This bill allows transmission utilities to transfer ownership of their
transmission facilities to a transmission company that satisfies certain
requirements, including the requirements to apply for approval to begin operations
no later than November 1, 2000. The bill requires the transmission utilities that
make such a transfer to enter into contracts with the transmission company to
provide operation and maintenance with respect to the transmission facilities for a
period of at least three years. A transmission utility that is a public utility affiliate
in a public utility holding company system must comply with these transfer
requirements in order for the system to qualify for the exception from the asset cap
that is described above.
The bill also provides that, after the transmission company begins operations,
a transmission utility or cooperative that has transferred ownership of its
transmission facilities to the transmission company no longer has a duty to provide
transmission services. Instead, the transmission company has the exclusive duty to
provide transmission service in a specified area of the state. The transmission
company's duty terminates when a certain independent system operator begins
operations. This independent system operator is a person that has received the
conditional approval of the federal energy regulatory commission to provide
transmission service in the midwest region of the United States.
Under the bill, after the independent system operator begins operations, it has
the exclusive duty to provide transmission service in a specified area of the state and
each public utility that provides transmission service in that area must transfer
operational control over its transmission facilities to the independent system
operator. In addition, as noted above, a public utility affiliate must make such a
transfer to qualify for the exception to the asset cap exception described above.
The bill imposes other requirements on the organization, formation and
operation of the transmission company.
Under current law, a utility company's property is exempt from the property tax
and the utility company pays a license fee that is based on a percentage of the
company's gross revenues. Under this bill, the transmission company's property is
also exempt from the property tax and the transmission company is required to pay
the license fee.
Employment requirements for acquired energy units
The bill imposes certain employment requirements on a person who acquires
an energy unit, which is defined as a business unit of a nonutility affiliate in a public
utility holding company system or a public utility or cooperative association in which
the business unit engages in certain energy-related activities. A person who
acquires an energy unit must offer employment to the energy unit's nonsupervisory
employes who are necessary for the operation and maintenance of the energy unit.
If a nonutility affiliate acquires an energy unit in the same holding company system,
the nonutility affiliate must offer employment to all of the energy unit's
nonsupervisory employes. A person or nonutility affiliate that is subject to the bill's

requirements must, during the 30-month period after the acquisition, offer
employment at wage rates that are no less than the wage rates in effect immediately
prior to the acquisition. In addition, during the same 30-month period, the terms
and conditions of employment, including fringe benefits, must be substantially
similar to the terms and conditions in effect immediately prior to the acquisition.
Approval of high-voltage transmission lines
Under current law, with certain exceptions, a person may not construct a
high-voltage transmission line, which is defined as a line that is designed for
operation at 100 kilovolts or more, unless the PSC issues a certificate of public
convenience and necessity (certificate) to the person. The PSC may not issue a
certificate unless it makes certain specified findings regarding the high-voltage
transmission line.
Under this bill, the PSC may not issue a certificate for a high-voltage
transmission line that is proposed to increase transmission capacity into this state
unless, in addition to the findings under current law, the PSC also makes specified
findings regarding the use of existing rights-of-way and the routing and design of
the line. In addition, the PSC may not issue a certificate for a high-voltage
transmission line that is designed for operation at 345 kilovolts or more unless the
PSC finds that certain benefits are reasonable in relation to the cost of the line.
The bill also imposes fees on persons who are issued certificates for
high-voltage transmission lines that are designed for operation at 345 kilovolts or
more. Such a person must pay an annual impact fee and a one-time environmental
impact fee. The fees are based on the cost of the high-voltage transmission line. The
fees must be paid to DOA, which is required to distribute the fees to counties, towns,
cities and villages through which the high-voltage transmission line is routed.
Other requirements
The bill imposes the following duties on the PSC:
1. Requires the PSC to promulgate rules for carrying out the PSC's duties under
current law regarding the consideration of environmental impact of certain actions.
2. Requires the PSC to promulgate rules requiring certain electric utilities and
cooperative associations to submit reports on their electric reliability status.
3. Requires the PSC to study and report to the legislature on the establishment
of a program for providing incentives for the development of certain high-efficiency,
small-scale electric generating facilities.
4. Requires the PSC to contract for a study and submit a report to the
legislature on the potential for horizontal market power of electric generators to
frustrate the creation of effectively competitive retail electric markets.
5. Requires the PSC to approve certain market-based rates, individual
contract options and market-based compensation for voluntary service
interruptions for certain customers of certain electric public utilities.
6. Requires the PSC to order a public utility affiliate or the transmission
company described above to make certain investments in its facilities if the PSC
determines that the public utility affiliate or transmission company is not making
investments that are sufficient to ensure reliable electric service.

The bill allows the governor, on behalf of the state, to enter into an interstate
compact on the need for and siting of regional electric transmission facilities. A
compact under the bill must include certain requirements, including a mechanism
for resolving transmission conflicts between states.
The bill prohibits DNR from establishing certain reductions in nitrogen oxide
emissions from electric generating facilities in specified counties.
This bill will be referred to the joint survey committee on tax exemptions for a
detailed analysis, which will be printed as an appendix to this bill.
For further information see the state and local fiscal estimate, which will be
printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB389, s. 1 1Section 1. 15.107 (17) of the statutes is created to read:
AB389,7,52 15.107 (17) Council on utility public benefits. There is created a council on
3utility public benefits that is attached to the department of administration under s.
415.03. The council shall consist of the following members appointed for 3-year
5terms:
AB389,7,66 (a) Two members appointed by the governor.
AB389,7,77 (b) Two members appointed by the senate majority leader.
AB389,7,88 (c) One member appointed by the senate minority leader.
AB389,7,99 (d) Two members appointed by the speaker of the assembly.
AB389,7,1010 (e) One member appointed by the assembly minority leader.
AB389,7,1111 (f) One member appointed by the secretary of natural resources.
AB389,7,1212 (g) One member appointed by the secretary of administration.
AB389,7,1313 (h) One member appointed by the chairperson of the public service commission.
AB389, s. 2 14Section 2. 16.957 of the statutes is created to read:
AB389,7,15 1516.957 Utility public benefits. (1) Definitions. In this section:
AB389,7,1616 (bm) "Commission" means the public service commission.
AB389,8,3
1(c) "Commitment to community program" means a program by a municipal
2utility or retail electric cooperative for low-income assistance or an energy
3conservation program by a municipal utility or retail electric cooperative.
AB389,8,54 (cm) "Council" means the council on utility public benefits created under s.
515.107 (17).
AB389,8,86 (d) "Customer application of renewable resources" means the generation of
7electricity from renewable resources that takes place on the premises of a customer
8or member of an electric provider.
AB389,8,99 (e) "Division of housing" means the division of housing in the department.
AB389,8,1010 (f) "Electric provider" means an electric utility or retail electric cooperative.
AB389,8,1211 (g) "Electric utility" means a public utility that owns or operates a retail electric
12distribution system.
AB389,8,1413 (h) "Energy conservation program" means a program for reducing the demand
14for natural gas or electricity or improving the efficiency of its use during any period.
AB389,8,1515 (i) "Fiscal year" has the meaning given in s. 655.001 (6).
AB389,8,1816 (k) "Local unit of government" means the governing body of any county, city,
17town, village or county utility district or the elected tribal governing body of a
18federally recognized American Indian tribe or band.
AB389,8,2119 (L) "Low-income assistance" means assistance to low-income households for
20weatherization and other energy conservation services, payment of energy bills or
21early identification or prevention of energy crises.
AB389,9,222 (m) "Low-income household" means any individual or group of individuals in
23this state who are living together as one economic unit and for whom residential
24electricity is customarily purchased in common or who make undesignated

1payments for electricity in the form of rent, and whose household income is not more
2than 150% of the poverty line as determined under 42 USC 9902 (2).
AB389,9,73 (n) "Low-income need" means the amount obtained by subtracting from the
4total low-income energy bills in a fiscal year the product of 2.2% of the estimated
5average annual income of low-income households in this state in that fiscal year
6multiplied by the estimated number of low-income households in this state in that
7fiscal year.
AB389,9,108 (o) "Low-income need percentage" means the percentage that results from
9dividing the sum of the following by the amount of low-income need in fiscal year
101998-99:
AB389,9,1211 1. The total amount received by the department for low-income funding under
1242 USC 6861 to 6873 and 42 USC 8621 to 8629 in fiscal year 1997-98.
AB389,9,1413 1m. The public benefits fees established for fiscal year 1999-2000 under sub.
14(4) (c) 1.
AB389,9,1515 2. The total amount expended by utilities under s. 196.374.
AB389,9,1716 3. Fifty percent of the public benefits fees established for fiscal year 1999-2000
17that are charged by municipal utilities and retail electric cooperatives.
AB389,9,1918 (p) "Low-income need target" means the product of the low-income need
19percentage multiplied by low-income need in a fiscal year.
AB389,9,2120 (q) "Municipal utility" means an electric utility that is owned wholly by a
21municipality and that owns a retail distribution system.
AB389,9,2222 (qm) "Public utility" has the meaning given in s. 196.01 (5).
AB389,9,2323 (r) "Renewable resource" has the meaning given in s. 196.378 (1) (h).
AB389,9,2524 (s) "Retail capacity" means the total amount of electricity that an electric
25provider is capable of delivering to its retail customers or members and that is

1supplied by electric generating facilities owned or operated by the electric provider
2or any other person. "Retail capacity" does not include any electricity that is not used
3to satisfy the electric provider's retail load obligations.
AB389,10,64 (t) "Retail electric cooperative" means a cooperative association that is
5organized under ch. 185 for the purpose of providing electricity at retail to its
6members only and that owns or operates a retail electric distribution system.
AB389,10,97 (u) "Total low-income energy bills" means the total estimated amount that all
8low-income households are billed for residential electricity, natural gas and heating
9fuel in a fiscal year.
AB389,10,1210 (v) "Wholesale electric cooperative" means a cooperative association that is
11organized under ch. 185 for the purpose of providing electricity at wholesale to its
12members only.
AB389,10,1513 (w) "Wholesale supply percentage" means the percentage of a municipal
14utility's or retail electric cooperative's retail capacity in a fiscal year that is supplied
15by a wholesale supplier.
AB389,10,1816 (x) "Wholesale supplier" means a wholesale electric cooperative or a municipal
17electric company, as defined in s. 66.073 (3) (d), that supplies electricity at wholesale
18to a municipal utility or retail electric cooperative.
AB389,10,20 19(2) Department duties. In consultation with the council, the department shall
20do all of the following:
AB389,11,221 (a) Low-income programs. After holding a hearing, establish programs to be
22administered by the department of administration through the division of housing
23for awarding grants from the appropriation under s. 20.505 (10) (r) to provide
24low-income assistance. In each fiscal year, the amount awarded under this

1paragraph in grants for weatherization and other energy conservation services shall
2be sufficient to equal 47% of the sum of the following:
AB389,11,431. All moneys received from the federal government under 42 USC 6861 to 6873
4and 42 USC 8621 to 8629 in a fiscal year.
AB389,11,65 2. All moneys spent in a fiscal year for low-income programs established under
6s. 196.374.
AB389,11,87 3. All moneys spent in a fiscal year on programs established under this
8paragraph.
AB389,11,99 4. Fifty percent of the moneys collected in public benefits fees under sub. (5).
AB389,11,1210 (b) Energy conservation and efficiency and renewable resource programs. 1.
11Subject to subd. 2., after holding a hearing, establish programs for awarding grants
12from the appropriation under s. 20.505 (10) (s) for each of the following:
AB389,11,1913 a. Proposals for providing energy conservation or efficiency services. In
14awarding grants under this subd. 1. a., the department shall give priority to
15proposals directed at the sectors of energy conservation or efficiency markets that
16are least competitive and at promoting environmental protection, electric system
17reliability or rural economic development. In each fiscal year, 1.75% of the
18appropriation under s. 20.505 (10) (s) shall be awarded in grants for research and
19development proposals regarding the environmental impacts of the electric industry.
AB389,11,2520 b. Proposals for encouraging the development or use of customer applications
21of renewable resources, including educating customers or members about renewable
22resources or encouraging uses of renewable resources by customers or members or
23encouraging research technology transfers. In each fiscal year, the department shall
24ensure that 4.5% of the appropriation under s. 20.505 (10) (s) is awarded in grants
25under this subd. 1. b.
AB389,12,5
12. For each fiscal year after fiscal year 2003-04, determine whether to continue,
2discontinue or reduce any of the programs established under subd. 1. and determine
3the total amount necessary to fund the programs that the department determines
4to continue or reduce under this subdivision. The department shall notify the
5commission if the department determines under this subdivision to reduce funding.
AB389,12,66 (c) Rules. Promulgate rules establishing all of the following:
AB389,12,117 1. Eligibility requirements for low-income assistance under programs
8established under par. (a). The rules shall prohibit a person who receives
9low-income assistance from a municipal utility or retail electric cooperative under
10a program specified in sub. (5) (d) 2. b. or 3. a. from receiving low-income assistance
11under programs established under par. (a).
AB389,12,1312 2. Requirements and procedures for applications for grants awarded under
13programs established under par. (a) or (b) 1.
AB389,12,1514 2m. Criteria for the selection of proposals by a corporation specified in sub. (3)
15(b).
AB389,12,1916 2n. Criteria for making the determination under par. (b) 2. Rules promulgated
17under this subdivision shall require the department to determine whether the need
18for a program established under par. (b) 1. is satisfied by the private sector market
19and, if so, whether the program should be discontinued or reduced.
AB389,13,620 4. Requirements for electric utilities to allow customers or members to include
21voluntary contributions to assist in funding a commitment to community program
22or a program established under par. (a) or (b) 1. with bill payments for electric service.
23The rules may require an electric utility to provide a space on an electric bill in which
24a customer or member may indicate the amount of a voluntary contribution and the
25customer's or member's preference regarding whether a contribution should be used

1for a program established under par. (a) or (b) 1. a. or b. The rules shall establish
2requirements and procedures for electric utilities to pay to the department any
3voluntary contributions included with bill payments and to report to the department
4customer or member preferences regarding use of the contributions. The
5department shall deposit all contributions received under this paragraph in the
6utility public benefits fund.
AB389,13,107 5. A method for estimating total low-income energy bills, average annual
8income of low-income households and the number of low-income households in a
9fiscal year for the purpose of determining the amount of low-income need in the fiscal
10year.
AB389,13,1211 (d) Other duties. 1. For each fiscal year after fiscal year 1998-99, determine
12the low-income need target for that fiscal year.
AB389,13,1613 2. Encourage customers or members to make voluntary contributions to assist
14in funding the programs established under pars. (a) and (b) 1. The department shall
15deposit all contributions received under this paragraph in the utility public benefits
16fund.
AB389,13,1817 3. Deposit all moneys received under sub. (4) (a) or (5) (c) or (d) in the utility
18public benefits fund.
AB389,13,2019 4. Provide for an annual independent audit and submit an annual report to the
20legislature under s. 13.172 (2) that describes each of the following:
AB389,13,2221 a. The expenses of the department, other state agencies and grant recipients
22in administering or participating in the programs under pars. (a) and (b).
AB389,13,2423 b. The effectiveness of the programs under par. (a) in providing assistance to
24low-income individuals.
AB389,14,3
1c. The effectiveness of the programs under par. (b) in reducing demand for
2electricity and increasing the use of renewable resources owned by customers or
3members.
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