Last Updated July 26, 2021
Public Benefits Fund
Wisconsin Department of Administration
Eligible Renewable/Other Technologies:
Public Benefits Fund HistoryWisconsin's public benefits fund (PBF), created in 1999, supports energy-efficiency programs, renewable-energy programs, and energy assistance for low-income households. Efforts in the mid-1990s to restructure and deregulate the electric utilities led numerous states to implement public benefits charges as a new source of funding for efficiency. These public benefits approaches established new structures under which utilities—or, in some states, separate efficiency utilities or other third parties—were tasked with administering and delivering energy efficiency, renewable energy, and low-income programs. Nationwide reported savings from utility and public benefits electricity programs in 2019 totaled 0.70% of sales, or 26.9 million MWh.
Focus on Energy
The Wisconsin Department of Administration administers these programs and contracts with a third party -- Focus on Energy -- to implement them. Focus on Energy offers funding for renewables in the form of grants, rebates and loans. In Fiscal Year 2005, the program was administered by the Wisconsin Energy Conservation Corporation and operated with assistance from the Wisconsin Renewable Energy Network. Wisconsin's PBF supports photovoltaics (solar-electric systems), commercial solar water-heating systems, wind energy (mostly commercial), on-farm biogas-energy systems and commercial biomass heating. In 2020, over 128,000 homeowners and 6,100 businesses participated in the program. The program boasts that for every dollar invest on their projects returns $5.16 in benefits to the state. In 2019, Wisconsin had a net incremental electricity saving of 455,118 MWh and natural gas and fuel efficiency program savings of 1,829,486 MMBtu, well over the national state medians of 277,469 MWh and 160,000 MMBtu.
Legislation and Funding
The original PBF legislation (1999 Act 9) requires utilities to fund energy-efficiency programs and renewable-energy programs through (1) a public benefits fee that utilities collect directly from customers and (2) mandatory utility contributions, recovered by utilities from customers via rates. In fiscal year 2005, the fees generated $16.2 million, and the contributions generated $45.8 million, for a total of approximately $62 million for renewables and efficiency. (In fiscal year 2005, $58.2 million was collected for low-income energy-assistance programs.) Wisconsin's PBF was restructured in March 2006 by the enactment of SB 459 (2005 Act 141). This law, which takes effect July 1, 2007, will replace the Wisconsin Department of Administration's PBF programs with programs that utilities create and fund through contracts with private program administrators. Because SB 459 requires utilities to pay directly for PBF programs, the funds collected are safe from transfer by the state. (During fiscal years 2002-03 to 2006-07, the governor and legislature transferred or reallocated more than $108 million from the PBF to the state's general fund or for other uses.) Under SB 459, each electric utility and natural-gas utility is required to spend 1.2% of its annual operating revenue on energy-efficiency programs and renewable-energy programs. (The total operating revenue of all utilities in 2004 was $6.87 billion; 1.2% of that amount is $82.4 million.) Utilities recover the cost through rates. A utility may retain a portion of the revenue it is required to spend on statewide programs to administer or fund a new energy-efficiency program for the utility's large commercial, industrial, institutional or agricultural customers. "Large energy customers"* may implement and fund an energy-efficiency project or a renewable-energy project and, with approval from the Wisconsin Public Service Commission (PSC), may deduct the cost from the amount the customer is required to pay its utility. SB 459 freezes the amount that the largest energy consumers are required to pay. The PSC will oversee statewide programs and programs administered by investor-owned utilities. The original PBF legislation requires municipal utilities and electric cooperatives to conduct efficiency and renewables programs, known as "commitment-to-community" programs, which are similar to Focus on Energy. Alternatively, a municipal utility or electric cooperative may contribute the revenue it is required to collect to the state fund. There is a cap on the aggregate of fees collected from the largest energy customers for both energy and low-income programs. SB 459 requires these programs to include load-management programs, and requires utilities that choose not to conduct their own programs to contribute revenue to the statewide program created and funded by investor-owned utilities. The PSC does not oversee commitment-to-community programs. SB 459 requires that all Wisconsin residents have comparable access to the programs' benefits, and that the benefits of the program to any class of customers be proportional to the amount that customer class pays for the programs in rates.
* A "large energy customer" is defined as a customer that has a monthly energy demand of at least 1,000 kilowatts or 10,000 therms of natural gas and, in any month, has been billed at least $60,000 for electricity, natural gas or both for all of its facilities within a utility's service territory.