Wisconsin's historical reliance on coal-generated power has shifted toward renewable energy and natural gas in recent years. Though the state is not yet able to compete with Minnesota on solar or Iowa on its abundant wind resources, the political and economic tides are turning the markets in favor of a more dramatic clean energy buildout, according to advocates in the state.

Democratic Wisconsin Gov. Tony Evers, who took office after the 2018 midterm elections, has been working on a suite of clean energy and climate policies. In August, he signed an executive order putting Wisconsin on a path to 100% clean energy by 2050, and his 2019 budget directed $10 million in Volkswagen settlement funds toward electric vehicle charging stations.

Gov. Evers is also utilizing an opportunity to reshape the state's Public Service Commission. In March, he made his second commissioner appointment on the three-person commission, nominating Tyler Huebner, who served as executive director of renewable energy advocacy group RENEW Wisconsin from 2013 until his appointment this spring. Before RENEW, Huebner worked at the U.S Department of Energy's Office of Energy Efficiency and Renewable Energy, as well as the Wisconsin Division of Energy Services.

Utility Dive spoke recently with Commissioner Huebner and Wisconsin energy stakeholders about their goals for the PSC and Wisconsin's role in the broader clean energy transition.

Though Huebner was not able to delve into specifics on policies such as third-party financing of solar, which he may need to make a ruling on, he was able to share his insights on the energy transition broadly and how he sees himself playing a role in the state's shift toward a carbon-free grid.

Facilitating a "utility-scale changeover"

All of Wisconsin's investor-owned utilities are aiming to reduce their carbon emissions 80% below 2005 levels by 2050, and are on track to reducing emissions 40% by 2026, according to the PSC's latest draft energy assessment.

Going into his new role, Huebner was very focused on what strategies would be needed to decarbonize the energy sector, he told Utility Dive. 

"How is this transition going to happen in a way that's balanced? You've got the utilities, we've got ratepayers, we've got the switch to renewables," he said. "I had a lot of experience in that world coming into this role."

Huebner was assigned to oversee the state's Office of Energy Innovation and Focus on Energy programs, where he will work on improving energy efficiency policies as well as integrating new technologies such as electric vehicle charging infrastructure and other distributed energy resources. And part of the question, he says, as the state faces a rapidly changing power grid is how to continue ensuring utilities are incentivized to be part of this shift.

"One of the things that's top of mind for us is how does energy efficiency and demand response and distributed resources fit into this utility-scale changeover," he said. 

"How do we do energy efficiency or demand response or customer-side renewables in a way that can count towards the utility's actual capacity and energy needs so that they're part of the plan?"

It's a question other states are tackling as well, he said, and one he's looking forward to unpacking. The Rocky Mountain Institute and others have been looking at the idea of clean energy portfolios as replacements for large-scale fossil fuel generation — combinations of renewables along with demand-side resources and energy efficiency. Part of the question for regulators during this time of transition is how such technologies are valued, according to Huebner. 

"How are those treated and analyzed versus a wind farm, a solar farm, a natural gas plant? That's one of the things that I really want to unpack and engage and figure out kind of what's been done and what's our current status? And what are other states doing on these issues?" he said.

There are also technical questions that still exist in terms of what the grid of the future looks like, said Huebner.

Advocates in the state and across the country are debating variations of this question — whether, for example, a cleaner grid requires greater transmission capabilities to send large amounts of renewable energy from more wind or solar-concentrated parts of the country to other parts, or whether greater penetrations of demand response, efficiency and other advanced transmission technologies could make costly and unseemly new transmission infrastructure unnecessary.

"There's an ongoing question about the grid … And that can be at the transmission level or it can be at the distribution level of how does this grid evolve, or does it need to evolve, to enable higher penetrations of renewable resources that are more spread out?" said Huebner. 

There are technical barriers to those questions that the energy world at large is working hard to answer, he said. But at the state level, policies surrounding distributed energy resources need to be established early to ensure no barriers are in place that would prohibit growth, in particular for resources like electric vehicles that really don't have a strong market in the state yet. 

"We're at that point in time where those ... high-level policy building blocks need to be looked at," he said. It's a priority to ensure there are no "artificial barriers" in place "that would prevent that market from growing if it's going to grow that way organically."

Another challenge for the state in moving toward a low-carbon grid is the broader transition away from coal, said Huebner.

Regulating coal's decline

For the first time in 2019, coal-fired power made up less than half the state's energy mix, though it still accounted for 42% of Wisconsin's electricity generation, according to the U.S. Energy Information Administration (EIA). 

"Wisconsin is a real hotbed of renewable energy activity right now," Heather Allen, interim executive director for RENEW Wisconsin and Huebner's former colleague at RENEW told Utility Dive. "And in part, that's because we were slow to start. ... So there's a lot of room for the market to grow in Wisconsin."

Utilities in the state have been a large part of that transition, Bill Skewes, executive director of the Wisconsin Utilities Association told Utility Dive in an email. Along with the companies' carbon reduction goals, Alliant Energy is planning to build out 1,000 MW of solar by 2023. Additional projects from WEC Energy Group and Madison Gas & Electric "will, collectively, make WI one of the largest solar producers east of the Rockies," he wrote.

Major questions remaining for the commission include determining what the proper role for utilities will be as the state moves toward electric vehicles and starts building out infrastructure, as well as ownership and financing for distributed energy resources, Eric Callisto, partner at law firm Michael Best & Friedrich's Madison, Wisconsin office where he chairs the regulatory practice, told Utility Dive.

And there are still barriers to the larger transition, said Skewes. "It remains a significant challenge to balance energy, environment and economic needs as a heavy manufacturing state that until recently, got a majority of its energy from coal," he said. 

And the commission's role in transitioning the sector away from coal fully is not a cut and dry one, said Huebner, but likely is necessary to create an affordable, carbon-free grid.

"There's a recognition that there [are] some big barriers out there" to achieving that goal, said Huebner. "The coal power plant fleets that many of our utilities have ... are now, generally speaking ... no longer the cheapest ways to get energy, or perhaps the cheapest ways to get summer peaking capacity" but there are questions that remain around the most cost-effective way to retire them.

Of the seven coal plants that still operate in the state, five are running without a retirement date. And for any power plant that has a remaining balance sheet, the question remains "how do we incentivize the utilities to turn it off early" while keeping customer bills low, said Huebner. 

Sierra Club in May found that retiring two of Alliant's coal-fired plants and replacing them with low-cost clean energy portfolios of renewables, energy efficiency and demand response would be cheaper than continued operations of those coal-fired facilities.

"When that's the case, that's when we feel the utilities need to make that decision" to retire the plants early, John Romankiewicz, senior analyst and co-author of the report told Utility Dive.

"We feel like we're in a place where that condition is basically going to be true for most, if not all, of the remaining coal plants in Wisconsin, definitely by 2030."

In the past, such arguments "fell on deaf ears" at the PSC, said Romankiewicz. "So we really welcome a new face at the commission." 

Alliant disputed the May analysis, saying it "relies on broad assumptions and information that is not entirely accurate."

But for the commission to realize economic concerns raised by Sierra Club, Union of Concerned Scientists and others, they need to revamp their strategic energy assessment process, said Romankiewicz. Currently, the state is one of few that analyzes its electricity status as a whole without making public individual utility resource planning decisions.

Wisconsin does "this generalized process where there's no understanding or disclosure around what models they're running, what assumptions they're using, and how can you develop a 10-year planning horizon that really looks at each utilities' fleet of resources and the economics there with it," he said.

The Strategic Energy Assessment is a biennial process where the commission takes data from utilities in order to evaluate the reliability of the state's current and future electric supply.

"The Commission is interested in receiving stakeholder comments on this Strategic Energy Assessment. We are open to discussions about increasing transparency in utility planning decisions," a commission spokesperson told Utility Dive in an email after the interview with Commissioner Huebner. The commission this year added two other stipulations to its process: utilities are now required to include information on their facility retirement plans and carbon reduction efforts in their long-term resource plans.

The state is unlikely to adopt the integrated resource process that's more typical in other states, Callisto said. "That debate has been around for a while," he said. "I don't think we're going to get to a spot where there's a broader IRP process."

Ultimately, leftover coal balance sheets are "the elephant in the room" in Wisconsin, which is still "fairly dependent" on the fuel, Callisto said. 

Coal-fired facilities "aren't being dispatched as much as they were meant to be dispatched," but a balanced approach to plant retirements has to ensure it will be cheaper for customers to potentially pay off the rest of that plant than it would be for the plant to continue operating, he said.

Under the commission's current model, a strategy such as securitization is one potential avenue that could benefit ratepayers, utilities and clean energy interests, Huebner said.

Utilities in the state have "all set targets for reducing carbon. That's public, and that's well known in Wisconsin," he said. "So the question is, how are they going to do that? And the commission will make decisions that look out for all the different interests as we try to tackle decarbonization."