Wisconsin Focus on Energy supports statewide programs that promote energy efficiency and renewable energy*. The program was initially created by Act 9 of 1999 as a public benefit fund (PBF), which also provided energy assistance programs for low-income residents (the Home Energy Plus Program). Focus on Energy was restructured in March 2006 by S.B. 459 (2005 Act 141). This law, most of which took effect July 1, 2007, replaced existing renewable energy and energy efficiency PBF programs with programs that utilities create and fund through contracts with private program administrators, with oversight and approval by the Public Service Commission of Wisconsin (PSC). Because Act 141 requires utilities to pay directly for programs, the state will not be able to transfer or otherwise use these funds for general obligations. (From 2002 to 2006, the governor and legislature transferred or reallocated more than $108 million from the PBF to the state's general fund or for other uses.) Thus Focus On Energy is no longer precisely a state public benefits program, although it remains a statewide program that serves many of the same purposes that PBFs serve in other states.
Wisconsin utilities contract with Shaw Environmental & Infrastructure, Inc. to administer the mass markets, targeted markets, and research portfolios. Collectively, the energy efficiency, renewable energy, and research components comprise the Focus on Energy initiative. Focus on Energy provides information, financial assistance, technical assistance and other services to residents, businesses, schools, institutions and local governments. Financial assistance takes the form of rebates, grants and loans.
Under Act 141, each electric and natural gas investor owned utility is required to spend 1.2% of the latest 3-year average of its gross operating revenue on energy-efficiency programs and renewable-resource programs. With PSC approval, a utility may retain a certain portion of the revenue it is required to spend on statewide programs to administer or fund a new energy-efficiency program for the utility's large commercial, industrial, institutional or agricultural customers. Act 141 originally authorized the PSC to specify a higher funding level which would be recovered by utilities through rate increases, but this measure was removed by the 2011 budget act.
"Large energy customers" may implement and fund an energy efficiency project with PSC approval, may deduct the cost from the amount the customer is required to pay its utility for cost recovery. The utility, in turn, deducts that amount from the amount that it is required to spend on statewide or utility-administered programs. A "large energy customer" is defined as a customer that has a monthly energy demand of at least 1,000 kilowatts or 10,000 therms of natural gas and, in any month, has been billed at least $60,000 for electricity or natural gas -- or both -- for all its facilities within a utility's service territory.
The state's municipal utilities and electric cooperatives have the option of participating in the state program or operating their own "commitment-to-community" programs, which are similar to Focus on Energy. There is a cap on fees for these programs of the lesser of $375 per month or 1.5% of the total other monthly charges. The PSC does not oversee "commitment-to-community" programs, but Act 141 does require cooperatives and municipal utilities to submit annual program audit reports to the PSC. These programs remain otherwise unaffected by the Act 141 amendments.
Act 141 also requires the PSC to conduct a review of the programs every 4 years. Focus on Energy is required to meet certain energy savings requirements over each 4-year period. In April 2012, as part of the Quadrennial Planning Process, the PSC ordered the funding for renewable resource funding for 2013 and 2014 will only be upheld if 1) the benefit-to-cost ratio of the renewables programs is at least 2.3 and 2) the renewables programs do not reduce energy savings of the entire Focus program more than 7.5%.
The original PBF legislation required utilities to fund energy efficiency programs and renewable-energy programs through (1) a public benefits fee that utilities collect directly from customers and (2) mandatory utility "contributions," which utilities recover from customers in rates. The amount of the charge was based on levels of utility expenditures for energy programs prior to the enactment of Act 9. The fee generated approximately $16 million annually, and the charge generated approximately $46 million annually. In fiscal year 2005, these two sources of revenue generated a combined total of $62.9 million for renewables and efficiency. In addition, the state's five major investor-owned utilities administered and funded several related programs required by the PSC. In 2004, the five utilities spent a combined total of approximately $38.8 million on these programs, which included energy-efficiency projects, renewable-energy projects, load management, and related measures.
*The definition of "renewable resource" under Wis. Stat. § 196.374 includes solar, wind, water power (i.e., hydroelectric), biomass, geothermal, tidal or wave, and fuel cells that use renewable fuels. However, at present Focus on Energy does not offer incentives for all of these technologies. Please see the individual listings on the program website for detailed eligibility information.