AB389: Bill Text

AB389, s. 20 Section 20. 196.025 (4) of the statutes is created to read:

AB389,26,7 196.025 (4) (a) In consultation with the department of administration and the department of revenue, the commission shall study the establishment of a program for providing incentives for the development of high-efficiency, small-scale electric generating facilities in this state that do either of the following:

AB389,26,9 1. Provide benefits in the form of support for electric distribution or transmission systems, power quality or environmental performance.

AB389,26,12 2. Employ technologies such as combined heat and power systems, fuel cells, mircroturbines or photovoltalic systems that may be situated in, on or next to buildings or other electric load centers.

AB389,26,16 (b) No later than January 1, 2001, the commission shall submit a report of its findings and recommendations under par. (a) to the chief clerk of each house of the legislature for distribution to the appropriate standing committees under s. 13.172 (3).

AB389, s. 21 Section 21. 196.025 (5) of the statutes is created to read:

AB389,26,23 196.025 (5) (a) The commission shall contract with an expert consultant in economics to conduct a study on the potential for horizontal market power, including the horizontal market power of electric generators, to frustrate the creation of an effectively competitive retail electricity market in this state and to make recommendations on measures to eliminate such market power on a sustainable basis. The study shall include each of the following:

AB389,26,25 1. An assessment of the effect of each recommendation on public utility workers and shareholders and on rates for each class of public utility customers.

AB389,27,2 2. An evaluation of the impact of transmission constraints on the market power of electric generators in local areas.

AB389,27,5 (b) No later than January 1, 2001, the commission shall submit a report of the results of the study under par. (a) to the chief clerk of each house of the legislature for distribution to the appropriate standing committees under s. 13.172 (3).

AB389, s. 22 Section 22. 196.192 of the statutes is created to read:

AB389,27,9 196.192 Market-based compensation, rates and contracts. (1) In this section, "electric public utility" means a public utility whose purpose is the generation, distribution and sale of electric energy.

AB389,27,11 (2) No later than March 1, 2000, each investor-owned electric public utility shall do each of the following:

AB389,27,14 (a) File with the commission rates that result in customers receiving market-based compensation for voluntary interruptions of firm load during peak periods of electric use.

AB389,27,18 (b) File with the commission market-based pricing options and options for individual contracts that allow a retail customer, through service from its existing public utility, to receive market benefits and subject itself to market risks for the customer's purchases of capacity or energy.

AB389,27,23 (3) (a) The commission shall approve market-based rates that are consistent with the options specified in sub. (2), except that the commission may not approve a market-based rate unless the commission determines that the rate will not harm shareholders of the investor-owned electric public utility or customers who are not subject to the rate.

AB389,28,3 (b) Nothing in s. 196.20, 196.21, 196.22, 196.37, 196.60 or 196.604 prohibits the commission from approving a filing under sub. (2) or approving market-based rates under par. (a).

AB389,28,7 (4) Subject to any approval of the commission that is necessary, an electric public utility that is not an investor-owned electric public utility may implement market-based rates approved under sub. (3) (a) or implement the options in filings under sub. (2) that are approved by the commission.

AB389, s. 23 Section 23. 196.31 (1) (intro.) of the statutes is amended to read:

AB389,28,12 196.31 (1) (intro.) In any proceeding before the commission, the commission may shall compensate any participant in the proceeding who is not a public utility, for some or all of the reasonable costs of participation in the proceeding if the commission finds that:

AB389, s. 24 Section 24. 196.31 (1) (a) of the statutes is amended to read:

AB389,28,17 196.31 (1) (a) The participation is necessary to provide for the record an adequate presentation of a significant position in which the participant has a substantial interest, and that an adequate presentation would not be possible occur without a grant of compensation; or

AB389, s. 25 Section 25. 196.374 of the statutes is repealed and recreated to read:

AB389,28,20 196.374 Low-income assistance, energy efficiency and other programs. (1) In this section:

AB389,28,21 (a) "Department" means the department of administration.

AB389,28,22 (b) "Fund" means the utility public benefits fund.

AB389,29,2 (c) "Utility" means a Class A gas or electric utility, as defined by the commission, but does not include a municipal utility, as defined in s. 16.957 (1) (q), a municipal electric company, as defined in s. 66.073 (3) (d), or a cooperative association organized under ch. 185.

AB389,29,6 (2) The commission shall determine the amount that each utility spent in 1998 on programs for low-income assistance, including writing off uncollectibles and arrearages, low-income weatherization, energy conservation and efficiency, environmental research and development, and renewable resources.

AB389,29,16 (3) In 1999, 2000 and 2001, the commission shall require each utility to spend a decreasing portion of the amount determined under sub. (2) on programs specified in sub. (2) and contribute the remaining portion of the amount to the commission for deposit in the fund. In each year after 2001, each utility shall contribute the entire amount determined under sub. (2) to the commission for deposit in the fund. The commission shall ensure in rate-making orders that a utility recovers from its ratepayers the amounts spent on programs or contributed to the fund under this subsection. The commission shall allow each utility the option of continuing to use, until January 1, 2001, the moneys that it has recovered under s. 196.374 (3), 1997 stats., to administer the programs that it has funded under s. 196.374 (1), 1997 stats.

AB389,29,19 The commission may allow each utility to spend additional moneys on the programs specified in sub. (2) if the utility otherwise complies with the requirements of this section and s. 16.957 (4).

AB389,29,24 (4) If the department notifies the commission under s. 16.957 (2) (b) 2. that the department has reduced funding for energy conservation and efficiency and renewable resource programs, the commission shall reduce the amount that a utility is required to spend on programs or contribute to the fund under sub. (3) by the percentage by which the department has reduced the funding.

AB389, s. 26 Section 26. 196.378 of the statutes is created to read:

AB389,30,1 196.378 Renewable resources. (1) Definitions. In this section:

AB389,30,7 (a) "Biomass" means a resource that derives energy from wood or plant material or residue, biological waste, crops grown for use as a resource or landfill gases. "Biomass" does not include garbage, as defined in s. 289.01 (9), or nonvegetation-based industrial, commercial or household waste, except that "biomass" includes refuse-derived fuel used for a renewable facility that was in service in this state before January 1, 1998.

AB389,30,9 (b) "Conventional resource" means a resource that derives energy from coal, oil, nuclear power or natural gas, except for natural gas used in a fuel cell.

AB389,30,10 (bm) "Department" means the department of administration.

AB389,30,11 (c) "Electric provider" means an electric utility or retail electric cooperative.

AB389,30,15 (d) "Electric utility" means a public utility that sells electricity at retail. For purposes of this paragraph, a public utility is not considered to sell electricity at retail solely on the basis of its ownership or operation of a retail electric distribution system.

AB389,30,20 (e) "Excludable renewable capacity" means the portion of an electric provider's total renewable capacity that is supplied from renewable facilities that were placed in service before January 1, 1998, and that, before January 1, 1998, derived electricity from hydroelectric power, even if the output of the renewable facilities is used to satisfy requirements under federal law.

AB389,31,2 (f) "Nonsystem renewable energy" means the amount of electricity that an electric provider sells to its retail customers or members and that is supplied or allocated under executed wholesale purchase contracts from renewable facilities that are not owned or operated by the electric provider. "Nonsystem renewable energy" does not include any electricity that is not used to satisfy the electric provider's retail load obligations.

AB389,31,8 (g) "Renewable facility" means an installed and operational electric generating facility in which energy is derived from a renewable resource. "Renewable facility" includes a facility the installation or operation of which is required under federal law, but does not include a facility the installation or operation of which is required under the laws of another state even if the installation or operation of the facility is also required under federal law.

AB389,31,9 (h) "Renewable resource" means any of the following:

AB389,31,10 1. A resource that derives electricity from any of the following:

AB389,31,11 a. A fuel cell that uses, as determined by the commission, a renewable fuel.

AB389,31,12 b. Tidal or wave action.

AB389,31,13 c. Solar thermal electric or photovoltaic energy.

AB389,31,14 d. Wind power.

AB389,31,15 e. Geothermal technology.

AB389,31,16 g. Biomass.

AB389,31,18 1m. A resource with a capacity of less than 60 megawatts that derives electricity from hydroelectric power.

AB389,31,20 2. Any other resource, except a conventional resource, that the commission designates as a renewable resource in rules promulgated under sub. (4).

AB389,31,22 (i) "Renewable resource credit" means a credit calculated in accordance with rules promulgated under sub. (3) (a).

AB389,31,23 (j) "Resource" means a source of electric power generation.

AB389,32,3 (k) "Retail electric cooperative" means a cooperative association organized under ch. 185 that sells electricity at retail to its members only. For purposes of this paragraph, a cooperative association is not considered to sell electricity at retail solely on the basis of its ownership or operation of a retail electric distribution system.

AB389,32,6 (n) "System renewable energy" means the amount of electricity that an electric provider sells to its retail customers or members and that is supplied by renewable facilities owned or operated by the electric provider.

AB389,32,8 (o) "Total renewable energy" means the sum of an electric provider's system and nonsystem renewable energy.

AB389,32,12 (2) Renewable resource energy. (a) Each electric provider shall provide to its retail electric customers or members total renewable energy in at least the following percentages of its total retail energy sales, either directly or through renewable resource credits from another electric provider:

AB389,32,13 1. By December 31, 2000, 0.5%.

AB389,32,14 2. By December 31, 2002, 0.85%.

AB389,32,15 3. By December 31, 2004, 1.2%.

AB389,32,16 4. By December 31, 2006, 1.55%.

AB389,32,17 5. By December 31, 2008, 1.9%.

AB389,32,18 6. By December 31, 2010, 2.2%.

AB389,32,19 (b) For purposes of determining compliance with par. (a):

AB389,32,21 1. Total retail energy sales shall be calculated on the basis of an average of an electric provider's retail energy sales in this state during the prior 3 years.

AB389,33,2 2. The amount of electricity supplied by a renewable facility in which biomass and conventional fuels are fired together shall be equal to the product of the maximum amount of electricity that the facility is capable of generating and the ratio of the British thermal unit content of the biomass fuels to the British thermal unit content of both the biomass and conventional resource fuels.

AB389,33,5 3. Any excludable renewable energy that exceeds 0.6% of an electric provider's total retail energy sales shall be excluded from the electric provider's total renewable energy.

AB389,33,11 (c) No later than April 15 annually, an electric provider shall submit a report to the department that describes the electric provider's compliance with par. (a). Reports under this paragraph may include certifications from wholesale suppliers regarding the sources and amounts of energy supplied to an electric provider. The department may specify the documentation that is required to be included with reports submitted under this paragraph.

AB389,33,16 (d) The commission shall allow an electric utility to recover from ratepayers the cost of providing total renewable energy to its retail customers or members in amounts that equal or exceed the percentages specified in par. (a). Subject to any approval of the commission that is necessary, an electric utility may recover costs under this paragraph by any of the following methods:

AB389,33,18 1. Allocating the costs equally to all customers or members on a kilowatt-hour basis.

AB389,33,20 2. Establishing alternative price structures, including price structures under which customers or members pay a premium for renewable energy.

AB389,33,21 3. Any combination of the methods specified in subds. 1. and 2.

AB389,33,22 (e) 1. This subsection does not apply to any of the following:

AB389,33,24 a. An electric provider that provides more than 10% of its summer peak demand in this state from renewable facilities.

AB389,34,2 b. An electric provider that provides more than 10% of its summer peak demand from renewable resources.

AB389,34,5 2. For purposes of calculating the percentages under subd. 1., an electric provider may include renewable facilities located in this or another state and renewable facilities located on its or another electric provider's system.

AB389,34,9 3. Notwithstanding subd. 1., this subsection applies to an electric provider unless the electric provider provides documentation to the commission that establishes, to the satisfaction of the commission, that the electric provider satisfies the requirements under subd. 1. a. or b.

AB389,34,18 (3) Renewable resource credits. (a) An electric provider that provides total renewable energy to its retail electric customers or members in excess of the percentages specified in sub. (2) (a) 1. to 6. may, in the applicable year, sell to any other electric provider a renewable resource credit or a portion of a renewable resource credit at any negotiated price. Alternatively, an electric provider may use a renewable resource credit or portion of a renewable resource credit in a subsequent year to establish compliance with sub. (2) (a). The commission shall promulgate rules that establish requirements for calculating the amount of a renewable resource credit.

AB389,34,20 (b) The commission may promulgate rules that establish requirements and procedures for a sale under par. (a).

AB389,34,23 (4) Rules. The commission may promulgate rules that designate a resource, except for a conventional resource, as a renewable resource in addition to the resources specified in sub. (1) (g) 1. and 1m.

AB389,35,5 (5) Penalty. Any person who violates sub. (2) or any wholesale supplier who provides an electric provider with a false or misleading certification regarding the sources or amounts of energy supplied to the electric provider shall forfeit not less than $5,000 nor more than $500,000. Forfeitures under this subsection shall be enforced by action on behalf of the state by the attorney general. A court imposing a forfeiture under this subsection shall consider all of the following in determining the amount of the forfeiture:

AB389,35,7 (a) The appropriateness of the forfeiture to the person's or wholesale supplier's volume of business.

AB389,35,8 (b) The gravity of the violation.

AB389,35,10 (c) Whether a violation of sub. (2) is due to circumstances beyond the violator's control.

AB389, s. 27 Section 27. 196.485 (title) of the statutes is repealed and recreated to read:

AB389,35,12 196.485 (title) Transmission system requirements.

AB389, s. 28 Section 28. 196.485 (1) (am) of the statutes is created to read:

AB389,35,16 196.485 (1) (am) "Contribute a transmission facility" means to divest a person's interest in the transmission facility and to transfer ownership of the transmission facility and associated deferred tax reserves to another person.

AB389, s. 29 Section 29. 196.485 (1) (be) of the statutes is created to read: