April 23, 2010Client Alert

Wisconsin Legislature Fails To Pass Clean Energy Jobs Act

Efforts to secure the needed votes for passage of the Clean Energy Jobs Act (SB 450 / AB 649) failed in both houses of the Wisconsin Legislature this week during the final days of general session. The Assembly Special Committee on Clean Energy Jobs passed a revised version of the bill on a partisan vote of 6-3 on April 16, 2010, and scheduled the bill for a floor vote this week. However, the Senate Select Committee on Clean Energy refused to schedule the bill for a vote in their committee, and yesterday the Senate adjourned prior to an Assembly floor vote which effectively killed the bill. Ironically, the Clean Energy Jobs Act died on the 40th Anniversary of Earth Day.

The landmark legislation was an outgrowth of recommendations made in 2008 by Governor Jim Doyle’s Global Warming Task Force that aimed to combat climate change by encouraging the development of renewable energy. As outlined in our January alert (Wisconsin Legislature Introduces Clean Energy Jobs Act to Implement Governor Doyle’s Global Warming Task Force Recommendations), the bill as originally drafted, mandated that 25% of Wisconsin’s energy stem from renewable sources by 2025, established a goal to reduce statewide energy consumption by 2% each year starting in 2015, proposed renewable tariffs for the purchase of privately produced renewable energy, ordered tough vehicle emission standards modeled on those currently in force in California, and allowed for the construction of new nuclear plants.

After the bill was introduced in January, the Assembly and Senate Special Committees held public hearings and heard over 30 hours of testimony on the proposal. Following public debate on the bill, on April 13, 2010, a substitute amendment to the original bill was introduced. The substitute amendment, which was adopted by the Assembly Special Committee, maintained the 25% renewable energy standards goal by 2025; modified language on renewable mandates to allow electricity providers to use certificates generated by energy savings from conservation investments/projects to help comply with the Renewable Portfolio Standard requirements; and modified criteria for the building of new nuclear power plants. The substitute amendment also removed some of the more controversial provisions including: a non-severability clause in the section on nuclear power plants that raised constitutional questions among some critics; renewable tariffs; California vehicle emission standards; low carbon fuel standard requirements; and a boiler inspection and efficiency requirement that had been a concern for many industrial facilities.

Although Democrats control both houses and the Governor’s office, in recent months there were significant disagreements on major portions of the bill and the bill’s effect on the economy due to conflicting studies that were prepared. Supporters, including some utilities, businesses, renewable energy developers and environmentalists applauded that the bill would reduce energy costs by $1.4 billion over 15 years, generate at least 15,000 jobs by 2025, create new renewable energy standards, set energy conservation goals, and accelerate development of the state’s green energy technologies. Opponents, including some of the state’s largest business trade associations representing manufacturers, contractors, builders, food processors, independent business owners, auto and truck dealers, and fuel retailers, were concerned that the bill would add $15 billion or more in new costs, raise utility rates and result in the loss of 43,000 jobs.

At the outset, the bill proved to be overly ambitious, and by the time it was scaled back it was too late. In the end, concerns over the potential cost of the bill clouded the debate and supporters of the bill were put on the defensive in days and weeks leading up to the final chamber votes. Ultimately, neither the Senator nor the Assembly took a final vote on the revised bill. Although the bill was defeated, some supporters are hopeful that the legislature will continue to work to adopt a long-term strategy for greater energy independence with clean energy goals that are both good for the environment and the economy.

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