The $50 incentives, approved this past week by the state Public Service Commission, would cost $5 million and are part of more than $60 million in utility customer funds that Gov. Scott Walker's administration wants to reallocate to expand broadband in rural areas of the state.
The broadband vouchers have come under criticism from energy-efficiency advocates as well as from the company that runs Wisconsin's Focus on Energy program, which helps utility customers save energy through discounts on LED light bulbs and energy-efficient appliances as well as other initiatives.
More than half of the money to be reallocated, $35 million, would come from reserves in the Universal Service Fund, through a bill Walker has asked the Legislature to pass in 2017 in order to expand state broadband grants. The remainder taps electric and natural gas ratepayers' funding from the Focus on Energy program's reserves.
The PSC on Thursday approved spending $16 million to send energy-efficiency kits to nearly 100,000 broadband customers. Of that, nearly $5 million from Focus on Energy funds would be used to fund the $50 broadband subsidies.
Focus on Energy is funded through a surcharge collected from Wisconsin electricity customers. On average, 1.1 million We Energies customers each pay $15 a year to fund the program.
PSC commissioners say the broadband voucher initiative is important to help deliver more programs in rural parts of the state where customers have paid into the program but haven't received many services from Focus on Energy.
Elise Nelson, commission spokeswoman, said the vouchers are part of the broader kit that will be sent to rural homes, including a variety of energy-saving home devices from smart power strips to LED light bulbs to rebates for smart thermostats.
"The vouchers go hand in hand" with the energy-saving devices to be provided in the kits, she said. "We’ve got to keep up with technology, and this is the new forefront of energy efficiency in the home.”
Critics aren't buying it.
"The Public Service Commission continues to try to fit a square peg in a round hole by using Focus on Energy to subsidize rural internet service companies," said Andy Olsen, who works in the Madison office of the Environmental Law and Policy Center. "Using Focus to fund internet subscriptions only helps people who already have broadband access. It doesn’t increase access to those who could most benefit."
Keith Reopelle, senior policy director at Clean Wisconsin, said it's hard to fathom how discounts on broadband equipment and internet bills would yield energy savings.
The commissioners' decision Thursday "raised more questions than they answered," he said.
Reopelle said the broadband voucher and other actions by the commission represent a "bizarre departure" from their typical approach to Focus on Energy, and a return to past actions that spent ratepayer dollars on non-energy items.
Past non-energy spending from utility ratepayers' bills included $18.3 million spent to pay assistant district attorneys around the state, plus millions spent on the Wisconsin Works program and municipal aid payments. In total, nearly $166 million in money collected from electric ratepayers was spent on non-energy items under the administrations of Republican Gov. Scott McCallum and Democratic Gov. Jim Doyle.
Chicago Bridge & Iron, the administrator of the Focus on Energy program since 2011, has voiced concerns similar to those of the critics who reacted after Thursday's vote.
In a memo to the Public Service Commission, CB&I said it was "prepared to develop and execute this subsidy payment to these broadband customers, but since this cost is not related to an energy efficiency measure, CB&I would like to express reservations with the policy of providing a direct subsidy to broadband customers, funded by Wisconsin's electric and gas ratepayers, unless those payments result in energy savings."
Commissioners Ellen Nowak and Mike Huebsch said CB&I's concerns were misplaced, and Huebsch said the commission should scrutinize the contractor's work closely given its reservations about the rural initiative.
"I question whether or not this contractor is willing to administer a program that they no longer agree with," Huebsch said.
Nowak and Huebsch noted that the funding linked to broadband would not be used for broadband infrastructure.
"We're not talking about fiber in the ground. This is about the nexus between broadband and energy that's been recognized by the Federal Communications Commission," Nowak said. "This is about realizing the increased investment that broadband spurs, including devices for energy management."
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