"Advanced Renewable Tariffs for Wisconsin: Analysis and Case Study" was prepared by the University of Wisconsin Madison Energy Analysis & Policy Certificate Capstone Project.
ART is a policy which aims to encourage customer-sited development of renewable energy. An ART is unique because a regular customer becomes the producer (who we will refer to as a Renewable Power Producer (RPP)), and the electric utility becomes the customer. This is different than net metering and a RPS; net metering is essentially running the kWh meter backwards-thus, the value for a kWh of renewable electricity is equal to the retail rate-while a RPS establishes a quantity obligation.
There are many ways to establish energy payments for an ART. The various methods are primarily based on:
- Generation cost, which provides a payment based on the cost of the technology
- Avoided cost, which sets the payment based on displacing fossil fuel-based generation
- Premium rates, which establish energy payment at a specified level above the retail rate for electricity
This analysis uses a generation cost approach-generation cost is the most common form and is consistent with the Governor‘s Task Force on Global Warming-to determine energy payments for each renewable technology.