Wisconsin expects reserve margin between 14.2% and 17.5% through 2022

The Public Service Commission of Wisconsin recently issued a draft version of “Energy 2022” that finds the state’s planning reserve margin should remain above 14% through 2022.

The planning reserve margin for 2016 through 2022 is expected to be between 14.2% and 17.5% according to Wisconsin’s biennial, statutorily-required, Strategic Energy Assessment (SEA), which is currently available for public comment and review.

The report notes that Wisconsin exceeds the 7.1% reserve requirement set by the Midcontinent ISO (MISO) for 2016.

About 720 MW of new generation is expected to be added to the state’s generation mix during the six-year period. The Alliant (NYSE:LNT) Riverside natural gas expansion project will account for most of the new generation.

Wisconsin electric utilities estimate that they will retire approximately 520 MW of existing Wisconsin-based electric generation by 2020.

The report notes that Wisconsin’s primary electric source continues to be coal, which accounted for 65% of state generation as recently as 2013. The Wisconsin PSC does expect to have 2014 power generation figures available in time for the final version of the assessment.

The draft report also recaps major emission control projects implemented at Wisconsin coal plants in recent years. Since 2000, Wisconsin generation owners have spent approximately $3bn on emission control upgrades. Many of these projects were the result of Consent Decrees that the electricity providers entered into with the Environmental Protection Agency (EPA).

The percentage of electricity generated by nuclear plants decreased from 18% in 2012 to 15% in 2013 due to retirement of the Dominion (NYSE:D) Kewaunee nuclear facility.

As of Jan. 1, 2016, coal still accounted for 46% of the electric generation capacity in Wisconsin. Natural gas accounted for 36% of the capacity. Nuclear power was a distant third at 6% of the generating capacity. There was also fuel oil (4%), hydro and wind (3% each). All other sources were 1% or less.

“The shutdown of the Kewaunee nuclear facility and decreases in the cost of natural gas, among other factors, continue to change the generation mix proportions in the state,” according to the draft of the assessment.

Wisconsin policy requires that roughly 10% of all electricity sales in the state be served by renewable energy in 2015. The assessment notes that renewable power sales topped 10% for the first time in 2013 “and projections show this goal will continue to be met through at least 2020.” Wind energy accounts for most renewable energy available to Wisconsin.

Average residential electric rates in Wisconsin during 2015 amounted to 14.42 cents, which was slightly higher than the averages for both the Midwest and the United States as a whole. Despite slightly higher than average electric rates, Wisconsin residential customers have the fourth smallest monthly electric bill when compared to Midwestern states.

The ninth strategic assessment covers the years 2016 through 2022. This latest draft assessment also devotes more attention to distributed energy resources (DER) than prior ones.

“DER is a statewide development in Wisconsin,” draft assessment said. “Seventy-five percent of the state’s 12 IOUs, and 66 percent of the municipal electricity providers report at least one DER installation in their service territory.”

During the past year, 11 large Wisconsin-based investor-owned utilities, cooperatives, municipal electric utilities, and other electricity and transmission providers submitted both historic information and future forecasts in connection with the report.

The report looks at electric providers that own, operate or control at least 5 MW of electric generation capacity. The PSC evaluation also considers entities that provide retail electric service or that self-generate electricity for internal use and sell any excess to a public utility.

A public hearing is scheduled May 11 at the PSC building in Madison, Wisconsin. All comments are due June 22.

Energy 2022 outlines ongoing issues to help Wisconsin maintain reliable electric service and a balanced energy portfolio, providing stable rates for customers. Docket # 5-ES-108.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.