The Assembly Clean Energy Jobs Committee is holding its last public hearing today on Assembly Bill 649, the 174-page bill encompassing numerous policy recommendations from the Governor’s Task Force on Global Warming. (The Senate companion bill is SB 450.)

The Senate finished its hearings last week. The biggest news from the Senate hearings last week were statements made by Democrat Senators Jeff Plale (South Milwaukee) and Bob Jauch (Superior) noting their concerns with portions of the bill, in particular the Low Carbon Fuel Standard (LCFS) provision. An LCFS would essentially restrict the use of oil derived from Canada’s oil sands. Wisconsin currently receives roughly 50 percent of its oil from Canada. An LCFS would also punish ethanol.

Once the hearings conclude, it is expected that legislators may begin paring back controversial provisions to make the bill more likely to pass. What, if anything, is removed remains to be seen.

Hamilton Consulting Regulatory Watch will continue to provide timely updates as the legislation moves forward.

As noted last week, the Senate and Assembly special committees created for the climate change bills (AB 649/SB 450) begin a slate of hearings today, beginning at 11:45 a.m. at the Capitol. Beginning today, Hamilton Consulting Regulatory Watch will provide updates of all of the hearings.

Today’s hearing is for informational purposes only, meaning that the public is not yet allowed to provide public comments. It will be an opportunity for legislators on the committees to ask questions about the very complex piece of legislation.

To view Hamilton Consulting Regulatory Watch’s analysis of the 174-page bill, please click here.

Senators Jeff Plale and Mark Miller today announced a series of hearings on Gov. Doyle’s global warming bill, dubbed the “Clean Energy Jobs Act.” The 174-page bill (SB 450/AB 649) would considerably alter Wisconsin’s economy. For more information about what is in the bill, see Hamilton Consulting’s analysis.

Below is a schedule of hearings on particular topics within the omnibus legislation: 

• 10:45 a.m., Wed., Jan 20: Informational hearing (Room 412-E).
• 10 a.m., Wed., Jan. 27: Public hearing focusing on: Public Service Commission, industrial energy incentives (412-E).
• 10 a.m., Wed., Feb. 10: Public hearing focusing on: Vehicles; fuels, planning, transportation infrastructure; energy efficient buildings and equipment; bioenergy (412-E).
• 10 a.m., Thu., Feb. 11: Public hearing on: Goals, program coordination and evaluation, public education, state and local government, cap and trade report (412-E).

After months of meetings and drafting, the global warming legislation has been officially released. The bill, 174 pages in length, would dramatically change energy consumption and Wisconsin’s economy. 

Most notable are provisions adding a “low carbon fuel standard,” which is aimed at curtailing the use of Canadian crude derived from oil sands in Alberta, Canada. Wisconsin receives nearly 50 percent of its oil from Canada. If a low carbon fuel standard is adopted, Wisconsin’s oil supply would be drastically affected, leading to considerably higher gas prices.

The bill would also force Wisconsin to adopt California’s low emission vehicle standards. Under the federal Clean Air Act, California is the only state allowed to create its own set of greenhouse gas emission standards. States may adopt California’s standards, but once they do, they must follow any changes adopted by the California Air Resources Board. To meet California’s very strict standards, states must restrict the sale of trucks, minivans and SUVs. This could prove to be extremely problematic for Wisconsinites, who rely heavily on such vehicles for hunting, farming, and getting around during our harsh winters.

Hamilton Consulting  is analyzing the language released yesterday and will provide continuous updates as the bill moves forward. Updates can be found at the Hamilton Consulting Regulatory Watch.

The Wisconsin Policy Research Institute (WPRI) this week issued a study titled, “The Economics of Climate Change Proposals in Wisconsin,” which analyzes the costs associated with complying with the various policy recommendations contained in Wisconsin’s Governor’s Task Force on Global Warming Final Report.

The study predicts Wisconsin will lose 49,000 jobs over the next 11 years if all of the Task Force’s policies are adopted. This number may be a bit skewed because not all of the Task Force’s recommendations will be adopted, such as a state-specific cap-and-trade program. However, the study provides the most comprehensive analysis to date of the total costs associated with policies contained in the Governor’s Task Force Final Report.

Below are a few of the study’s major findings:

• Adopting a Low Carbon Fuel Standard, a policy aimed at prohibiting crude imported from Canada’s oil sands, would cost Wisconsin   $3.3 billion by 2020. Wisconsin receives a significant portion of its oil from Canada, which has the second largest crude oil reserve in the world.
• Adopting California’s Low Emission Vehicle standards would cost Wisconsinites $359 million in 2009 (assuming it is implemented that year).
• Amending Wisconsin’s current Renewable Portfolio Standard, which requires electric utilities to produce a certain percentage of electricity from renewable sources, would cost Wisconsin ratepayers $16.2 billion by 2025. Under current law, Wisconsin electric utilities are required to produce 10 percent of their energy from renewable sources by 2015. The Task Force’s Final Report recommends requiring utilities to meet the 10 percent goal by 2013, and then increases the goal to 20 percent by 2020 and 25 percent by 2025.

A final omnibus bill containing the Task Force’s recommendations is expected to be introduced in early December with public hearings commencing shortly thereafter.

The EPA yesterday announced that it sent to the White House its final endangerment finding. An endangerment finding paves the way for the EPA to regulate greenhouse gases under the Clean Air Act.

 In April, the EPA announced its findings (and technical support document) that greenhouse gases threaten the public health and welfare. EPA’s finding was in reaction to the U.S. Supreme Court’s decision, Massachusetts v. EPA. In that landmark decision, the Court found that greenhouse gases may be air pollutants covered under the Clean Air Act if the EPA Administrator determines that such emissions cause or contribute to air pollution and reasonably can be anticipated to endanger public health or welfare.

The EPA’s action could have an effect on the climate change legislation currently pending in Congress. If Congress does not enact climate change legislation, the EPA has announced that it will move forward with regulations that potentially could be much more stringent and harder to comply with than the currently drafted climate change legislation. This has led some larger utilities to call on Congress to pass federal climate change legislation. According to the Wall Street Journal, some power companies prefer a cap-and-trade program as opposed to EPA regulations because the former gives utilities greater flexibility. Some utilities also believe that a federal cap-and-trade legislation would be less costly to comply with than regulations under the Clean Air Act.

As we’ve previously reported, it’s not entirely certain that the Senate will be able to pass comprehensive climate change legislation this year due to other major pending issues, such as the health care legislation and annual agency spending bills. This kicks the controversial climate change legislation into an election year, which may make it difficult for the Senate to reach the necessary votes (60) to stave off a filibuster.

The Assembly Committee on Renewable Energy and Rural Affairs and Senate Committee on Rural Issues, Biofuels, and Information Technology this week held a joint hearing on companion bills - SB 279, introduced by Senator Pat Kreitlow (D-Chippewa Falls) and AB 408, introduced by Rep. Scott Suder (R-Abbotsford) - dealing with domestic biofuels.

The bills are the result of recommendations produced by the Joint Legislative Council Special Committee on Domestic Biofuels. The general purpose of the legislation is to promote domestic biofuels, and in particular, biofuels produced in Wisconsin.

While most of provisions in the bills are not controversial, two provisions garnered opposition from business groups. In particular, oil companies have concerns with a provision forcing refiners to offer gasoline free of ethanol so that dealers can blend the ethanol themselves. Oil companies argue that the blending of ethanol, which is required by federal law, should be done by refiners to ensure quality. Oil companies further argue that dealers may not have the technology to properly blend ethanol with gasoline, which could in turn lead to engine problems. In such circumstances the oil companies could be held liable even though they did not perform the blending.

In addition, the oil companies argue that on one hand the federal government mandates the amount of renewable fuel they are required to produce, and yet on the other hand Wisconsin would make it harder for them to meet this standard by forcing them to provide unblended fuel.

Another provision that raised concerns is the creation of annual sales goals for renewable fuels in Wisconsin equaling 110 percent of the state’s share of renewable fuel sales required nationally under the federal renewable fuel standard. Corn growers, who support the measure, argue that implementing such a standard is positive for Wisconsin corn growers and means less money going towards buying oil in foreign countries.

The Wisconsin Manufacturers & Commerce testified in opposition to the bill. WMC argued that the bill could lead to an extremely high ethanol mandate, which in turn would increase prices for consumers. In addition, WMC argued that the state’s fuel policy making should not be handed over to bureaucrats within the Department of Agriculture, Trade and Consumer Protection.

Under the plan, industrial facilities, refiners, and power plants that emit at least 25,000 tons of GHGs a year would be required to obtain construction and operating permits. The permits would require the operator to demonstrate the use of best available control technologies and energy efficiency measures to minimize GHG emissions when facilities are constructed or significantly modified.

Business groups are extremely concerned about the EPA regulating GHG emissions under the Clean Air Act because that law limits the agency’s authority to take into consideration the costs of new regulations.

For more information from the EPA, see its Fact Sheet and Proposed Rule. Also see articles in the Wall Street Journal and NY Times  for more information.

Two U.S. Senators that head the Committee on Environment and Public Works today are introducing climate change legislation. Based on early reports, the bill authored by Senators Barbara Boxer (D-California) and John Kerry (D-Mass.), will call for greater reductions of greenhouse gas (GHG) emissions than the House version, which narrowly passed in June.

The House bill calls for a 17 percent reduction of GHG emissions below 2005 levels by 2020. The Senate version reportedly imposes a 20 percent reduction by 2020. Unlike the House version, the Senate bill will also preserve the authority of the Environmental Protection Agency to use the Clean Air Act to regulate greenhouse gases. Unlike the House version, the Senate bill does not stipulate how the carbon permits will be allocatted, essentially punting on the most contentious issue until hearings begin. The Senate version also will include provisions to fund training of workers in the nuclear industry and provides some funding for development of clean coal technology.

Senator Boxer’s office has indicated that the legislation’s remaining details will be fleshed out in upcoming committee hearings, with the expectation of passing the bill out of committee by the end of October. The prospect of a climate change bill passing the full Senate this year, however, is looking less and less likely. The health care legislation is consuming almost all of Washington’s time and attention, leaving little time for the Senate to address climate change. Senate Majority Leader Harry Reid (D-Nevada) has also publicly acknowledged that there might not be enough time or support to bring the bill for a vote before the full Senate by the end of the year.

This then raises the question of whether a bill can pass at all during the 111th Congress (which ends in Jan. 2012). Heading into an election year, it may be difficult for the Senate to cobble together enough votes to stave off a filibuster.

We will continue to provide updates on both the Senate and House climate change bills.