Rule-Making Notices (Hearing Notices)

Brief summary of rule

The purpose of the rulemaking is to amend chs. PSC 112, 133, and 184 of the Wisconsin Administrative Code relating to the requirement to obtain a certificate or approval prior to beginning a proposed project, to conform with the statutory changes in s. 196.49 (5g), Stats., made by 2011 Wisconsin Act 155. This is accomplished by referencing where the revised cost thresholds for certification or approval may be found.

Furthermore, this rulemaking amends ch. PSC 118, relating to displacement facilities, to conform with the statutory changes made in s. 196.378 (3) (a) 1m., Stats., by 2013 Wisconsin Act 300. This is accomplished in the following ways: (1) strike the requirement that a displacement facility be placed in service on or after June 3, 2010, to be consistent with the statute; and (2) revise the reference to “in the entire area served by the Midcontinent Independent System Operator" as a basis for the displacement percentage to streamline the process for determining the displacement percentage.

Comparison with existing or proposed federal legislation

The commission is not aware of any existing or proposed federal legislation concerning the matters addressed in this rulemaking.

Comparison with similar rules in surrounding states

The commission is not aware of any surrounding states that limit what facilities may be used to recreate renewable energy credits by the date on which the facilities went into service. The commission is not aware of any surrounding states that determine whether certification or approval is necessary by the cost of the project.

Effect on Small Business

This rule will not affect small businesses. The s. 227.114 (12), Stats., definition of “small business" states that to be considered a small business, the business must not be dominant in its field. Since electric, gas, and water utilities are monopolies in their service territories, they are dominant in their fields and, so, are not small businesses.

Comments

Comments on this rule may be submitted as outlined in the Notice of Hearing.

Accommodation

The commission does not discriminate on the basis of disability in the provision of programs, services, or employment. Any person with a disability who needs accommodations to participate in this proceeding or who needs to obtain this document in a different format should contact the docket coordinator listed below.

Agency Contact People

Questions regarding this rule should be directed to docket coordinator Andrew Kell, at [phone] or [e-mail]. Small business questions should be directed to Christina Keeley at [phone] or [e-mail]. Media questions should be directed to the Communications Director at [phone]. Hearing or speech-impaired individuals may also use the commission's TTY number; if calling from Wisconsin, [phone]; if calling from outside Wisconsin [phone].

Initial Regulatory Flexibility Analysis

This rule will not affect small businesses. The s. 227.114 (12), Stats., definition of “small business" states that to be considered a small business, the business must not be dominant in its field. Since gas, electric, and water utilities are monopolies in their service territories, they are dominant in their fields, and so, are not small businesses.

Fiscal Estimate

This rulemaking should have either no or minimal economic impact.

Wisconsin Environmental Policy Act

This is a Type III action under Wis. Admin. Code s. PSC 4.10 (3). The Commission will review the potential environmental effects of the project. Type III actions normally do not require the preparation of an environmental impact statement under Wis. Stat. s. 1.11 or an environmental Assessment.

Text of Proposed Rule

SECTION 1. PSC 112.05 (3) (a) (intro.) is amended to read:

PSC 112.05 (3) (a) (intro.) Cost thresholds for projects requiring commission review and approval under this section are as follows: those established under par. (b).

SECTION 2. PSC 112.05 (3) (a) 1. to 3. are repealed.

SECTION 3. PSC 112.05 (3) (b) is amended to read:

PSC 112.05 (3) (b) Beginning in calendar year 2000, and on May 1 on May 1, 2014, and on May 1 of each successive even-numbered year thereafter, the commission shall adjust the estimated gross cost thresholds in par. (a) s. 196.49 (5g) (a), Stats., to account for inflation in reflect changes to the cost of electric utility construction. The adjustment shall be based on the cost index numbers published in the "Handy-Whitman Index of Public Utility Construction Costs, Cost Trends of Electric Utility Construction - North Central Region for Total Transmission Plant" (Handy-Whitman Index). The commission shall make the adjustment calculation by multiplying each gross cost threshold in par. (a) by the ratio of the Handy Whitman Index number on January 1 of the most recent even-numbered year (numerator) to the Handy Whitman Index number on January 1, 1998 (denominator). The commission shall notify all electric utilities of the resulting adjusted cost limits by May 15 of each even-numbered year. If the referenced Handy-Whitman Index is no longer available, an equivalent successor index may be used which is generally recognized by the electric industry and acceptable to the commission.

SECTION 4. PSC 112.05 (3) (c) and (c) note are created to read:

PSC 112.05 (3) (c) The commission shall notify all electric utilities of the resulting adjusted cost limits by May 15 of each even-numbered year and shall publicize the adjusted cost limits on the commission's website. If the Handy-Whitman Index is no longer available, an equivalent successor index may be used which is generally recognized by the electric industry and acceptable to the commission.

Note: The commission maintains or has access to the Handy-Whitman Index of Public Utility Construction Costs and this reference or a copy may be reviewed by contacting the commission's offices.

SECTION 5. PSC 118.02 (17) is amended to read:

PSC 118.02 (17) “Tracking system account" means the account that the program administrator maintains in order to track the creation, sale, transfer, purchase, and retirement of a renewable energy certificate or a an RRC by a renewable energy tracking system participant.

SECTION 6. PSC 118.03 (1) (intro.) and 118.03 (2) (intro.) are amended to read:

PSC 118.03 (1) (intro.) An electric provider may use the output of a renewable facility to meet a minimum percentage requirement under s. 196.378 (2) (a), Stats., or to create a an RRC for renewable energy only if the renewable facility that is the source of the electric provider's renewable energy meets all of the following requirements:

PSC 118.03 (2) (intro.) An electric provider or customer or member of an electric provider may create a an RRC for conventional electricity displaced by the use of a displacement facility only if the displacement facility meets all of the following requirements:

SECTION 7. PSC 118.03 (2) (b) is repealed.

SECTION 8. PSC 118.03 (4) (b) (intro.) and 118.03 (5) are amended to read:

PSC 118.03 (4) (b) (intro.) An electric provider may use the production of a facility that satisfies par. (a) to meet a minimum percentage requirement under s. 196.378 (2) (a), Stats., or to create a an RRC if the electric provider demonstrates all of the following:

PSC 118.03 (5) A customer or member of an electric provider may create a an RRC in the manner described in sub. (4).

SECTION 9. PSC 118.04 (1) is amended to read:

PSC 118.04 (1) A renewable energy certificate or a an RRC is used to meet an electric provider's minimum percentage requirement under s. 196.378 (2) (a), Stats., in the compliance period for which the electric provider retires the renewable energy certificate or RRC, regardless of the date on which the renewable energy certificate or RRC is retired in the renewable energy tracking system.

SECTION 10. PSC 118.09 (1) is renumbered 118.09 (1m) and amended to read:

PSC 118.09 (1m) For each calendar year, the commission shall, by order, determine the percentage of electricity from conventional resources for the entire state for purposes of calculating the amount of a RRC RRCs to be created for displaced conventional electricity. The commission shall base this determination on the annual average mix of resources used to generate electricity in the entire area served by the Midcontinent Independent System Operator equation of 100% minus the total statewide renewable energy percentage, as calculated using renewable energy information submitted to the commission by electric providers in their most recent renewable portfolio standard compliance reports. The commission may, by order, also establish a different percentage for a specific type of displacement facility if its seasonal or daily operating characteristics justify a percentage that differs from the annual average percentage.

SECTION 11. PSC 118.09 (1) is created to read:

PSC 118.09 Calculation of displaced conventional electricity. (1) For purposes of this section, “Total statewide renewable energy percentage" means the percentage that results from the following calculation:

(a) The actual renewable generation that serves Wisconsin retail customers within a given year as part of any of the following:

1. Wisconsin electric provider renewable portfolio standard requirements.

2. Any other federal or state renewable energy requirements that apply to Wisconsin electric providers.

3. Wisconsin electric provider voluntary renewable energy programs.

(b) Divided by the total sales of electricity to Wisconsin retail customers in that same year.

SECTION 12. PSC 133.03 (1) (e) is renumbered 133.03 (1) (e) 1. and amended to read:

PSC 133.03 (1) (e) 1. A single gas pipeline project and associated plant, or any plant or addition to plant the cost of which exceeds $1,500,000 or 4% of the utility's gross gas operating revenue received during the previous calendar year, whichever is less the cost threshold established under subd. 2., except for any of the following:

SECTION 13. PSC 133.03 (1) (e) 1. to 3. are renumbered 133.03 (1) (a) to (c).

SECTION 14. PSC 133.03 (1) (e) 2., 3. and 3. (note) are created to read:

PSC 133.03 (1) (e) 2. Beginning on May 1, 2014, and on May 1 of each successive even-numbered year thereafter, the commission shall adjust the cost thresholds in s. 196.49 (5g) (a), Stats., to reflect changes to the cost of gas utility construction based on the applicable industry cost index numbers published in the "Handy-Whitman Index of Public Utility Construction Costs."

3. The commission shall notify all gas utilities of the resulting adjusted cost limits by May 15 of each even-numbered year and shall publicize the adjusted cost limits on the commission's website. If the Handy-Whitman Index is no longer available, an equivalent successor index may be used which is generally recognized by the gas industry and acceptable to the commission.

Note: The commission maintains or has access to the Handy-Whitman Index of Public Utility Construction Costs and this reference or a copy may be reviewed by contacting the commission's offices.

SECTION 15. PSC 184.03 (3) is renumbered 184.03 (a) and amended to read:

PSC 184.03 (3) Construction of facilities. (a) A utility shall obtain a certificate from the commission before constructing, purchasing, installing, modifying, replacing, or placing in operation any plant not exempt under sub. (4) if the project cost exceeds $250,000 or 25percent of the utility's gross water or sewer operating revenue received during the previous calendar year, whichever is less, or exceeds the cost threshold established under s. 196.49 (5g) (b), Stats. the cost threshold established under par. (b).

SECTION 16. PSC 184.03 (3) (b), (c) and (c) (note) are created to read:

PSC 184.03 (3) (b) Beginning on May 1, 2014, and on May 1 of each successive even-numbered year thereafter, the commission shall adjust the cost thresholds in s. 196.49 (5g) (a), Stats., to reflect changes to the cost of water utility construction based on the applicable industry cost index numbers published in the "Handy-Whitman Index of Public Utility Construction Costs."

(c) The commission shall notify all water utilities of the resulting adjusted cost limits by May 15 of each even-numbered year and shall publicize the adjusted cost limits on the commission's website. If the Handy-Whitman Index is no longer available, an equivalent successor index may be used which is generally recognized by the water industry and acceptable to the commission.

Note: The commission maintains or has access to the Handy-Whitman Index of Public Utility Construction Costs and this reference or a copy may be reviewed by contacting the commission's offices.

SECTION 17. This rule shall take effect on the first day of the month following publication in the Wisconsin administrative register as provided in s. 227.22 (2) (intro.), Stats.

STATE OF WISCONSIN DEPARTMENT OF ADMINISTRATION DOA-2049 (R03/2012)	Division of Executive Budget and Finance 101 East Wilson Street, 10th Floor P.O. Box 7864 Madison, WI 53707-7864 FAX: [phone]
ADMINISTRATIVE RULES Fiscal Estimate & Economic Impact Analysis

1. Type of Estimate and Analysis
X Original   ⍽ Updated   ⍽ Corrected
2. Administrative Rule Chapter, Title and Number
Chapters PSC 112, PSC 118, PSC 133, and PSC 184
3. Subject
This rulemaking addresses two different areas: cost thresholds for needing to obtain a certificate or approval prior to beginning a proposed project, and displacement facilities. The cost thresholds will be updated, the requirement that a displacement facility be placed in service on or after June 3, 2010 will be stricken and the reference to the Midcontinent Independent System Operator as a basis for the displacement percentage will be revised to streamline the process for determining the displacement percentage
4. Fund Sources Affected			5. Chapter 20, Stats. Appropriations Affected
⍽ GPR   ⍽ FED   ⍽ PRO   ⍽ PRS   ⍽ SEG   ⍽ SEG-S
6. Fiscal Effect of Implementing the Rule
X No Fiscal Effect ⍽ Indeterminate	⍽ Increase Existing Revenues ⍽ Decrease Existing Revenues		⍽ Increase Costs ⍽ Could Absorb Within Agency's Budget ⍽ Decrease Cost
7. The Rule Will Impact the Following (Check All That Apply)
⍽ State's Economy ⍽ Local Government Units		⍽ Specific Businesses/Sectors ⍽ Public Utility Rate Payers ⍽ Small Businesses (if checked, complete Attachment A)
8. Would Implementation and Compliance Costs Be Greater Than $20 million? ⍽ Yes   X No
9. Policy Problem Addressed by the Rule
The rule making amends relevant sections of chs. PSC 112, PSC 133, and PSC 184 to conform with 2011 Wisconsin Act 155, and amends relevant sections of PSC 118 to conform with 2013 Wisconsin Act 300. Finally, getting data from the Midcontinent Independent System Operator has turned out to be time-consuming and less detailed than necessary.
10. Summary of the businesses, business sectors, associations representing business, local governmental units, and individuals that may be affected by the proposed rule that were contacted for comments.
All electric, gas and water utilities, Citizens' Utility Board, League of Wisconsin Municipalities, , Wisconsin Industrial Energy Group, Municipal Electric Utilities of Wisconsin, Wisconsin Towns Association, Wisconsin Counties Association, Wisconsin Utilities Association, Wisconsin Paper Council, Clean Wisconsin, RENEW Wisconsin.
11. Identify the local governmental units that participated in the development of this EIA.
League of Wisconsin Municipalities, Municipal Electric Utilities of Wisconsin, Wisconsin Towns Association, Wisconsin Counties Association.
12. Summary of Rule's Economic and Fiscal Impact on Specific Businesses, Business Sectors, Public Utility Rate Payers, Local Governmental Units and the State's Economy as a Whole (Include Implementation and Compliance Costs Expected to be Incurred)
None or minimal. Any economic impact occurred when the statutes were passed. This rulemaking just brings the rules into compliance.

13. Benefits of Implementing the Rule and Alternative(s) to Implementing the Rule
This will bring the rules into conformity with the statutes and will streamline the process for determining the percentage of electricity from conventional resources that has been displaced by renewable energy. This percentage is used to calculate the amount of renewable resource credits that may be created.
14. Long Range Implications of Implementing the Rule
Keeps the rules in conformity with the statutes. Less confusion. Faster determination of the displacement percentage used in renewable energy credit matters.
15. Compare With Approaches Being Used by Federal Government
The federal government does not have a similar program.
16. Compare With Approaches Being Used by Neighboring States (Illinois, Iowa, Michigan and Minnesota)
The commission is not aware of any surrounding states that limit what facilities may be used to recreate renewable energy credits by the date on which the facilities went into service or of any surrounding states that determine whether certification or approval is necessary by the cost of the project.
17. Contact Name	18. Contact Phone Number
Lisa Farrell	608-267-9086

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