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Expensive state energy rules would hurt business climate

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Todd Stuart
February 24, 2010

With so much heat being generated over health care reform these days, it’s a bit surprising that there isn’t much public protest—or even discussion—of another smack at Wisconsin’s collective pocketbook.


Our electricity bills are rising—and rising fast.


We simply must raise our level of public discussion about this.


The state now requires our utilities to invest in renewable energy sources, such as wind, to provide 10 percent of our electricity from renewable sources by 2015. The governor’s global warming legislation recommends more than doubling down on that commitment, requiring 25 percent of our electricity from renewables by 2025.


Missing in this discussion is what this will cost—and whether these massive new costs will affect our manufacturing base and state economy.


It will cost a lot. By one estimate, it will take $16 billion to build enough renewable generation to meet 25 percent of our needs.


How it will affect our economy is unclear. But to the manufacturers we represent, this poses a potential disaster.


Wisconsin, the leading manufacturing state, has already lost 63,000 manufacturing jobs that pay above-average wages. At the same time, Wisconsin used to have among the lowest electricity rates in the Midwest. Now we’re among the highest and our bills are still rising rapidly.


In just the last few months, Wisconsin’s utilities increased rates by more than $150 million. The new rate hikes are on top of more than $1 billion in higher rates approved in the last five years. That’s an extra $180 per year for a household in Wisconsin and millions of dollars in new costs for the state’s largest factories.


We’re not even half way to meeting our 10 percent goal. And now we’re seriously talking about another $16 billion in new costs on top of that? Our higher rates have already influenced companies to shut down factories or consider expanding elsewhere.


Worse, we’re also considering doing this alone—requiring massive new costs that other states and other nations won’t face.


My industrial members favor investments in conservation, energy efficiency and renewables when cost-effective. We need to be more efficient, and we support policies that provide the most bang for the buck. In fact, manufacturers have already invested millions in energy efficiency, and we represent the only part of our economy to have flat or declining energy consumption and air emissions.


But we simply can’t pretend costs don’t matter. With double-digit unemployment in manufacturing-dependent areas of Wisconsin, it’s pretty clear they do.


So let’s elevate the debate and work toward realistic energy policies that will improve the environment and improve our economic competitiveness. We need a real cost-benefit analysis performed on this controversial legislation, and we absolutely need stronger cost caps and cost containment initiatives added to existing state energy laws.


Todd Stuart is executive director of the Wisconsin Industrial Energy Group Inc. (WIEG). WIEG is a nonprofit association of 25 of the state’s largest businesses, which collectively employ more than 50,000 workers. WIEG advocates for policies that drive affordable and reliable energy. For additional information, visit www.wieg.org.

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