Commissioner Ellen Nowak
Public Service Commission of Wisconsin
The Basics
National Sources of Electricity
2010
6%
4%
20%
45%
24%
1%
*Source: U.S. Energy Information Administration
Coal
Petroleum
Natural Gas
Nuclear
Hydroelectric
Renewables
Other
The Basics
Wisconsin Sources of Electricity in 2010
3%
4%
21%
9%
62%
1%
*Source: U.S. Energy Information Administration
Coal
Petroleum
Natural Gas
Nuclear
Hydroelectric
Renewables
Other
New and Upcoming EPA Rules

Cross State Air Pollution Rule (CSAPR)

Utility Mercury and Air Toxics Standards
(MACT/MATS)

Coal Combustion Residuals (Coal Ash)

Cooling Water Intakes (316b)

NAAQS for Ozone, SO2 and NOx
CSAPR Basics
Sets emission budgets for 28 states in
Eastern United States, including tighter
standards for summer NOx emissions
 In Wisconsin, SO2 emission must be
reduced by 27%, NOx by 9%
 Finalized in July 2011 with an effective
date of January 2012
 Currently stayed by the Court of Appeals
for the District of Columbia

CSAPR Concerns in Wisconsin

Very short time to comply

Changes from proposed to final rule

FIP v. SIP (states were pre-empted from
preparing a SIP for 2012)

Assumption of controls already installed
2010
2011
2012
2013
2014
2015
2016
2017
2018
Utility MACT
Coal Ash
Clean Water
CSAPR
Rule Development
Compliance Preparation
Compliance
Utility MACT Basics

Regulates Mercury, Particulate Matter,
and Acid Gases.

Finalized December 2011

3 to 4 years to plan compliance

Limits calculated per unit, not per utility
Compliance Options

Short Term






Shifts in dispatch
Purchase allowances
Purchase power
Fuel switching
Chemical injection
Long Term
 Curtailment/retirement
 Install pollution controls
 Increased energy efficiency and demand
response measures
 53% of Capacity
is Coal
 38% have no SO2
or NOx Controls
 Average age of
coal fleet is 45 yrs
 Shutdowns within
MISO must be
coordinated
Reliability

Total Coal Capacity of 70,568 MW

13,000 MW at risk of retirement (based on
$4.50 gas price )

$580 to $880 Million in upgrades

Upgrades are rolled into MISO tariffs

MISO tariffs are passed down to utility
ratepayers
Costs

MACT + CSAPR = $18 billion annually
Source: National Economic Research Association, Inc.

Wisconsin: $1.1 billion in capital and $31
million in annual O&M cost
Based on an informal Survey of Wisconsin’s Major IOUs

MISO rate impact = 7-7.6%
Source: MISO’s EPA Impact Analysis, October 2011

12% increase in retail prices nationally
Source: EPA
PSC’s Actions: What we’ve done
so far…

Deferred CSAPR costs for 2011 rates

Declined proposal to have all investor
owned utilities participate in a statewide
collaborative effort for compliance

Required utilities to submit quarterly
reports from the utilities on compliance
strategies
PSC Actions: What’s next?





Evaluate the cost/benefit ratio of high-cost
emission control equipment installation
Work with utilities to determine treatment of
remaining investments in power plants
where retrofits are not economical
Monitor changes to rules on the legal front
Determine how emissions management
costs should be reflected in retail rates
Take steps to protect ratepayers against
price volatility and keep rates reasonable
316b
Coal Ash
CSAPR