LRB-4767/1
MDK:kmg/jlg/kaf:jf
1997 - 1998 LEGISLATURE
January 27, 1998 - Introduced by Representatives Gard, R. Potter, Otte, M.
Lehman, Musser, Freese, Ward, Dobyns, Schneider, Ainsworth, Hanson,
Albers, Huebsch, Hubler, Carpenter, Ziegelbauer, Brandemuehl, Robson,
Hebl, Bock, Hasenohrl, Meyer, Baumgart, Gronemus, Boyle, Baldwin,
Schafer and R. Young, cosponsored by Senators Moen, Rude, Grobschmidt,
Fitzgerald, Jauch, Risser, Wineke, Clausing, Schultz and C. Potter.
Referred to Committee on Utilities Oversight.
AB748,2,17
1An Act to repeal 32.03 (5) (b) 3., 32.07 (1m), 66.073 (10) (b), 196.491 (1) (a),
2196.491 (2) (a) 1. and 2., 196.491 (2) (a) 5. and 6., 196.491 (2) (a) 8., 196.491 (2)
3(c) and (d), 196.491 (2) (i) to (m), 196.491 (2m) (title), 196.491 (3) (d) 1., 196.491
4(3) (f) and (ff), 196.491 (3) (g) 2., 196.491 (4) (a) 3., 196.491 (4) (b) and 196.492;
5to renumber 66.073 (10) (a);
to renumber and amend 196.01 (5), 196.375,
6196.491 (2) (am), 196.491 (2m), 196.491 (3) (a) and 196.491 (4) (a) (intro.), 1. and
72.;
to consolidate, renumber and amend 196.491 (3) (g) (intro.) and 1.;
to
8amend 30.025 (1), 30.025 (4), 30.44 (3m) (title), 30.44 (3m) (a), 30.44 (3m) (b),
930.44 (3m) (d), 30.45 (1r), 32.03 (5) (a), 32.03 (5) (b) 1., 32.03 (5) (b) 2., 32.06 (7),
1032.07 (1), 32.075 (3) (a) 2., 32.09 (2m), 86.16 (1), 182.017 (1), 196.025, 196.375
11(title), 196.49 (3) (a), 196.49 (3) (b) (intro.), 2. and 3., 196.491 (title), 196.491 (1)
12(d), 196.491 (1) (e), 196.491 (1) (f), 196.491 (1) (g), 196.491 (2) (a) 3., 196.491 (2)
13(a) 3m., 196.491 (2) (a) 4., 196.491 (2) (a) 7., 196.491 (2) (b) 8., 196.491 (2) (e),
14196.491 (2) (f), 196.491 (2) (g), 196.491 (3) (b), 196.491 (3) (d) (intro.), 196.491
1(3) (d) 2., 196.491 (3) (e), 196.491 (3) (hm), 196.491 (3) (j), 196.491 (3) (k), 196.493
2(1), 196.493 (2) (intro.), 196.795 (7) (a) 1. b. and 289.29 (5);
to repeal and
3recreate 196.491 (2) (title), 196.491 (2) (a) (intro.) and 196.491 (2) (b) (intro.);
4and
to create 196.01 (5) (a) 4. and (b) (intro.) and 4., 196.03 (5m), 196.03 (7),
5196.375 (2), 196.485, 196.49 (3) (e), 196.491 (1) (am), 196.491 (1) (bm), 196.491
6(1) (p), 196.491 (1) (w), 196.491 (2) (a) 3g., 196.491 (2) (a) 3r., 196.491 (2) (a) 9.
7to 13., 196.491 (2) (ag), 196.491 (2) (b) 9., 196.491 (2) (gm), 196.491 (3) (a) 2.,
8196.491 (3) (a) 3. b., 196.491 (3) (d) 7., 196.491 (3) (dm) and 196.491 (5) of the
9statutes;
relating to: strategic energy assessments, constraints on electric
10power transmission, control of certain transmission facilities by an
11independent system operator, the adequacy of retail electric service supplies,
12electric generating and transfer capacities, certification requirements
13applicable to certain projects proposed by public utilities, standards, permits
14and certificates of public convenience and necessity for certain electric
15generating facilities and high-voltage transmission lines, certain out-of-state
16sales of retail electric service, providing an exemption from emergency rule
17procedures and granting rule-making authority.
Analysis by the Legislative Reference Bureau
Electric generating capacity and supply
The bill requires the public service commission (PSC) to issue an order that is
designed to ensure, to the extent practicable, that the aggregate total electric
generating capacity that is available to serve retail customers in a specified area of
the state is increased by 500 megawatts. The area of the state is the area served by
the Mid-America Interconnected Network, Inc., (MAIN) which is an electric
industry reliability council for a portion of the midwestern United States. At least
50 megawatts of the increased capacity must be from renewable energy sources. The
PSC's order may require a public utility to construct additional electric generating
facilities or procure additional electric generating capacity.
The bill also allows the PSC to order a public utility that serves retail electric
customers to take measures to ensure that an adequate supply of retail electric
service will be available to such customers at reasonable rates. The order may
require such a public utility to construct electric generation or transmission
facilities, purchase electric capacity and energy, or participate in regional
associations, power pools and networks. The PSC is also required to establish
mechanisms for the recovery of the costs of such measures.
Electric power transmission
With respect to electric power transmission, the bill requires certain public
utilities to transfer control of the operation of their transmission facilities to an
independent system operator. The bill also requires the PSC to issue an order to
ensure that the state's electric transfer capacity is increased and to study
out-of-state constraints on the transmission of electric power to customers in this
state.
Independent system operator
This bill requires the PSC to order the public utilities that own transmission
equipment in the area of the state served by MAIN to organize a nonprofit
corporation to perform the duties of an independent system operator. The
independent system operator is required to enter into an agreement, which must be
approved by the PSC, with such public utilities under which control over the
operation of their transmission facilities is transferred to the independent system
operator. The PSC may approve the agreement only if it provides for the reasonable
compensation of the public utilities based on their net investment in their
transmission facilities.
The bill also requires the independent system operator to make certain efforts
to ensure the reliability of the transmission system and facilitate competition in the
wholesale electric power market. In addition, the public utilities are required to
provide maintenance, construction and operational support to the independent
system operator pursuant to contracts with the independent system operator that
must be approved by the PSC. Finally, if ordered by the PSC, the independent system
operator must transfer control over the transmission facilities to an interstate entity
that has equivalent duties with respect to a regional area.
New electric transfer capacity
The bill requires the PSC to issue an order that is designed to ensure, to the
extent practicable, that, no later than June 1, 2001, the electric transfer capacity of
the area served by MAIN is no less than 3,500 megawatts. "Electric transfer
capacity" is defined as the maximum amount of electric power that may be imported
into an area on a simultaneous basis and in a reliable manner by way of all available
transmission lines or paths.
Study of out-of-state transmission constraints
The bill directs the PSC to conduct a study on relieving transmission
constraints in other states that adversely affect the reliability of electric service
provided to customers in this state. The PSC must submit a report on the study to
the legislature that describes the transmission constraints, the efforts undertaken
to relieve the constraints and any recommendations, in the form of proposed
legislation or action by the PSC or the governor, for relieving the constraints.
Strategic energy assessment and certificates of public convenience and
necessity
The bill eliminates the requirement for certain public utilities and cooperative
associations to submit advance plans for approval by the PSC and requires instead
that the PSC prepare a strategic energy assessment. In addition, the bill makes
changes to the requirements pertaining to the certificates of public convenience and
necessity that a person must obtain in order to construct certain electric generating
facilities, transmission lines and other projects.
Strategic energy assessment
Under current law, certain public utilities and cooperative associations are
required to submit biennial advance plans to the PSC that include certain
information about their plans to construct the following: 1) "large electric generating
facilities", which are defined as facilities with a capacity of between 12,000 and
300,000 kilowatts; 2) "bulk electric generating facilities", which are defined as
facilities with a capacity of 300,000 kilowatts or more; and 3) "high-voltage
transmission lines", which are defined as lines that are longer than one mile and that
operate at 100 kilovolts or more. After holding a hearing on a plan, the PSC may
approve a plan if the PSC finds that that plan will provide a reasonably adequate
supply of electrical energy to meet the needs of the public and that the plan satisfies
certain other criteria. A public utility or cooperative association must also submit
an advance plan to the lower Wisconsin state riverway board (board) if it intends to
construct, modify or relocate a high-voltage transmission line in the lower Wisconsin
riverway (riverway). The board must approve the plan if it determines that the
high-voltage transmission line will not impair, to the extent practicable, the scenic
beauty or natural value of the riverway.
This bill eliminates the requirements pertaining to advance plans and requires
instead that the PSC prepare an annual strategic energy assessment that evaluates
the adequacy and reliability of the state's current and future energy supply. In
addition, the bill requires a person to obtain a permit from the board in order to
construct, modify or relocate a high-voltage transmission line in the riverway. The
board may not issue the permit unless it makes the same determination as under
current law.
The strategic energy assessment must identify and describe facilities that
generate over 200,000 kilowatts on which public utilities, cooperative associations
and certain other persons plan to begin construction within 3 years. The strategic
energy assessment must also include information about high-voltage transmission
lines on which a public utility or cooperative association plans to begin construction
in the next 18 months. In addition, the strategic energy assessment must describe
all of the following: 1) any plans for assuring that there is an adequate ability to
transfer electric power into the state and the area served by MAIN; 2) the projected
demand for electric power; 3) activities to discourage inefficient and excessive power
use; 4) existing and planned generating facilities that use renewable energy sources;
5) the extent to which the regional bulk-power market is contributing to the
adequacy and reliability of the state's electrical supply; 6) the extent to which
effective competition is contributing to a reliable, low-cost and environmentally
sound source of electricity; and 7) whether sufficient electric capacity and energy is
available at a reasonable price. The PSC must promulgate rules that require public
utilities and cooperative associations to report information that is necessary for the
PSC to prepare the strategic energy assessment.
The PSC is required to issue a draft version of the strategic energy assessment
no later than July 1 of each year. Any state agency, county, municipality, town or
person may submit comments on the draft. The PSC must hold a public hearing on
the strategic energy assessment and, at least 30 days before the hearing, the PSC
must make available to the public an environmental assessment that it prepares on
the strategic energy assessment. Within 90 days after the hearing, the PSC must
issue a final version of the draft.
Certificates of public convenience and necessity
Under current law, a person may not begin constructing a large or bulk electric
generating facility or high-voltage transmission line without obtaining a certificate
of public convenience and necessity (certificate) from the PSC. A person that is not
a public utility or cooperative association is exempt from this requirement if the
person reasonably anticipates that the person will consume no less than 70% of the
aggregate kilowatt hours output from electric generating facilities in manufacturing
processes at the site where the facilities are located. Before filing an application for
a certificate for a large or bulk electric generating facility, a person must provide an
engineering plan to the department of natural resources (DNR), which must provide
the person with a list of DNR permits and approvals that, based on the engineering
plan, appear to be required for the facility. In consultation with the PSC, DNR may
specify whether any permits or approvals must be obtained before the PSC may issue
the certificate.
Also under current law, the PSC must take final action on an application for a
certificate, and DNR must take final action on an application for the permits and
approvals, within specified deadlines that depend on whether the application
concerns a large or bulk electric generating facility or a high-voltage transmission
line. After holding a public hearing on an application for a certificate, the PSC must
issue the certificate if it makes certain determinations, including the following: 1) the
proposed facility or line is in substantial compliance with the most recent advance
plan; 2) the proposed facility or line is necessary to satisfy the reasonable needs of
the public; 3) the design and location are in the public interest; 4) the proposed
facility or line will not have an undue adverse impact on environmental values; and
5) the proposed facility or line will not unreasonably interfere with orderly land use
and development plans. However, the PSC may not issue a certificate until DNR
issues the specified permits and approvals.
This bill changes the types of facilities that are subject to the above
requirements and changes the procedure for issuing a certificate by the PSC and the
permits and approval by DNR. The bill requires a person to obtain a certificate from
the PSC before beginning construction of any of the following: 1) "large electric
generating facilities", which the bill defines as facilities with a capacity of 50,000
kilowatts or more; and 2) "high-voltage transmission lines", which the bill defines
as lines that are longer than 5 miles but that operate at the same voltage as under
current law.
The bill requires a person to file an application for a certificate within 6 months
before beginning construction. The PSC must notify the applicant about whether an
application is complete within 30 days after filing and a person may refile an
incomplete application. If the PSC does not determine whether an application is
complete within the 30-day deadline, the application is considered to be complete.
At the same time that a person applies for a certificate, the person must provide DNR
with an engineering plan and, within 30 days after receiving the plan, DNR must
provide the person with a list of permits and approvals that appear to be applicable.
Within 20 days after DNR provides the list, the person must apply for the permits
and approvals. DNR is subject to a similar 30-day deadline in which DNR must
notify an applicant about whether an application is complete. DNR must complete
action on the permits and approvals within 90 days after an application is
determined or considered to be complete.
Within 180 days after an application for a certificate is determined or
considered to be complete, the PSC must take final action on the application, unless
the circuit court for Dane County grants an extension. After holding a public
hearing, the PSC may issue a certificate only if it makes the same determinations
under current law described above, except for the first determination regarding
compliance with an advance plan. In addition, the PSC does not have to make the
2nd determination regarding need if a large electric generating facility is a
"wholesale merchant plant", which the bill defines as electric generating facilities
that do not provide service to any retail customer and that are owned by a person who
is not a public utility, an affiliate of a public utility, or a cooperative association. Also,
the PSC must determine that the proposed large electric generating facility or
high-voltage transmission line will not have a material adverse impact on
competition in the relevant wholesale electric service market. Such a determination
is not required under current law. Finally, the PSC may not issue a certificate until
the DNR has issued the permits and approvals identified in the list provided by the
DNR.
The bill also changes the exemption from the requirement to obtain a
certificate. Under the bill, a person that is not a public utility or cooperative
association may qualify for the exemption only if the person is also not a public utility
affiliate or otherwise affiliated with a public utility.
Public utility construction projects
Under current law, the PSC may require that a public utility obtain a certificate
of public convenience and necessity before it begins certain construction projects.
Under this bill, a public utility that provides electric service is exempt from this
requirement if the project is not the construction of a nuclear power plant and the
cost of the project is less than an amount based on the public utility's annual gross
operating revenues. If a public utility's annual gross operating revenues are less
$5,000,000, the exemption applies to projects that cost less than $100,000. If such
revenues are between $5,000,000 and $250,000,000, the exemption applies to
projects that cost less than 2% of the revenues. If such revenues are more than
$250,000,000, the exemption applies to projects that cost less than $5,000,000.
Out-of-state electric power sales
The bill requires the PSC, in setting rates, to reduce the revenue requirement
of a public utility by an amount that reflects the fixed capital costs of electric
generating facilities within the state that are incurred to make sales to customers
outside the state whom the public utility does not have a duty to serve. The bill also
prohibits a public utility from making such a sale if the sale interferes with the public
utility's ability to provide cost-effective, reliable electric service to customers in this
state that the public utility has a duty to serve.
Large electric generating facility standards
The bill requires the PSC to promulgate rules establishing standards for the
inspection, maintenance, operation and repair of large electric generating facilities
that are owned by, or provide service to, public utilities. "Large electric generating
facilities" are defined as facilities with a capacity of 50,000 kilowatts or more. The
PSC must also promulgate rules establishing penalties for violating the standards.
Other
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:
AB748, s. 1
1Section
1. 30.025 (1) of the statutes is amended to read:
AB748,7,102
30.025
(1) Any electric utility, as defined in s. 196.491 (1)
(d), proposing to
3construct a facility, as defined in s. 196.491 (1)
(e), which facility is to be located
4adjacent to a waterway in such a manner as to require one or more permits to be
5issued under this chapter and ch. 31 may, in lieu of separate application for permits
6under those chapters, submit an engineering plan together with any additional
7information required by the department. Such plan shall be filed with the
8department within 20 days after an application for a certificate of public convenience
9and necessity is filed with the public service commission under s. 196.491 (3). The
10department may require supplemental information to be furnished thereafter.
AB748, s. 2
11Section
2. 30.025 (4) of the statutes is amended to read:
AB748,8,4
130.025
(4) The permit may be issued upon stated conditions deemed necessary
2to assure compliance with the criteria designated under sub. (3). The department
3shall grant or deny the application within the time limit applicable under s. 196.491
4(3)
(f) (a) 3. b.
AB748, s. 3
5Section
3. 30.44 (3m) (title) of the statutes is amended to read:
AB748,8,66
30.44
(3m) (title)
Utility facilities
; high-voltage transmission lines.
AB748, s. 4
7Section
4. 30.44 (3m) (a) of the statutes is amended to read:
AB748,8,108
30.44
(3m) (a) A person shall apply to and receive a permit from the board
9before constructing, modifying or relocating a utility facility
or high-voltage
10transmission line that is in the riverway.
AB748, s. 5
11Section
5. 30.44 (3m) (b) of the statutes is amended to read:
AB748,8,1512
30.44
(3m) (b) A person may not be issued a permit for an activity in par. (a)
13unless the performance standard in par. (c) is met
and, for a high-voltage
14transmission line, the board finds that the activity will not impair, to the extent
15practicable, the scenic beauty or natural value of the riverway.
AB748, s. 6
16Section
6. 30.44 (3m) (d) of the statutes is amended to read:
AB748,8,2017
30.44
(3m) (d) The use of an aboveground utility facility shall not be a basis for
18the board to determine that all reasonable efforts will not be taken to minimize the
19visual impact.
The board may not require a high-voltage transmission line to be
20placed underground in order to make the finding specified in par. (b).