The column below reflects the views of the author, and these opinions are neither endorsed nor supported by WisOpinion.com.
Across America, most states are looking to dramatically increase the amount of electricity they can produce. This growing demand for power is driven by the advent of data centers, artificial intelligence, and the fact that our society is becoming more plugged-in. States that can produce more electricity stand to benefit from economic expansion by attracting business investment and job growth, and Wisconsin is no exception.
One aspect of this scramble to create more energy is the need to build out and maintain the electric grid. The grid is a massive combination of critical infrastructure – everything from electric poles, power lines, transformers and substations. Linked together, the electric grid is what moves energy across the state and sends power to people’s homes, businesses, hospitals, schools and everyone else who requires electricity.
The question for lawmakers in Madison is who is going to build this critical electrical infrastructure? The answer to this question will determine how much the project ends up costing Wisconsin customers and how quickly the work gets done. Because utility customers in the state bear the costs of grid improvements and benefit from the build being done efficiently so the state can attract business investment, nearly everyone in Wisconsin should care about how lawmakers in the state capitol resolve this issue.
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Let me state this clearly: the most cost efficient and timely way to build this energy infrastructure is to allow Wisconsin’s regulated electric utilities the opportunity to do this critical work. This is because these utilities are specialists in building electric infrastructure in the state, have local employees and knowledge of how to get the work done, and have long-standing relationships with Wisconsin communities to ensure necessary permitting.
This is also why a local coalition of business, utilities and lawmakers are backing legislation to ensure that local electric utilities have what is known as a “right of first refusal” (ROFR) to own, build and operate this electric infrastructure. These groups believe that enabling ROFR for local utilities will save customers in Wisconsin about $1 billion dollars.
ROFR will save Wisconsin customers vast sums of money, because without the law permitting local utilities to build this infrastructure, not all of the project’s costs would be able to be spread across neighboring states in the region – which are connected to Wisconsin’s electric grid – only the incumbent utilities have this ability.
But if developers try to come in and take this infrastructure work from Wisconsin’s utilities, they will not be able to spread all of the costs to other states. Therefore, the same work will cost Wisconsin customers $1 billion dollars more for just the next two proposed projects alone. What’s ironic is that Wisconsin ratepayers are currently footing the bill for building out other state’s electrical grids, because many of those states have ROFR laws on their books.
It should also be noted that developers that want to build the electric grid in Wisconsin are promoting a campaign to do so under the guise of creating “competition” for the state’s regulated electric utilities. But if these outside corporations get the job, they will only make permitting take longer and any promised savings (even if delivered) won’t make up for the lost ability of the state’s electric companies to spread out those construction costs to other states. Again, Wisconsinites will have to pay $1 billion more to upgrade the electric grid under the guise of this so-called competition.
ROFR laws in Wisconsin are sensible for customers because the electric grid of the future will be built quicker and more affordably. With that in mind, I urge lawmakers in Madison to pass ROFR legislation.
– Quackenbush is president of JQ Resources LLC and served as Michigan Public Service Commission chairman from 2011 to 2016.
