Question of utility profits is contentious

WISCONSIN - The thorny issue of whether monopoly power companies should profit from energy efficiency nearly prevented unanimous support for a series of recommendations adopted by the state's global warming task force.

Papermakers objected to changing the way utilities earn their profit to reward energy efficiency. Energy-intensive industries such as NewPage Corp. that are already investing in energy efficiency want to see lower energy costs, not higher rates, paper council President Jeff Landin said.

At issue is a plan that state regulators will develop to allow utilities to continue to profit even as revenue falls, as the state implements aggressive moves to boost the energy efficiency of Wisconsin businesses and homes.

"This industry will do what we can to be environmentally conscious, but we can't do it without seeing savings," Landin said.

After wording in the interim report was changed in a few places, paper company representative Tom Scharff of NewPage agreed to support it and the report was adopted unanimously. The report calls for Wisconsin to explore building wind turbines in the Great Lakes and proposes a dramatic boost in energy efficiency to reverse the state's growing appetite for energy.

Tia Nelson, task force co-chair, called the vote "a very major step forward," given that the task force included representatives of industry, electric utilities and environmental groups. The task force will hold a four-city public comment session, conducted by teleconference, from 4 to 7 p.m. March 19 in Milwaukee, Madison, Green Bay and La Crosse.

Through energy efficiency, "we ought to do as much as we can because that will keep our businesses competitive, help reduce customers' bills and avoid building very expensive new power plants over the long term," task force co-chairman and utility president Roy Thilly said.

Thilly and Dan Ebert, chairman of the state Public Service Commission, said the renewable energy opportunity for Wisconsin provided by the Great Lakes could be a competitive advantage for the state. "It's incumbent on every state to maximize its competitive position," Ebert said.

"For the state of Wisconsin, that's in bioenergy, certainly because of our strong agriculture and paper industries. Another competitive advantage that we may very well have is wind from the lakes."

Industrial representatives are concerned what a big infusion of funding for energy efficiency will mean for energy costs in Wisconsin at a time when paper industry states in the Southeast aren't moving to respond to global warming. Papermakers are closing mills and don't need more restrictions on their ability to compete, Landin said.

The Public Service Commission will look for the most cost-effective energy efficiency projects, Ebert said, but providing more funds to cut energy use will be less costly for customers than building a new nuclear plant or coal-fired power plant.