AB755: Bill Text

LRB-2740/2

MDK/GMM/MES:cjs&nwn:md

2009 - 2010 LEGISLATURE

2009 Assembly BILL 755

February 17, 2010 - Introduced by Representatives Mason, Soletski, Zigmunt, Grigsby, Molepske Jr., Fields, Young, Roys, Colon, Berceau, A. Williams, Zepnick and Toles, cosponsored by Senator Holperin. Referred to Committee on Jobs, the Economy and Small Business.

AB755,1,11 An Act to renumber 16.26 and 196.374 (5) (a); to amend 66.0627 (8), 103.49 (3) (ar), 109.09 (1), 111.322 (2m) (c), 196.374 (4) (b), 196.374 (5) (b) 1., 196.374 (5) (b) 2., 196.374 (5) (bm) 1., 196.374 (5m) (a), 196.378 (1) (i), 196.378 (3) (a) 1., 196.378 (3) (c), 227.01 (13) (t), 946.15 (1), 946.15 (2), 946.15 (3) and 946.15 (4); and to create 16.26 (2), 196.374 (2) (b) 2m., 196.374 (2) (d), 196.374 (5) (a) 2., 196.3745, 196.378 (3) (a) 1m. and 709.03 (form) C. 25m. of the statutes; relating to: allowing certain utilities to administer investment programs for energy efficiency improvements and renewable energy applications, creating requirements for political subdivision loans for similar improvements and applications, providing an exemption from emergency rule procedures, and granting rule-making authority.

Analysis by the Legislative Reference Bureau

This bill allows the Public Service Commission (PSC) to authorize an electric, natural gas, or water public utility (utility) to administer, fund, or provide administrative services for a program for investing in energy efficiency improvements and renewable resource applications at any type of premises served by the utility. The bill defines "energy efficiency improvement" as an improvement that reduces the usage of energy or increases the efficiency of energy usage at premises, and the bill defines "renewable resource application" as the application of specified renewable energy resources, such as, for example, solar or wind power, at premises. The bill allows the PSC to authorize a program only upon application by a utility and prohibits the PSC from requiring that utilities participate in such a program. In addition, if the utility is an investor-owned electric or natural gas utility (energy utility), the PSC may authorize a program only if the PSC finds the program is cost-effective. The bill requires a utility for which the PSC authorizes a program to file a tariff with the PSC that specifies the terms and conditions of utility and nonutility service provided to customers at premises where energy efficiency improvements or renewable resource applications are made under the program. A tariff has no effect until approved by the PSC.

In addition, the bill specifies that premises are not eligible for an investment under an authorized program unless an audit is performed that demonstrates that an energy efficiency improvement or renewable resource application is cost-effective, as specified in rules promulgated by the PSC. The rules may specify criteria that include comparing the cost of an improvement or application to the value of the premises. In addition, for an energy efficiency improvement, the rules may specify criteria that include the energy savings resulting from the improvement and the period of time required for the energy savings to equal the cost of the improvement. In addition, the PSC must promulgate rules requiring the performance of audit after an energy efficiency improvement or renewable resource application is made or installed. The purpose of such a postaudit is to verify that the improvement or application was made or installed. The bill requires the PSC to promulgate rules specifying the certification requirements that a person must satisfy to perform either type of audit.

The bill also requires that all work involved in making or installing an energy efficiency improvement or renewable resource application under an authorized program must be performed by a contractor or subcontractor that the PSC has included on a prequalification list of approved contractors and subcontractors. The PSC may include a contractor or subcontractor on the list only if the PSC determines that the contractor or subcontractor satisfies certain requirements, including the following: 1) agrees to comply with prevailing wage and substance abuse prevention requirements that apply to certain public works projects; 2) certifies that employees are not improperly classified as independent contractors in violation of federal or state law; 3) satisfies cultural competency requirements in rules promulgated by the PSC; 4) certifies every three years that not less than 30 percent of the total hours worked on an individual energy efficiency improvement or renewable resource application will be performed by individuals who had incomes in the prior year that do not exceed 200 percent of federal poverty guidelines and who reside in the 1st or 2nd class city where the work is performed, or, if the work is not performed in a 1st or 2nd class city in the county where the work is performed; and 5) discloses certain past disciplinary actions and violations of federal or state law. If the past disciplinary actions and violations constitute "good cause," as defined by the PSC by rule, the PSC may exclude a contractor or subcontractor from the list. In addition, the PSC must determine that a contractor or subcontractor has agreed to sponsor an apprenticeship program administered by the Department of Workforce Development. However, the bill allows work to be performed by a contractor or subcontractor who does not sponsor such a program, but only if contractors and subcontractors who sponsor such a program are not available to perform the work.

The bill also imposes the requirements described above regarding audits and prequalification on certain loans made under current law by cities, villages, towns, and counties (political subdivisions). Under current law, a political subdivision is authorized to make to make a loan to a resident for making or installing an energy efficiency improvement or renewable resource application to the resident's residential property. Current law allows a political subdivision to collect loan repayments as special charges, divide the special charges into installments, and include the special charges in tax rolls even if they are not delinquent. The bill allows political subdivisions to make the loans for any type of premises, not just residential property as under current law. In addition, a premises is not eligible for a loan unless the audit requirements described above are satisfied. The post-audit requirements also apply to the loans. Also, all work on energy efficiency improvements and renewable resource applications made or installed pursuant to a loan must be performed by contractors and subcontractors who are included on the prequalification list described above.

The bill also includes requirements for utilities and political subdivisions to prioritize spending on utility programs authorized under the bill and political subdivision loans. For utility spending whose source is a grant by the PSC, the utility must give the greatest priority to energy efficiency improvements and renewable resource applications at residential premises and the least priority to energy efficiency improvements and renewable resource applications at nonresidential premises of customers with the greatest demand for utility service. For utility spending from other sources, the priorities are reversed. For political subdivision loans, the bill requires political subdivisions to give the greatest priority to energy efficiency improvements and renewable resource applications at residential premises and the least priority to nonresidential premises of utility customers with the greatest demand for utility services. The PSC must promulgate rules implementing the priorities and requiring utilities and political subdivisions to make annual reports regarding implementation of the priorities.

The bill also does all of the following:

1. Requires the PSC to make grants to political subdivisions for loans described above and to utilities for programs authorized under the bill. The bill directs the PSC to make the grants from certain federal block grants that the state receives under a program administered by the federal Department of Energy under the American Recovery and Reinvestment Act of 2009. The bill also requires the PSC to allocate the federal grants in the manner required under the federal program.

2. Requires political subdivisions and utilities that receive payments from residents and customers for energy efficiency improvements and renewable resource applications under authorized utility programs and political subdivision loans to use the payments to invest in other improvements and applications.

3. Requires a tariff filed by a utility for which a program is authorized to include contracts between the utility and an owner of property benefited by an energy efficiency improvement or renewable resource application. The contracts must require the owner to do the following: a) inform lessees that are liable for utility service that the cost of the improvement or application will appear on the lessees' utility bills; and b) inform a purchaser of the property that the purchaser, or any other person who is liable for utility service at the property, is liable for the unpaid costs of the improvement or application, and that such costs will appear on utility bills for the property.

4. Allows a utility that participates in the program to include a separate line item on customer bills that compares certain costs of the program with energy savings resulting from an energy efficiency improvement or renewable resource application made under the program.

5. Prohibits a utility with an authorized program from recovering from ratepayers any bad debt related to nonutility services provided under the program.

6. Specifies that, if a utility with an authorized program is an energy utility, the PSC must ensure in rate-making orders that the utility recovers from its ratepayers the amounts spent on the program at a rate of return equal to the utility's overall rate of return authorized by the PSC.

7. Requires an owner of residential property to make a disclosure about an energy efficiency improvement or renewable resource application made under an authorized utility program on the real estate conditions report that is required for residential property transfers.

8. Requires contractors and subcontractors to apply to renew their inclusion on the prequalification list every two years, allows the PSC to conditionally approve a contractor or subcontractor for inclusion on the list, allows the PSC to revoke inclusion for "good cause," as defined in rules promulgated by the PSC, and requires the PSC to update the list on a monthly basis and make the list available to the public.

9. Requires the PSC to promulgate a rule or issue an order that prohibits any work under contracts under energy efficiency and renewable resource programs administered by the PSC under current law from being performed by contractors and subcontractors who are not included on the prequalification list described above. However, the rule or order must allow performance of work by contractors and subcontractors who do not satisfy the apprenticeship requirements only if contractors and subcontractors who do satisfy the requirements are not available to perform the work.

10. Requires DOA to promulgate a rule similar to the rule described above that applies to work under contracts under a federal weatherization program administered by DOA under current law.

11. Prohibits an energy utility from counting any spending under a program authorized under the bill toward compliance with requirements under current law for spending a specified percentage of the energy utility's annual operating revenues on energy efficiency and renewable resource programs.

Finally, current law requires certain electric utilities and cooperatives to ensure that, in a given year, a specified percentage of the electricity it sells at retail is derived from renewable resources. These requirements are commonly referred to as renewable portfolio standards (RPSs). Current law also allows electric utilities and cooperatives to create credits based on the amount of electricity derived from renewable resources that is sold at retail in a year and that exceeds the RPS for the year. Subject to certain restrictions, an electric utility or cooperative may use the credit in a subsequent year to help comply with an RPS, or sell the credit to another electric utility or cooperative to help the buyer comply with an RPS. This bill requires the PSC to promulgate rules that allow an electric utility to create an additional credit that can be used or sold like the credits under current law. The PSC's rules must allow for the creation of credits that are based on the reductions in energy usage, increases in efficiency of electricity usage, and generation of renewable energy that results from an energy efficiency improvement or renewable resource application under a program authorized by the PSC under the bill, but only if the spending source for the improvement or application is not a PSC grant under the bill. The PSC's rules must include requirements for measuring the amount of such reductions, increases, and generation, and calculating the amount of a credit. In addition, the bill eliminates the requirement under current law that a credit must be used in a year subsequent to the the year in which it is created or purchased.

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:

AB755, s. 1 Section 1. 16.26 of the statutes is renumbered 16.26 (1).

AB755, s. 2 Section 2. 16.26 (2) of the statutes is created to read:

AB755,6,2 16.26 (2) The department shall prohibit by rule the performance of any work under a contract entered into under sub. (1) by a contractor or subcontractor who is not included in the list specified in s. 196.3745 (5) (a), except that the department's rule shall allow the performance of work by a contractor or subcontractor who does not satisfy the requirement under s. 196.3745 (5) (a) 3. if no contractor or subcontractor who satisfies the requirement is available to perform the work. This subsection applies to contracts that are entered into, extended, modified, or renewed on the effective date of the department's rule.

AB755, s. 3 Section 3. 66.0627 (8) of the statutes, as created by 2009 Wisconsin Act 11, is amended to read:

AB755,6,13 66.0627 (8) A Subject to s. 196.3745, a political subdivision may make a loan to a resident of the political subdivision for making or installing an energy efficiency improvement or a renewable resource application to the resident's residential property premises. If a political subdivision makes such a loan, the political subdivision may collect the loan repayment as a special charge under this section. Notwithstanding the provisions of sub. (4), a special charge imposed under this subsection may be collected in installments and may be included in the current or next tax roll for collection and settlement under ch. 74 even if the special charge is not delinquent.

AB755, s. 4 Section 4 . 103.49 (3) (ar) of the statutes, as affected by 2009 Wisconsin Act 28, is amended to read:

AB755,6,22 103.49 (3) (ar) In determining prevailing wage rates under par. (a) or (am), the department may not use data from projects that are subject to this section, s. 66.0903, 66.0904, 103.50, 196.3745 (5) (a) 1., or 229.8275 or 40 USC 3142 unless the department determines that there is insufficient wage data in the area to determine those prevailing wage rates, in which case the department may use data from projects that are subject to this section, s. 66.0903, 66.0904, 103.50, 196.3745 (5) (a) 1., or 229.8275 or 40 USC 3142.

AB755, s. 5 Section 5 . 109.09 (1) of the statutes, as affected by 2009 Wisconsin Act 28, is amended to read:

AB755,7,21 109.09 (1) The department shall investigate and attempt equitably to adjust controversies between employers and employees as to alleged wage claims. The department may receive and investigate any wage claim which is filed with the department, or received by the department under s. 109.10 (4), no later than 2 years after the date the wages are due. The department may, after receiving a wage claim, investigate any wages due from the employer against whom the claim is filed to any employee during the period commencing 2 years before the date the claim is filed. The department shall enforce this chapter and ss. 66.0903, 66.0904, 103.02, 103.49, 103.82, 104.12, 196.3745 (5) (a) 1., and 229.8275. In pursuance of this duty, the department may sue the employer on behalf of the employee to collect any wage claim or wage deficiency and ss. 109.03 (6) and 109.11 (2) and (3) shall apply to such actions. Except for actions under s. 109.10, the department may refer such an action to the district attorney of the county in which the violation occurs for prosecution and collection and the district attorney shall commence an action in the circuit court having appropriate jurisdiction. Any number of wage claims or wage deficiencies against the same employer may be joined in a single proceeding, but the court may order separate trials or hearings. In actions that are referred to a district attorney under this subsection, any taxable costs recovered by the district attorney shall be paid into the general fund of the county in which the violation occurs and used by that county to meet its financial responsibility under s. 978.13 (2) (b) for the operation of the office of the district attorney who prosecuted the action.

AB755, s. 6 Section 6 . 111.322 (2m) (c) of the statutes, as affected by 2009 Wisconsin Act 28, is amended to read:

AB755,8,2 111.322 (2m) (c) The individual files a complaint or attempts to enforce a right under s. 66.0903, 66.0904, 103.49, 196.3745 (5) (a) 1., or 229.8275 or testifies or assists in any action or proceeding under s. 66.0903, 66.0904, 103.49, 196.3745 (5) (a) 1., or 229.8275.

AB755, s. 7 Section 7. 196.374 (2) (b) 2m. of the statutes is created to read:

AB755,8,6 196.374 (2) (b) 2m. The commission may authorize an energy utility to administer, fund, or provide administrative services for a program described in s. 196.3745 (2) if the commission finds that the program is cost-effective.

AB755, s. 8 Section 8. 196.374 (2) (d) of the statutes is created to read:

AB755,8,16 196.374 (2) (d) Contractors. The commission shall prohibit, by order or rule, the performance of any work under a contract under a program under par. (a) 1., (b) 1. or 2., or (c) by a contractor or subcontractor who is not included in the list specified in s. 196.3745 (5) (a), except that the commission's order or rule shall allow the performance of work by a contractor or subcontractor who does not satisfy the requirement under s. 196.3745 (5) (a) 3. if no contractor or subcontractor who satisfies the requirement is available to perform the work. This paragraph applies to contracts that are entered into, extended, modified, or renewed on the effective date of the commission's order or rule.

AB755, s. 9 Section 9. 196.374 (4) (b) of the statutes is amended to read:

AB755,8,25 196.374 (4) (b) An energy utility that provides financing under an energy efficiency program under sub. (2) (b) 1. or 2. for installation, by a customer, of energy efficiency or renewable resource processes, equipment, or appliances, or an affiliate of such a utility, may not sell to or install for the customer those processes, equipment, appliances, or related materials. The Subject to any order or rule of the commission under sub. (2) (d), the customer shall acquire the installation of the processes, equipment, appliances, or related materials from an independent contractor of the customer's choice.

AB755, s. 10 Section 10. 196.374 (5) (a) of the statutes is renumbered 196.374 (5) (a) 1.

AB755, s. 11 Section 11. 196.374 (5) (a) 2. of the statutes is created to read:

AB755,9,7 196.374 (5) (a) 2. The commission shall ensure in rate-making orders that an energy utility recovers from its ratepayers the amounts the energy utility spends for a program authorized under sub. (2) (b) 2m. and that an energy utility is allowed to earn a rate of return on such amounts that is equal to the energy utility's overall rate of return authorized by the commission.

AB755, s. 12 Section 12. 196.374 (5) (b) 1. of the statutes is amended to read:

AB755,9,14 196.374 (5) (b) 1. Except as provided in sub. (2) (c) and par. (bm) 2., if the commission has determined that a customer of an energy utility is a large energy customer under 2005 Wisconsin Act 141, section 102 (8) (b), then, each month, the energy utility shall collect from the customer, for recovery of amounts under par. (a) 1., the amount determined by the commission under 2005 Wisconsin Act 141, section 102 (8) (c).