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Wisconsin’s energy efficiency program, Focus on Energy, is coming under increased scrutiny as a Republican-controlled Joint Finance Committee prepares to take up Gov. Scott Walker’s proposed state budget. A group representing the solar industry in Wisconsin is predicting that the committee is likely to roll back increases in funding for the program approved in the last days of former Gov. Jim Doyle’s administration.

Focus on Energy, created in 2001, awards grants and rebates to homeowners, businesses and local governments for installing equipment (such as solar panels) or making other improvements that increase their energy efficiency. The program is funded by state-mandated contributions from electric utilities in the state. In December, the Joint Finance Committee (then controlled by Democrats) approved a proposal from the state Public Service Commission changing the way those contributions are calculated – thereby greatly increasing funding for Focus on Energy.

Previously, utilities were required to fork over 1.2 percent of their operating revenues every year, which resulted in about $100 million in year in funding for the program. Under the new system, the state collects a precise dollar amount from utilities, not a percentage of revenues. The PSC plans to collect a total of $120 million in 2011, $160 million in 2012, $204 million in 2013 and $256 million in 2014 and the same in years thereafter. The extra funding is designed to meet the PSC’s goals of cutting electrical and natural gas consumption in the state.

The solar industry group, the Wisconsin Solar Energy Industries Association, wrote to its members earlier this month that the Joint Finance Committee “is likely to amend the state budget bill to repeal those scheduled increases in the state budget.”

Meanwhile, the state Legislature’s Joint Audit Committee is considering ordering an audit of the Focus on Energy program. “Because these (utility) contributions are passed through to utility ratepayers, concerns have been raised about the program’s benefits and costs,” says a memo from the state Legislative Audit Bureau. An audit could serve as a thorough vetting of the program’s spending and effectiveness.

The solar industry group cautions the audit “may have a major influence on future legislative decisions on whether to continue the Focus on Energy program and at what level.”

Business and manufacturing interests – the Wisconsin Industrial Energy Group, the Wisconsin Manufacturers and Commerce, the Wisconsin Paper Council and others – are backing the audit. “We would like to have greater assurances of the overall cost effectiveness of Focus on Energy and welcome the scrutiny of a fresh set of eyes,” they write in a joint letter to the Legislative Audit Committee.

Their members benefit from the program – about 60 percent of its budget goes to business incentives, according to the Legislative Audit Bureau memo – but not from the higher electrical rates likely to result from increased funding for energy efficiency. “We believe Focus on Energy is beneficial but must operate in the most cost effective manner possible at current funding levels,” the letter says, “before allowing such a dramatic increase in a short period of time.”

According to the nonpartisan Legislative Fiscal Bureau, PSC models found that rates would increase 4.3 percent by 2014 (over 2010 levels) due to the increased Focus on Energy contributions. The PSC also estimated that by 2015, the average electric bill would begin to decline in the state as consumption declines – but the Fiscal Bureau notes this will only happen for customers who participate in Focus on Energy programs.

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