Wisconsin governor calls for more supply, lower electricity taxes

Wisconsin Gov. Scott McCallum Sunday called for more electric generation and transmission capacity and reduced taxes on wholesale power transactions to insure Wisconsin has ample power supplies in the future. Without new electric generating capacity, the state could experience capacity shortages by 2007, according to a new assessment of the state's energy supply.

Jun 25th, 2001


By the OGJ Online Staff

HOUSTON, June 25 -- Wisconsin Gov. Scott McCallum Sunday called for more electric generation and transmission capacity and reduced taxes on wholesale power transactions to insure Wisconsin has ample power supplies in the future.

Without new electric generating capacity, the state could experience capacity shortages by 2007, according to a new assessment of the state's energy supply. Moreover, the state has a well documented shortfall in electric transmission capacity, and there is a question about the adequacy of the state's natural gas transmission system, according to the report.

McCallum said that's why it is crucial to put in place an energy policy that will serve the economic interests of the state, and still preserve resources and environment. It's imperative to avoid problems like those that have developed in California, McCallum explained.

"We've seen California struggle with electricity shortages and price volatility. Last winter's price hikes for heating fuel are not forgotten," he said.

While Wisconsin is writing rules to reduce mercury emissions, McCallum said concerns have been expressed that overly restrictive or poorly designed regulations could disrupt the ability of power producers to generate electricity at acceptable rates. Moreover, he noted, siting issues have become increasingly contentious for almost every type of energy infrastructure improvement.

McCallum said he has including the following recommendations as part of a comprehensive state energy policy:

� Wisconsin will take steps to assure the addition of at least 6,300 Mw of additional electric capacity by 2016.

� The state will move quickly to site a transmission line. Regulators will remove barriers discouraging on site generation and develop policies permitting utilities to introduce real time pricing to reduce peak demand.

� State regulators and Wisconsin gas utilities will study long-term demand forecasts for natural gas and capacity of existing pipelines to meet that demand.

� State agencies will study the effects of proposed mercury regulations on existing coal-produced electric generation capacity, and develop a policy that combines sound economics with environmental protection.

� The governor will encourage the legislature to reduce the tax rate on gross revenues from wholesale electricity sales to 1.59% from 3.19%.

� The Public Service Commission will review state restructuring policies and the status of restructuring around the US. The review will give state lawmakers a checklist against which to judge if Wisconsin's infrastructure is adequate before ordering changes in the industry's structure.

� State regulators will explore creation of a "power quality park" to provide highly reliable quality power to high technology and other electricity-dependent firms.

� Wisconsin will fund the 20¢/gal ethanol producers' incentive as recommended in the governor's budget.

� The state will explore expanding the amount of renewable energy required in the state's electric renewable energy portfolio, while insuring they meet an acceptable cost/benefit standard that reflects an acceptable rate of return on public funds.

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