We Energies Embraces Solar Power
State moving away from coal -- but still has a long ways to go.
Coal pile, with the Bay View turbine in the background. Photo by Dave Reid.
For decades, We Energies has been a coal colossus. As recently as 2005, about 70 percent of its power came from burning coal and even today 51 percent of its power is coal generated, the company estimates. That meant more pollution for this metro area, which for many years fell hardest on minority residents, one study found.
That situation improved after the company’s Menomonee Valley plant switched to natural gas, but coal was still in heavy use and polluting the state. The company’s plant in Pleasant Prairie uses “an average of 13,000 tons of coal a day, shipped in train cars from Wyoming’s Powder River Basin,” to supply the electric needs of up to one million homes, as Lee Bergquist of the Journal Sentinel has reported.
Because of the leadership of companies like We Energies, just nine states in America were more dependent on coal than Wisconsin, and those tend to be states like West Virginia, Kentucky, Wyoming and North Dakota — big producers of coal. Wisconsin was spending more than $12 billion annually to import coal and gas, importing pollution to this state and exporting potential jobs to coal and gas producers while failing to grow alternative energy jobs here.
So it was big news indeed when We Energies announced last week that it would shut down its coal-fired plant in Pleasant Prairie while essentially replacing the lost power with new solar farms. The company said it plans to own and develop 350 megawatts of solar power by 2020.
That will help to transform a state that has been “an island of renewable-energy stagnation amid a sea of growth,” as Gary Radloff, a policy analyst for the Wisconsin Energy Institute, told Bloomberg.com in 2015. Wisconsin has until recently ranked dead last among Midwestern states in wind power and second last in solar power.
“We’re still behind our neighbors,” says Huebner. “Everybody else has been moving very quickly.”
But he sees a lot of good things happening in Wisconsin in the last two years:
–Alliant Energy, based in Madison, got approval in 2016 to build 500 megawatts of wind farms in Iowa (a very windy state) to supply energy for its customers.
-In February 2016, Dairyland Power Cooperative, based in La Crosse, announced it would add 20 megawatts of solar across 15 sites, most of them in Wisconsin.
-In June 2016 Dairyland announced it would work with EDP Renewables to build the 98-megawatt Quilt Block Wind Farm in Lafayette County near Platteville. Construction of the wind farm, which will supply enough clean electricity to power more than 25,000 households, was completed last month
-In January, 2017, WPPI Energy, a power company based in Sun Prairie serving 51 locally owned electric utilities, announced plans to build a 100- megawatt solar energy center – then Wisconsin’s largest but now supplanted by We Energies – with a capacity to serve more than 23,000 people near the Point Beach nuclear power plant in Two Rivers.
-In February, Madison Gas and Electric announced a proposal to construct, own, and operate a 66-megawatt wind farm that would cost $107 million and consist of 33 turbines, about 200 miles west of Madison in Howard County, Iowa.
In August, WPPI Energy announced it would buy the power from a 132-megawatt wind farm in Illinois, thereby doubling the amount of wind energy in the company’s power supply portfolio.
-Alliant Energy now plans to build another 200 megawatts of wind energy in Wisconsin.
It’s worth noting that We Energies had built what are still the two biggest wind farms currently operating in Wisconsin: the 88-turbine, 145-megawatt Blue Sky Green Field Wind Energy Center in northeast Fond du Lac County in 2008, and the 90-turbine, 162-megawatt Glacier Hills Wind Park in Columbia County in central Wisconsin in 2011.
But the recent spate of renewable projects announced has made Walker an irrelevant bystander to market forces. “The economy is the big driver,” says Huebner. “The price of solar is down 80 percent in the last 10 years. Wind is down 66 percent in the last seven years.”
WPPI projects that 20 percent of all its power will come from wind by 2018. Madison Gas & Electric has pledged to supply 30 percent of its electric power with renewable resources by 2030. We Energies offers a less robust promise, to hit 33 percent of its power coming from non-emitting sources, including renewable energy and nuclear power, by 2030.
Still, that projection also includes its coal use declining to 33 percent of all power generated, a huge reduction from the days when 70 percent of power came from coal. Progress is happening, despite the lack of encouragement from state leaders.
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Thanks for pointing out this significant shift toward solar, but it helps to remember that We Energies’ doubled-down on coal with the 2010 opening of the Oak Creek plant, which equals Pleasant Prairie in coal-generated output. Although fuel economics were just starting to swing heavily toward cheaper natural gas (thanks, fracking) and then renewables, We Energies was nevertheless rewarded for its poor timing with a set of major rate hikes before the plant opened, and an egregious 12.7 percent guaranteed return on its $2 billion plant investment for 30 years (thanks, feckless PSC). If the economics of coal generation continue to deteriorate through 2040, and coal looks even more like the dinosaur it’s become today, We Energies shareholders look to be completely protected from the consequences of this massive poor decision, just as Gale Klappa was handsomely rewarded with some of the biggest executive bonuses in state history.
From Sourcewatch:
In Feb. 2011, it was reported that investment in the Oak Creek power plant provided the lion’s share of Wisconsin Energy’s earnings boost in 2010, and the power plant will be the biggest reason profit will increase in 2011. The utility holding company announced record profit on Feb. 1, 2011, and reaffirmed its forecast for higher earnings in 2011 during a conference call with investment analysts. Profit from continuing operations increased 20% to $3.84 a share: “Roughly 80% of the increase in our earnings for 2010 was the result of the investment we’ve made in the first generating unit at Oak Creek,” Wisconsin Energy Chairman and Chief Executive Officer Gale Klappa said. In 2011, with nearly a full year of profit from the second Oak Creek unit, operating earnings are projected to rise by 7% to 9%, to $4.10 to $4.20 a share.[14]
The parent company We Energies raised prices for electricity customers in a series of rate increases while the power plants were under construction, including a big price hike in 2008 that was phased in over time. The 5% increase means the typical We Energies residential customer is now paying more than $104 a month for electricity. A typical bill was almost 40% higher last month than it was six years ago, the first year of construction of the power plant project. Customers could see another increase in the coming month or so, as the state Public Service Commission is expected to rule on a 1% hike linked to higher fuel costs for the utility’s power plants.[14]
https://www.sourcewatch.org/index.php/Oak_Creek_power_station#cite_note-tc-14
Urbanisto covered the rate-hike/PSC angle I would’ve commented on, so I’m left only with this:
Some of us had that figured out before the election…why’d we waste so much time proving it?
Urbanisto, your points are well taken and I’ve previously criticized the company for this in this story: https://urbanmilwaukee.com/2017/03/21/murphys-law-the-remarkable-clout-of-we-energies/ and this one: https://urbanmilwaukee.com/2012/07/31/murphys-law-monopoly-greed/
But the fact that a company like this that wasn’t much of a leader — both as to pricing and investing in renewable energy — makes its current embrace all the more noteworthy, suggesting how strongly the economics are pushing everyone to get aboard the renewables movement.
I suppose this is good news, but scattered, rooftop solar is far more efficient. Rooftop solar produces power right where it is needed, as opposed to in distant locations that inevitably waste large fractions of the power in transmission to cities and towns. We Energies is only interested in solar power if they can produce it themselves and sell it to us expensively. They have no interest in people producing solar power on their own rooftops, thereby buying less from We Energies and moving toward going off the grid. To discourage people from producing their own solar electricity, We Energies has gutted the buyback rate they pay producers and added “generation facilities” fees. These are clear disincentives.
Were this a typical business, who could blame them for protecting their financial interests? But this is a quasi-public utility, and essentially a regional monopoly. Consumers have nowhere else to turn. The Public Service Commission is supposed to regulate utilities like We Energies and make sure they are acting in the public interest. Alas, the commissioners are appointees, and are hardly independent from politics. Ultimately, all of these big utilities are shaking in their boots, as Tesla and others work to free us from monopolistic utilities. It won’t be long before we can cut the cord, produce our own electricity, and store the power in batteries in our homes and commercial buildings.
We Energies and Gale Klappa have been well compensated for decisions they made that cost over $4 Billion during the past 12 years of investing in a new Elm Road Plant, Port Washington Plant, millions in upgrades to the older Oak Creek and Pleasant Prairie Power Plant and conversion of Valley Power Plant to natural gas. The consumer pays for all of this in rates, for the good and poor decisions made and approved by the Public Service Commission.
We Energies and other utilities have the real monopoly control on supply and price. The only real competition for utilities and energy companies is consumer owned comprehensive, integrated, energy efficiency technology, solar electric panels, thermal mass storage with heat, hot water, ice making AC, and electric cars during off peak periods at lower electric rates. This approach would reduce Wisconsin importation of over $7 Billion annually in fossil fuels, in essence a huge savings for consumers every year, and stimulating local economies with labor jobs in renovation work. This is the approach utilities really fear since it cuts into their control of supply, price, and profit. No CEO is rewarded for downsizing the business monopoly model.
This is the only reason some utilities are rushing to build large renewable systems, to maintain a portion of their monopoly control, and get the consumer to pay for it. Wisconsin could have taken this approach during 2008 as suggested in a report by the nonprofit Energy Center of Wisconsin to triple Focus on Energy funding, and build state capacity to at least 25% renewable sources.
David, you’re probably correct except utilities like WE Energies will move from generators of electricity to distributors as they either buy electricity from individuals or rent their roof space for the solar generators.. Someone will be needed to move that power to industrial plants and business and apartment/condo buildings which can’t produce enough themselves. In addition, someone will be needed to do maintenance on the batteries which probably won’t be in individual homes but in aggregates in the boulevards and on the corners as telephone and cable provider “boxes” are now. And the batteries will be miniatures in comparison to current ones. Just down the pike is coming something called a capacitor which is a battery on steroids and can charge and discharge is sio must faster and stronger than any current battery. AND if Walker and his cronies don’t destroy it and its research and development capacity, the UW system should be leading the “charge”! The tragedy is WE Energies lack of vision up to now. We are paying in so many ways for the blinders they’ve been wearing.
Revtlee – you miss my point. Utilities want large battery systems and solar plants to control supply and premium prices, and we pay for it. The Distribution and GRID are already constructed over decades of upgrades – we pay for this in rates as well. A well run utility is a good thing, but after over 100 years of monopoly control over energy, it is time for consumers to balance out the equation and obtain real savings for themselves. CEOs like Klappa despise consumer owned solar electric and energy efficiency since it cuts into their control over the consumer and selling them more power. For example, replacing 1-incandescent 100 watt lamp with 1-LED 15 watt lamp will save a consumer $1.70/mo or $20/year. Change out 5-lamps in 2 million homes, and thousands of lamps in commercial buildings cuts energy consumption by hundreds of millions annually. Klappa type CEOs hate this, and many consumers remain uneducated on the comprehensive integrated benefits.
Consumers need to own their own storage in simple storage that is nearly 100% efficient at releasing the energy back when needed in the form of thermal mass furnaces, heat pump hot water heaters, electric cars, and ice making AC that charges at night time rates of 5 cents per kwh instead of peak rates of 22 cent per kwh.
Consumers need to own the energy efficiency projects and solar electric improvement on their buildings, or buy into solar electric community projects. This is how consumers can save $7 Billion annually in Wisconsin and $Billions nation wide. This would create thousands of labor jobs in Wisconsin that renovate buildings with integrated design and comprehensive reconstruction of thousands of structures.
This approach could be stimulated with a tripling of Focus on Energy funds as recommended by the Energy Center in 2008, a carbon tax that would be used for tax credits and transit efficiency improvements, and a sales tax exemption on local labor and materials. Urban areas could provide renovation incentives from Water Departments for lead lateral replacements, and MMSD for incentives on stormwater runoff improvements.