Friends of Responsible Energy-Madison
202 N Spooner St
Madison, WI 53726
(608) 441-5670
Governor James Doyle

Office of the Governor
115 East State Capitol
Madison, WI 53702

May 2, 2003

Dear Governor Doyle,

Thank you for extending the evaluation period for the comparison of UW-Madison utility options. Postponing the decision on whether to proceed because of MGE’s inside access and pressure on the state’s independent consultant Sebesta Blomberg demonstrated your strong commitment to clean government. That the origins of the MGE plan are colored by suspicious political contributions and conflicts of interest during previous administrations was all the more reason for an open airing of the proposal.

The basic facts support our view that there are better alternatives than UW/MGE’s proposed 150-MW plant. That facility would be a massive industrial structure that Madison will have to live with and state taxpayers will have to support for generations. Its scale limits future expansion on the site and it is far more costly than a 45-MW alternative analyzed by Sebesta. It is also less efficient than thermally balanced cogeneration plants capable of efficiencies of 80 to 90 percent. Efficient power plants, like efficient cars, are the foundation for both cost savings and lower environmental impact.

Two state-hired consultants have recommended 45-MW cogeneration plants. Unlike MGE, neither has a vested interest in the results of the analysis. The Sebesta report shows that MGE’s 150-MW plan would cost $212 million more than a UW-owned 45-MW cogeneration plant.

At a time when state workers are being laid off and UW tuition fees are rising, it is difficult to justify wasting $200 million.

MGE persists in its quest to unduly revise Sebesta's numbers.  If anything, Sebesta's  capital cost estimate for the 45MW cogeneration plant are conservative.  UW's data shows that a number of universities have built cogeneration facilities for less than 60% of that estimate on a dollar per megawatt basis.

We expect the price of steam to VA and state hospitals, dormitories, and other facilities to increase under the MGE scenario and decrease under the 45-MW scenario. Although our request for the breakdown of these prices was denied, the UW Nelson Institute students' calculations corroborate our expectation. Their findings -- that MGE is marking up steam by 63 to 90 percent -- remain unchallenged, despite Chancellor Wiley's attempt to discredit the students.

Contrary to MGE's assertions, and consistent with common sense, environmental factors favor a smaller plant too. The 150-MW plant consumes 143% more water and has larger, louder turbines. A base-loaded 45-MW facility, burning natural gas, will reduce operations and emissions from UW's and MGE's coal plants elsewhere in the city.

Moreover the 45-MW plan is an ideal size for one of the best emissions control technologies, so-called SCONOx, which produces virtually none of the PM2.5 emissions that threaten children's health. MGE admits that SCONOx is not feasible for its turbines because it is unproven on units similar in size to [its] units.

We support your objective of achieving long term utility planning to get the best solutions for Wisconsin. The latest consultant report recognizes that in view of current building plans previous UW growth projections were overestimates. Additional steam will not be needed as soon as had been anticipated just a few months ago. Therefore a complete solution is not necessary in the present budget cycle.

As MGE's customers, we support its need to plan for future growth. However MGE's PSC filings demonstrate the sky is not falling, its reserve is more than adequate, and on a percentage basis, it imports less electricity into its service area than any number of other utilities.

We are disappointed that the current analysis did not expand beyond the original options. Incremental approaches -- expanding utility capacity as campus needs grow -- or Professor Ken Ragland's economical and environmentally friendly proposals for smaller, thermally balanced designs, all deserve a closer look. Since Sebesta has affirmed that the 45-MW plant is only a hypothetical construct, its design could presumably be refined to even better match campus needs. How many more millions of dollars would be saved with an optimal design?  Unfortunately that's beyond the scope of what a citizens' group can do.

Top-notch universities across the country have used cogeneration to save money, not waste it.  Better options for the Madison campus, unburdened by a relationship with MGE, will save the state over $200 million.

When all the facts are considered, we hope you too will agree that we can and should do better. Thank you for renewing our faith in fair and open government.

Sincerely,

Executive Committee of Friends of Responsible Energy

David DeWitt, Irene Golembiewski, Joan Knoebel, Chamond Liu, Ron Rosner

Cc:

Secretary Marc Marotta

Senator Fred Risser

Representative Spencer Black