Renewable Portfolio Standard

November 07, 2023

Summary

In October 1999, Wisconsin enacted Act 9, becoming the first state to enact a renewable portfolio standard (RPS) without having restructured its electric utility industry. The RPS sets a total goal of 10% of all electric energy consumed in the state coming from renewable energy sources, with different percentage requirements for each electric provider (investor-owned utilities, municipal utilities, and electric cooperatives) in the state. 

Eligible Technologies

Qualifying electricity generating resources include tidal and wave action, fuel cells using renewable fuels, solar thermal electric, solar photovoltaics (PV), wind power, geothermal, hydropower, biomass, biogas, and landfill gas. 

The RPS was amended in May 2010 to allow certain resources that produce a measurable and verifiable displacement of conventional electricity resources to also qualify as eligible resources, subsequently defined as including solar water heaters; solar light pipes; ground source heat pumps; and installations that generate thermal output from biomass, biogas, synthetic gas, densified fuel pellets, or fuel produced by pyrolysis.

Electricity generated by hydropower receives special treatment. For small hydropower less than 60 MW, utilities receive credit for the sum of:

• All hydropower purchased in a reporting year;
• The average of the amounts of hydropower generated by facilities owned or operated by the utility in the baseline renewable percentage (BRP), adjusted to reflect the permanent removal from service of any of those facilities and adjusted to reflect any capacity increases from improvements made after January 1, 2004; and
• The amount of hydropower generated in the reporting year by facilities owned or operated by the electric provider that are initially placed in service on or after January 1, 2004.

Beginning December 31, 2015, electricity from large hydropower facilities (60 MW or greater) can be counted toward the RPS requirement if the facility was placed in service on or after December 31, 2010 (see S.B. 81 from 2011). Facilities in Manitoba, Canada are also eligible if certain requirements are met. In August 2017, S.B. 144 was enacted, providing that heat that is a byproduct of a manufacturing process is considered a renewable resource for the purpose of the renewable portfolio standards law.

Requirements

Legislation enacted in March 2006 strengthened the renewable energy requirements and established an overall statewide renewable energy goal of 10% by December 31, 2015. 

• For the years 2006 to 2009, each electric provider may not decrease its renewable energy percentage below the electric provider's baseline renewable percentage (BRP), defined as the electric provider’s average renewable energy percentage for 2001, 2002, and 2003.
• For the year 2010, each electric provider must increase its renewable energy percentage by at least two percentage points above its BRP.
• For the years 2011 to 2014, each electric provider may not decrease its renewable-energy percentage below its renewable energy percentage for 2010.
• For the year 2015, each electric provider must increase its renewable energy percentage by at least six percentage points above its BRP.
• For each year after 2015, each electric provider may not decrease its renewable energy percentage below its renewable energy percentage for 2015.

A list of specific RPS percentage requirements by Wisconsin electric provider can be found here.

In April 2014, A.B. 594 was enacted, creating an exception for electric providers whose BRP exceeded 12% and whose renewable energy percentage exceeds 14% in 2014. Electric providers who qualify must maintain a renewable energy percentage for the years 2015 and thereafter of only two percentage points above its BRP.

Carve-outs

Renewable energy generated outside of Wisconsin is eligible for RPS compliance, but the electricity must be used to meet a provider's retail load obligation in Wisconsin (i.e., the electricity must be delivered to Wisconsin customers).

Compliance

Each electric provider must annually retire renewable energy certificates (RECs) or renewable resource credits (RRCs) in the renewable energy tracking system to demonstrate compliance with its minimum percentage RPS requirement. Electricity providers may create and sell or transfer both RECs and RRCs.

• A REC is defined as a certificate representing one megawatt-hour (MWh) of total renewable energy that is both physically metered with the net generation measured at a certified renewable facility's bus bar and delivered to a retail customer with the retail sale measured at the customer's meter. Transmission and distribution losses between the bus bar and the customer's meter are ignored.
• An RRC is defined as either (1) a REC that exceed a utility's minimum requirements or (2) a certificate representing one MWh of displaced conventional electricity.

An RRC generated after January 1, 2004, may be used for compliance up to 4 years after the year in which it was created; however, RECs that are not RRCs may only be used for compliance in the year that the REC was created. Existing installations that qualify as renewable energy resources are eligible to be counted towards a utility's compliance, but only generation capacity (including incremental additions at existing installations) added after January 1, 2004, is eligible to generate tradable RRCs. (RRCs created before January 1, 2004, could be used for compliance until December 31, 2011, after which they expired.) 

Verification and Reporting

Wisconsin uses the Midwest Renewable Energy Tracking System (M-RETS) to track and verify RECs. 

The PSC is required to submit a report to the Wisconsin legislature and governor every other year evaluating the impact of the RPS on the rates and revenue requirements of utilities. The most recent report was released in June 2022, confirming that each electric provider is in compliance with its RPS requirements.

Background

In 1998, Wisconsin enacted Act 204, requiring regulated utilities in eastern Wisconsin to install to an aggregate total of 50 Megawatts (MW) of new renewable-based electric capacity by December 31, 2000.