Cost to Comply

1
Wisconsin Act 141

• Cost to Comply

2
Wisconsin Act 9 RPS
2001 - 2002
0.5
2003 - 2004
0.85
2005 - 2006
1.2
2007 - 2008
1.55
2009 - 2010
1.9
2011 and Beyond
2.2
3
Wisconsin Act 141

• Originated from the Governors Task Force on
  Energy Efficiency and Renewables
• Task Force Submitted Recommendations in October
  2004
• Introduced as Senate Bill 459 in November 2005
• Enacted into Law in March 2006 by Governor Doyle
• Administrative Rules for Renewables Approved in
  Early 2007
• Midwest Renewable Energy Trading System (MRETS)
  Currently Under Development

4
Wisconsin Act 141

• Goals is to produce 10 of Wisconsin Retail Sales
  with Renewable Resources
• The Requirements are for each Retail Provider to
  add 2 to Baseline Renewable Generation by 2010
  and another 4 by 2015
• 2001, 2002 and 2003 Average Renewable Generation
  is used as Baseline which Includes Hydroelectric
• Any Excess Renewable Generation can be Converted
  into RRCs with a 4-year Bank Life

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Requirement Comparison
1 Million MWhs per year incremental requirement
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Renewable Need In Perspective

• 1,700 to 2,000 Megawatts of Wind Power Needed in
  Wisconsin (Wisconsin Currently has 50 MW)
• 2,000 MW of wind capacity is..
• About 1,333 wind turbines
• About 1,263 Dairy Digesters
• About 197 landfill gas-fired generators
• About 238 million square feet (8.6 square miles)
  of solar photovoltaic panels

Estimated at 30 Capacity Factor
7
Why Wind?

• Why Renewable Proponents Like It
• Next to Solar, it is the most environmentally
  benign
• Its not Nuclear, Coal or Natural Gas
• View it as Grass Roots Economic Development
• Why Independent Power Producers Like it
• RPS Mandates have Created a Market with Limited
  Alternatives
• In Terms of Risk Adjusted Returns, ROE is Very
  Attractive
• Why WPSC has Identified Wind Power as the Best
  Alternative
• Most Economic of Renewable Alternatives on a
  Large Scale
• Even In Consideration of
• Lack of Capacity Value
• Recent Cost Run Ups
• Interconnection and Deliverability Risk
• Siting and Permitting Risk
• Demonstrates that Other Alternatives are more
  risky and out of the money.

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Estimated Wind Project Costs(/Kw)

• EPRI TAG-RE 2002 997
• EPRI TAG-RE 2005 (Dec 04) 1,133
• EPRI TAG-RE 2006 (Dec 06) 1,753
• Cedar Ridge (06 Alliant CA) 1,823
• (Owner developed and constructed)
• Top of Iowa (06 MGE CA) 2,000
• (Turnkey Purchase)
• 2007 projected 2,100 to 2,400

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RISK Market Cost of Projects
Note This Represents a Snapshot in time to
Demonstrate Concept - 2002 MAIN Stack
For a 30 CF Project
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RISK - Interconnection
MISO QUEUE - WIND ONLY
Yes...that's 45,000 MW !
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RISK Locational Marginal Price
For Illustrative Purposes Only
Predicting when Transmission will be Available in
5 States is no Easy Task
12
RISK Siting and Permitting
Every 1 change in capacity factor results in a
2.50/MWh change in energy price for wind
Moving the turbines on western ridge resulted in
a decrement to capacity factor
Over the period of project delay, the price of
turbines increased by over 400,000 per MW
nameplate rating
PSCW Imposed Setback
Estimated Impact of 8,000,000/year for 20 years
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- Thank You -

• Questions or Comments?