The Public Service Commission of Wisconsin on Aug. 1 issued the final version of its ninth biennial Strategic Energy Assessment (SEA).
It was required to hold a public hearing before issuing the final SEA. That public hearing was held on May 11.
There are some notable differences in this SEA compared to prior SEAs. For example, data collection for this SEA included a survey of all municipal and investor-owned utilities specific to customer-owned generation, known as distributed energy resources (DER). DER is a growing trend across the country and in Wisconsin, and contributes to an electricity provider’s demand profile. The overall volume of DER is expected to grow in the future.
There are also some regional and national trends and changes that are impacting Wisconsin. These so-called externalities are not regulated or controlled in Wisconsin. Specifically, in late 2015, the U.S. Environmental Protection Agency (EPA) promulgated new air pollution rules to regulate carbon emissions from electric generating units. The Clean Power Plan requires reductions in carbon dioxide (CO2) emissions from existing power plants and establishes emissions limits for any new power plants. Wisconsin, along with over 26 other states, challenged these regulations in federal court. The U.S. Supreme Court granted a stay of the rules while the litigation proceeds. The Governor of Wisconsin has directed that no further work be done to develop or promote the development of a state plan in response to these rules until after the outcome of the litigation is known. As a result, this SEA does not attempt to address any outcomes related to the regulation of carbon from electricity generating units.
Furthermore, the Midcontinent Independent Service Operator (MISO), through its role as a regional planning body, directly impacts how electricity is produced and transmitted in Wisconsin. MISO developed a new Aggregated Forecasted Supply and Demand calculation which impacts planning in Wisconsin. This calculation is used in this SEA.
Data collected for the purposes of this SEA indicate that Wisconsin’s planning reserve margins are forecasted to remain above 13% through 2022. The planning reserve margin for the 2016-2022 period is between 13.6% and 16.9%.
- Wisconsin exceeds the planning reserve requirement set by MISO for 2016.
- Electricity providers expect slow but continued growth in peak demand and estimate increases in non-coincident peaks to be between approximately 0.5 and 1.6% for the 2016 through 2022 time period.
- Wisconsin’s primary electric generation fuel source continues to be coal with approximately 62% of energy generated in Wisconsin from coal-fired facilities in 2014.
- 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.
- Between 200 MW and 700 MW of new generation is expected from 2016-2022.
- Wisconsin electric utilities estimate that they will retire approximately 520 MW of existing Wisconsin-based electric generation by 2020.
The MISO reliability footprint consists of 15 states and one Canadian Province. MISO’s energy and operating reserves markets had gross annual charges of $37 billion in 2014.
The SEA reports that:
- The most recent MISO transmission expansion planning (MTEP) process contains 357 new projects that total $2.64 billion in transmission facilities, in year-of-occurrence dollars.
- MISO conducts an annual Long-Term (10-year) Resource Assessment. Since resources are typically committed five years in advance, a planning gap often appears late in the analysis period. A planning gap occurs when the difference between planned and committed resources is less than any anticipated planning reserve margin.
- The Federal Energy Regulatory Commission’s (FERC) Order 1000 requires coordination with neighboring regions, whether they are regional transmission organizations (RTOs) or transmission planning regions. The Wisconsin commission continues to work with MISO and other states to fully participate in this and other interregional processes and studies.
Approximately 46% of Wisconsin’s nameplate capacity is coal-fired, with natural gas combustion turbine and combined cycle facilities providing more than 36% of Wisconsin’s nameplate capacity. The generation capacity fuel mix in Wisconsin is generally unchanged since the last SEA.
In 2014, approximately 62% of the electricity was supplied by coal-fired units, and 12.5% was supplied by natural gas. The percentage of electricity generated by nuclear plants decreased from 18% in 2012 to 15.3% in 2014. The relative changes in electricity generated since the last SEA are largely the result of the decommissioning of the Kewaunee nuclear plant.
Since the last SEA, Wisconsin electricity providers added relatively little new generation capacity. During this time period, electricity providers experienced slow demand growth and adequate PRM. However, with Dominion’s 2013 decision to close the (556 MW) Kewaunee nuclear plant and the pending retirements of several smaller and older coal facilities, electricity providers expect a combined need for an additional 200 MW-700 MW of capacity and energy by 2020. A number of new generation projects have been proposed to meet this combined need:
- Xcel Energy (NYSE: XEL), the parent of Northern States Power-Wisconsin (NSPW), estimates it will add approximately 700 MW of capacity by 2019, including: 73 MW of hydroelectric; 60 MW of wind; 170 MW of solar photovoltaic; and 480 MW of natural gas-fired generation. Northern States Power-Minnesota (NSPM), NSPW’s sister company, also anticipates additional capacity due to upgrades to existing electric generating facilities. All the upgrades planned by NSPM are expected to be at plants located outside of Wisconsin. Under the terms of an interchange agreement between Xcel and NSPW, NSPW would be entitled to receive 16% of the capacity and energy from the facilities.
- Wisconsin Electric Power (WEPCO) indicated that it will add approximately 70 MW of capacity during this SEA period as a result of upgrades to existing generating facilities.
- On May 1, 2015, Wisconsin Power & Light (WP&L) submitted an application with the commission for authority to construct a nominal 700 MW natural gas-fired, combined-cycle facility at its existing Riverside site in the Town of Beloit, Wisconsin. On May 6, 2016, the commission authorized construction of the Riverside unit. WP&L expects the Riverside unit to begin operation in 2020.
- Dairyland Power Cooperative (DPC) stated it will likely need to build a natural gas-fired, combined-cycle generating facility in the 2022-2023 time frame.