE that it is turning away from reliance on fixed charge increases and that it can be sure that the renewable energy goal is achieved.
They note that MGE did not make any promises about fixed rate cases after spring 2016. And with heavy reliance on coal-fired power, they wonder how MGE can meet the 30 percent renewables commitment in a meaningful way. Some are also skeptical of the extent to which MGE plans to incorporate community feedback going forward.
“As far as this being a victory, I think it is,” said RePower Madison coordinator Mitch Brey about the Framework 2030. “It’s a huge improvement from where MGE was a year and a half ago. But it’s still a work in progress.”
“MGE’s Energy 2030 framework is a welcome change in direction and we hope MGE follows through with strong actions,” added Andy Olsen, Madison-based senior policy advocate for the Environmental Law & Policy Center (ELPC), in a statement. “We offer to work closely with MGE to ensure that when implemented this plan protects the environment and customers, and that it cuts pollution while keeping costs low and expanding access to 21st century energy solutions.”
Fuming about fixed charges
Julie Foertsch, a cognitive scientist at the University of Wisconsin, attended one of the community meetings that MGE hosted to gather input. She said that the fixed charge increase MGE implemented this year was condemned by participants.
“It seemed like there was consensus on the new rate structure being unfair,” she said, referring to MGE’s fixed charge of $19 a month, an 82 percent increase from the previous charge. “People on fixed incomes spoke personally about how it had not only upped their bill in a way they can’t control, but the inherent unfairness of how that’s balanced with the energy rate going lower so that people who use more energy see their bills going down while people who use less energy see their bills going up.
“People were hoping to see that fixed charge [increase] being rescinded,” she continued.
Foertsch said she and other meeting participants wondered how exactly their input influenced MGE’s Framework, and wished that MGE had addressed the fixed charge issue beyond promising not to seek an increase in the spring.
“Rate cases happen every year. Just because they aren’t requesting one in 2016 doesn’t mean they won’t later,” Foertsch said. “There’s no commitment to energy rates that clearly encourage conservation.”
When asked whether MGE would seek increased fixed charges down the road, Brueck said:
“In the future, we anticipate researching and testing innovative pricing and rate options. As we do, we will consider and balance how to encourage energy efficiency and conservation; how to discourage use during times of electric system peak to save long-term costs for all customers; and, how to equitably cover the costs of the critical assets used to serve customers, including the costs to maintain and improve the energy grid for everyone who uses it.”
Foertsch, who leads focus groups and surveys as part of her own job, said MGE’s community input process was not structured in a way that inspired confidence.
“Although you could say whatever you wanted, when you read the materials that MGE gave you ahead of time, it seemed they were trying to make a case in a certain direction,” she said. “People weren’t sure that what they were saying was going to have much impact or be fairly tabulated or understood.”
She and others noted that MGE’s lengthy framework was released just days after the last meetings were concluded, and that the results of the meetings have not been made available to participants or other ratepayers. She figures the community meetings were used to help justify “what they were already thinking they were going to do. I don’t think they’ve really changed their direction all that much.”
The community meetings were carried out by a Washington D.C.-based group called Justice & Sustainability Associates (JSA), contracted by MGE. Brey pointed to a “process diagram” developed by JSA, which calls for a “long-term collaborative Community Energy Partnership to serve as a forum for multiple stakeholders to work with MGE on continued planning and implementation issues.”
The diagram says the partnership would be launched in fall 2015 with a “town meeting.” Brey said he was told the town meeting was delayed until February, and he wonders whether MGE really plans ongoing community dialogue that influences its policy.
MGE did not respond to questions about the energy partnership or whether a town meeting would be scheduled. Brueck said the timeline for the small group meetings was extended to accommodate everyone who wanted to participate.
“The conversations represent one part of a much larger engagement effort that also involved an extensive customer survey, industry research, collaborative partnerships and numerous stakeholder discussions, resulting in what we consider an unprecedented level of engagement for a small investor-owned public utility such as MGE,” Brueck said.
Ann Harrell, JSA chief operating officer, said that an executive summary of feedback from the meetings would be released in December or January, and that the specific notes would be confidential.
She said that dates for a “workshop,” the event previously referred to as a town hall, will be released shortly. She said the Community Energy Partnership is considered phase four of the strategy, and the group is currently focusing on phase three.
“The community’s input during phase three will be considered as MGE builds out the framework into a plan,” Harrell said. “We believe that, overall, the community will be pleased to learn that their participation in this civic engagement process made a positive difference. We look forward to their continued participation.”
RENEW Wisconsin executive director Tyler Huebner stressed that continuing community involvement is essential.
“We agree that ongoing collaboration will be needed to identify the best ways to meet the goals of this new framework,” he said, in a statement. “Ensuring customer opportunities to invest in renewable energy and energy efficiency, and incorporating equity, fairness, and control over customer bills, should continue to be part of the conversation and collaboration going forward.”
Coal concerns and solar hopes
MGE also buys 35 percent of its energy from other companies, representing a mix of generation sources.
An analysis of public documents by RePower Madison found that including power purchases, MGE gets about 70 percent of its energy from coal, including commitments to run the Oak Creek plant through 2050 and the Columbia Energy Center through 2038. The Oak Creek plant recently underwent a major expansion, and the Columbia Energy Center, a plant previously dubbed the state’s dirtiest, had a $600 million pollution control upgrade.
“There’s been so much money put into these plants in the past 10 years that MGE basically needs to run them,” said Brey. “The first thing that MGE needs to do is be open and honest about the problem so that we can address it.”
It is not clear whether MGE could get 30 percent of its energy from renewable sources and still continue its current reliance on coal, but given that natural gas-fired power is typically also a significant part of a state’s mix, the margins would appear to be tight.
Brueck declined to specify what the company’s energy mix would look like by 2030.
“We’ll determine our supply mix and how to accomplish our objectives over time as Energy 2030 is a long-term framework,” Brueck said.
Clean energy advocates are hopeful that the renewable goals and the détente on fixed charges meanwhile will clear a path to more distributed solar generation. Despite his cynicism on other fronts, Brey is hopeful about the prospects for solar in MGE territory.
“We think this framework will promote solar,” said Brey. “Not only do they have a framework that they didn’t have before, but they have a goal to improve the grid. We see this as a statement from MGE that they want to be solar innovators, they want to be the utility of the future.”