Matt Kasper With just a few weeks remaining as governor, Republican Scott Walker appointed his top aid Ellen Nowak to the Public Service Commission (PSC). Earlier this year, Nowak was chosen by Walker to be the secretary of the Department of Administration as her six-year term on the PSC was set to expire in 2019. Nowak will now take over Chairman Lon Roberts’ position at the regulatory agency overseeing public utilities and serve through 2023. Nowak was first appointed to the PSC in 2011 and was named Chairperson in March 2015.
The Wisconsin State Journal notes that Nowak will soon vote on several significant projects, including a proposed $700 million natural gas plant in Superior that is co-owned by Minnesota Power and Wisconsin’s Dairyland Power Cooperative, and several solar projects.
Additionally, We Energies will file a rate case in the coming months after being ordered to in August 2017. The utility could ask Nowak and the other two commissioners to approve a request that would raise electric bills, increase fixed charges, or add fees on solar customers, along with a variety of other issues that didn’t get resolved last year.
We Energies could also try again to ban third-party ownership of solar installations, since legal uncertainties continue to remain regarding the renewable energy policy. In December 2017, the PSC declined to open a docket on a petition filed by Wisconsin Solar Energy Industries Association (WiSEIA) for a declaratory ruling on third-party financing of solar projects. WiSEIA requested to provide third-party financing to two elementary schools and two high schools. The utility has instead pushed for its own pilot rooftop solar programs, which if approved by the PSC will allow We Energies its own profit margin – currently 10.2 percent, according to the Milwaukee Journal Sentinel.
WEC Energy Group, the parent company of We Energies, and other utilities in the state have been generous funders of Walker’s election campaigns. In the 2018 gubernatorial race, the utilities and their executives contributed thousands of dollars to Walker and none to Democratic nominee Tony Evers. Gale Klappa, chairman and CEO of WEC Energy Group, donated $10,000 to Walker in March.
While at the PSC, Nowak made headlines when she advocated for changes to the way electric rates are structured at an Edison Foundation event with executives from the utilities she regulates in attendance, including Klappa.
Bloomberg reported that We Energies then submitted a proposal to increase fixed charges on all residential bills.
Most electric customers generally pay two charges on their monthly bill: a “fixed charge” levies a fee for the cost of connecting the customer to the grid, and is the same every month. An “energy charge” is tied to how much electricity the customer uses; if the customer uses more, they pay more.
Utilities face the conundrum that they are increasingly collecting less money from customers as people and businesses become more efficient in their use of electricity and begin adopting rooftop solar power. Many utilities have responded by trying to collect more money via fixed charges, but those efforts have proven politically unpopular since fixed charges raise equity concerns, limit customer control, and disincentivize people from using less energy. Regulators have often rebuffed utilities’ fixed charge requests in other states.
We Energies also asked to pay less for the power generated by customers with rooftop solar and add a fee on all solar customers that they would have to pay to the utility each month.
The PSC approved We Energies’ request with Nowak voting in favor. (A court later rejected We Energies’ fee on solar customers, ruling that the utility did not provide evidence to justify the discriminatory fee.)
Madison Gas & Electric and the Wisconsin Public Service Corporation submitted proposals to change the way their rates are structured after the Edison Foundation event as well.
Nowak also voted to increase fixed charges for customers of Wisconsin Public Service Corporation and Madison Gas & Electric.
The following year, Xcel Energy filed a request to increase its fixed charge, which the PSC approved.
Public records obtained and published by the Energy and Policy Institute have shed light on Nowak’s relationship with utilities and conservative organizations.
In 2016, Nowak was a panelist at the State Policy Network’s (SPN) 24th Annual Meeting in Nashville. SPN is a coordinated network of conservative think tanks in nearly every state in the country, funded by the Koch brothers and other fossil fuel interests. It’s an $83 million empire that drives corporate-backed American Legislative Exchange Council(ALEC) model bills in state capitals.
Nowak spoke on the SPN panel titled, “Strange Bedfellows: Understanding the Odd Marriage Between Environmentalists, Utilities, and the Clean Power Plan.” The commissioner was not shy in expressing her views about President Obama’s carbon reduction plan. In 2015, she testified in front of the U.S. Senate Committee on Environment and Public Works and said the rule would raise electricity costs and threaten the stability of the electric grid. In September 2016, Nowak received the “Innovator Award” from the conservative media outlet Right Wisconsin for her fight against Obama’s climate change plan.
Nowak was also invited to attend private industry events in Miami, Palm Beach, and Vail.
Last October, Nowak participated in a private invite-only event at the Eau Palm Beach Resort in South Palm Beach, Florida. Wisconsin Commissioner Mike Huebsch was also a participant. An agenda and participant biography details how the regulators met and discussed energy-related topics with utility executives without the presence of national environmental, consumer and public interest groups, such as the Sierra Club or Public Citizen.
In 2016, Robert Gee of Gee Strategies invited Nowak to attend the Energy Policy Leadership Summit held on December 6-7 in Miami. Gee emailed Nowak, “As a seasoned veteran of this executive dialogue, you don’t require any explanation of the value of this type of event. This year, given the impending transition to a new administration, no matter which party prevails, this discussion will assume even greater importance should divided government continue, as predicted.”
Another email from Robert Gee showed that just a few other utility regulators had confirmed their participation, including Huebsch. Gee also reminded the Wisconsin regulators that the conference does not have an audience but is an “executive dialogue structured to promote discussion between invited participants, including those not speaking on panels.” The agenda listed the invited executives from several investor-owned utility companies, including Xcel Energy. Gee’s invitation email also included the fact that the Edison Electric Institute, the trade association for investor-owned utilities, sponsored the program.
The agenda included a welcome dinner at Morton’s Steakhouse, a keynote from EEI’s since-retired Executive Vice President David Owens, a moderated panel conducted by EEI’s current Executive Vice President Phil Moeller, and a panel that included Michael Maslansky, from Maslansky & Partners, who was hired by EEI to help repair the utility industry’s image.
No representatives from any environmental advocacy or clean energy organizations were listed on the agenda, despite multiple panels which focused on those issues.
Robert Gee also invited Nowak to attend another invitation-only meeting: the 11th Annual Macquarie Utilities, Power and Energy Infrastructure Dialogue in Vail, Colorado in March 2016. Nowak’s panel was titled, “The Regulators Conundrum – Lowest Immediate Cost vs. Industry Sustainability.” Gee thanked Nowak for accepting the invitation and sent details that revealed the conference took place under Chatham House Rule. Gee also explained that the discussions would be conducted in the mornings to allow attendees to take advantage of the alpine activities in the “beautiful mountain environment” in the afternoons.
