MDK:kmg&jlg&kaf:jf
1997 - 1998 LEGISLATURE
March 19, 1998 - Introduced by Representatives Hoven, Gard, Johnsrud, Ott,
Riley and Plale, cosponsored by Senators Welch, Rude and Farrow, by
request of Governor Tommy G. Thompson. Referred to Committee on Utilities
Oversight.
AB940,2,16
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 (3) (hm), 196.491 (4) (a) (intro.), 196.491
5(4) (a) 3. and 196.492;
to renumber 66.073 (10) (a), 196.377 and 196.491 (4) (a)
61. and 2.;
to renumber and amend 32.02 (5), 196.39, 196.491 (2) (am), 196.491
7(2m), 196.491 (3) (a) and 196.491 (4) (b);
to consolidate, renumber and
8amend 196.491 (3) (g) (intro.) and 1.;
to amend 30.025 (1), 30.025 (4), 30.44
9(3m) (title), 30.44 (3m) (a), 30.44 (3m) (b), 30.44 (3m) (d), 30.45 (1r), 32.03 (5)
10(a), 32.03 (5) (b) 1., 32.03 (5) (b) 2., 32.06 (7), 32.07 (1), 32.075 (3) (a) 2., 32.09
11(2m), 86.16 (1), 182.017 (1), 196.24 (3), 196.491 (title), 196.491 (1) (d), 196.491
12(1) (e), 196.491 (1) (g), 196.491 (2) (a) 3., 196.491 (2) (a) 3m., 196.491 (2) (a) 4.,
13196.491 (2) (a) 7., 196.491 (2) (b) 8., 196.491 (2) (e), 196.491 (2) (f), 196.491 (2)
14(g), 196.491 (3) (b), 196.491 (3) (d) (intro.), 196.491 (3) (d) 2., 196.491 (3) (d) 3.,
1196.491 (3) (e), 196.491 (3) (j), 196.491 (3) (k), 196.493 (1), 196.493 (2) (intro.),
2196.53, 196.795 (7) (a) 1. b. and 289.29 (5);
to repeal and recreate 196.491 (2)
3(title), 196.491 (2) (a) (intro.) and 196.491 (2) (b) (intro.); and
to create 32.02
4(5) (a), 196.03 (5m), 196.377 (title), 196.377 (2), 196.39 (2), 196.485, 196.491 (1)
5(am), 196.491 (1) (bm), 196.491 (1) (w), 196.491 (2) (a) 3g., 196.491 (2) (a) 3r.,
6196.491 (2) (a) 9. to 13., 196.491 (2) (ag), 196.491 (2) (b) 9. and 10., 196.491 (2)
7(gm), 196.491 (3) (a) 2., 196.491 (3) (a) 3. b., 196.491 (3) (d) 7., 196.491 (3) (g) 1m.,
8196.491 (3m), 196.491 (4) (c), 196.491 (5), 196.494 and 196.795 (5) (pm) of the
9statutes;
relating to: strategic energy assessments, certification requirements
10applicable to certain projects proposed by public utilities, certificates of public
11convenience and necessity for certain electric generating facilities and
12high-voltage transmission lines, independent system operator or transmission
13owner of electric transmission system, certain out-of-state retail electric sales,
14ownership and operation of wholesale merchant plants, service standards for
15electric generation, transmission or distribution facilities, regional
16transmission planning and granting rule-making authority.
Analysis by the Legislative Reference Bureau
The bill eliminates the requirement under current law for certain public
utilities and cooperative associations to submit advance plans for approval by the
public service commission (PSC) and requires instead that the public service
commission (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 and transmission lines. The bill also imposes various other requirements
regarding each of the following: 1) the electric transmission system; 2) the ownership
and operation of certain electric generating facilities that do not provide retail
electric service, which the bill defines as "wholesale merchant plants", by affiliates
of public utilities; 3) the construction of electric generating capacity by certain public
utilities; and 4) various other requirements.
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 and 300
megawatts; 2) "bulk electric generating facilities", which are defined as facilities
with a capacity of 300 megawatts 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 State
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 a biennial 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 large electric
generating facilities 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 eastern part of the state that is served by the
Mid-America Interconnected Network, Inc. (MAIN), which is an electric industry
reliability council for a portion of the midwestern United States; 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 for reporting
information that is necessary for the PSC to prepare the strategic energy
assessment.
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 necessary to satisfy the reasonable needs of the public;
2) the design and location are in the public interest; 3) the proposed facility or line
will not have an undue adverse impact on environmental values; and 4) 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 "large electric generating facilities", which
the bill defines as facilities with a capacity of 100 megawatts or more. Also, the bill
exempts a person from the requirement to obtain a certificate for construction
activities related to high-voltage transmission lines that operate at less than 230
kilovolts if the construction activities take place entirely within an existing
right-of-way.
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 or unless another state is also
taking action on the same or a related application. After holding a public hearing,
the PSC may issue a certificate only if it makes the same determinations under
current law described above. 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 DNR has issued the permits and approvals identified in the
list provided by DNR.
Electric transmission system
The bill imposes various requirements regarding the electric transmission
system. Under the bill, if a public utility or cooperative association has not, by June
30, 2000, transferred control over its electric transmission facilities to a federally
approved independent system operator (ISO), the PSC may order such a utility or
cooperative association to apply for federal approval to do any of the following: 1)
transfer control over its transmission facilities to an ISO that has federal approval
to operate in a region that includes this state; 2) transfer control over its
transmission facilities to an ISO that has not yet received federal approval but is
intended to operate in such a region; or 3) divest its interest in its transmission
facilities to an independent transmission owner (ITO) that satisfies certain
requirements. In addition, by June 30, 2000, the PSC is required to order public
utilities to separately account for cost of retail electric transmission service and to
take all of its retail transmission service from an ISO or ITO.
Subject to the certificate of public convenience and necessity requirements
described above, the bill requires an ITO or, when ordered by an ISO, certain public
utilities and cooperative associations to construct new electric transmission facilities
if the ITO or ISO determines a need for such facilities. The bill also imposes certain
requirements on an ITO's or ISO's operation of transmission facilities.
Also under the bill, the PSC must submit a study to the legislature by
September 1, 1998, that identifies constraints on the regional electric transmission
system that adversely affect the reliability of service provided to customers in this
state. Based on the results of the study, the PSC may, no later than December 31,
2004, order public utilities to construct transmission facilities that are necessary to
relieve constraints on the transmission system.
Wholesale merchant plants
In general, the bill prohibits an affiliate of a public utility from owning or
operating a wholesale merchant plant unless the public utility has transferred
control over its transmission facilities to an ISO or ITO and the PSC finds that the
ownership or operation of the wholesale merchant plant by the affiliate will not have
a substantially adverse anticompetitive effect on electricity markets. In addition,
the PSC is required to review sales to public utilities of electricity that is generated
from wholesale merchant plants owned or operated by affiliates. If the PSC finds
that such a sale is not in the public interest, the PSC may take remedial action that
includes disallowing the public utility's costs related to the sale in a rate-setting
proceeding. Also, the bill prohibits any such sale of electricity on an uninterruptible
basis that is for a period of 3 years or more. Finally, an affiliate that applies for a
certificate of public convenience and necessity for a wholesale merchant plant is
exempt from the requirement that the PSC determine that the plant satisfies the
reasonable needs of the public.
Electric generating capacity
The bill requires nonmunicipal utilities that provide retail electric service in
the area served by MAIN to construct an aggregate total of 50 megawatts of new
electric capacity that is generated from renewable energy sources by December 31,
2000. Also, the bill requires certain of such utilities that have issued requests for
proposals for additional electric generating capacity to enter into contracts for the
capacity by July 31, 1998, and the bill shortens the regulatory approval deadlines
that would otherwise apply to the additional capacity.
Other
The bill imposes various other requirements, including the following:
1. The bill requires the PSC to promulgate rules that require 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.
2. The bill requires the PSC to promulgate rules establishing standards for
inspecting, maintaining and repairing certain electric generation, transmission and
distribution facilities.
3. The bill makes certain changes to the calculation of nonutility assets in a
public utility holding company system for purposes of determining whether the total
amount of such assets complies with specified limits under current law.
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:
AB940, s. 1
1Section
1. 30.025 (1) of the statutes is amended to read:
AB940,7,62
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
1issued under this chapter and ch. 31 may, in lieu of separate application for permits
2under those chapters, submit an engineering plan together with any additional
3information required by the department. Such plan shall be filed with the
4department within 20 days after an application for a certificate of public convenience
5and necessity is filed with the public service commission under s. 196.491 (3). The
6department may require supplemental information to be furnished thereafter.
AB940, s. 2
7Section
2. 30.025 (4) of the statutes is amended to read:
AB940,7,118
30.025
(4) The permit may be issued upon stated conditions deemed necessary
9to assure compliance with the criteria designated under sub. (3). The department
10shall grant or deny the application within the time limit applicable under s. 196.491
11(3)
(f) (a) 3. b.
AB940, s. 3
12Section
3. 30.44 (3m) (title) of the statutes is amended to read:
AB940,7,1313
30.44
(3m) (title)
Utility facilities
; high-voltage transmission lines.
AB940, s. 4
14Section
4. 30.44 (3m) (a) of the statutes is amended to read:
AB940,7,1715
30.44
(3m) (a) A person shall apply to and receive a permit from the board
16before constructing, modifying or relocating a utility facility
or high-voltage
17transmission line that is in the riverway.
AB940, s. 5
18Section
5. 30.44 (3m) (b) of the statutes is amended to read:
AB940,7,2219
30.44
(3m) (b) A person may not be issued a permit for an activity in par. (a)
20unless the performance standard in par. (c) is met
and, for a high-voltage
21transmission line, the board finds that the activity will not impair, to the extent
22practicable, the scenic beauty or natural value of the riverway.
AB940, s. 6
23Section
6. 30.44 (3m) (d) of the statutes is amended to read:
AB940,8,224
30.44
(3m) (d) The use of an aboveground utility facility shall not be a basis for
25the board to determine that all reasonable efforts will not be taken to minimize the
1visual impact.
The board may not require a high-voltage transmission line to be
2placed underground in order to make the finding specified in par. (b).
AB940, s. 7
3Section
7. 30.45 (1r) of the statutes is amended to read:
AB940,8,64
30.45
(1r) No person may construct, modify or relocate a high-voltage
5transmission line unless it has been approved under s.
30.44 (3m) or 196.491 (3) (d)
63m.
or 196.492.
AB940, s. 8
7Section
8. 32.02 (5) of the statutes is renumbered 32.02 (5) (b) and amended
8to read:
AB940,8,129
32.02
(5) (b) Any Wisconsin corporation engaged in the business of
10transmitting or furnishing heat, power or electric light for the public
or any foreign
11transmission provider for the construction and location of its lines or for ponds or
12reservoirs or any dam, dam site, flowage rights or undeveloped water power.
AB940, s. 9
13Section
9. 32.02 (5) (a) of the statutes is created to read:
AB940,8,1514
32.02
(5) (a) "Foreign transmission provider" means a foreign corporation that
15satisfies each of the following:
AB940,8,1916
1. The foreign corporation is an independent system operator, as defined in s.
17196.485 (1) (d), or an independent transmission owner, as defined in s. 196.485 (1)
18(dm), that is approved by the applicable federal agency, as defined in s. 196.485 (1)
19(c).
AB940,8,2120
2. The foreign corporation controls transmission facilities, as defined in s.
21196.485 (1) (h), in this and another state.
AB940, s. 10
22Section
10. 32.03 (5) (a) of the statutes is amended to read:
AB940,9,323
32.03
(5) (a) If an electric utility is required to obtain a certificate of public
24convenience and necessity from the public service commission under s. 196.491
(3),
25no right to acquire real estate or personal property appurtenant thereto or interest
1therein for such project by condemnation shall accrue or exist under s. 32.02 or
232.075 (2) until such a certificate of public convenience and necessity has been
3issued.
AB940, s. 11
4Section
11. 32.03 (5) (b) 1. of the statutes is amended to read:
AB940,9,55
32.03
(5) (b) 1. Such a limited interest does not run for more than 3 years;
and
AB940, s. 12
6Section
12. 32.03 (5) (b) 2. of the statutes is amended to read:
AB940,9,97
32.03
(5) (b) 2. Activities associated with such tests or studies will be conducted
8at reasonable hours with minimal disturbance, and the property will be reasonably
9restored to its former state, upon completion of such tests or studies
; and.
AB940, s. 13
10Section
13. 32.03 (5) (b) 3. of the statutes is repealed.
AB940, s. 14
11Section
14. 32.06 (7) of the statutes is amended to read:
AB940,9,2512
32.06
(7) Petition for condemnation proceedings. If the jurisdictional offer
13is not accepted within the periods limited in sub. (6) or the owner fails to consummate
14an acceptance as provided in sub. (6), the condemnor may present a verified petition
15to the circuit court for the county in which the property to be taken is located, for
16proceedings to determine the necessity of taking, where such determination is
17required, and the amount of just compensation. The petition shall state that the
18jurisdictional offer required by sub. (3) has been made and rejected; that it is the
19intention of the condemnor in good faith to use the property or right therein for the
20specified purpose. It shall name the parties having an interest of record in the
21property as near as may be and shall name the parties who are minors or persons of
22unsound mind or unknown. The petition may not disclose the amount of the
23jurisdictional offer, and if it does so it is a nullity. The petition shall be filed with the
24clerk of the court. Notice of the petition shall be given as provided in s. 32.05 (4) to
25all persons having an interest of record in the property, including the special
1guardian appointed for minors or incompetent persons. A lis pendens shall be filed
2on the date of filing the petition. The date of filing the lis pendens is the "date of
3evaluation" of the property for the purpose of fixing just compensation, except that
4if the property is to be used in connection with the construction of a facility, as defined
5under s. 196.491 (1), the "date of evaluation" is the date that
the first advance plan
6identifying the property as a site or route under s. 196.491 (2) (a) 3. is filed with the
7public service commission, or the date which is 2 years prior to the date
on which the
8certificate of public convenience and necessity is issued for the facility
, whichever is
9earlier. The hearing on the petition may not be earlier than 20 days after the date
10of its filing unless the petitioner acquired possession of the land under s. 32.12 (1)
11in which event this hearing is not necessary. If the petitioner is entitled to condemn
12the property or any portion of it, the judge immediately shall assign the matter to the
13chairperson of the county condemnation commissioners for hearing under s. 32.08.
14An order by the judge determining that the petitioner does not have the right to
15condemn or refusing to assign the matter to the chairperson of the county
16condemnation commissioners may be appealed directly to the court of appeals.
AB940, s. 15
17Section
15. 32.07 (1) of the statutes is amended to read:
AB940,10,2018
32.07
(1) A certificate of public convenience and necessity issued under s.
19196.491
(3) shall constitute the determination of the necessity of the taking for any
20lands or interests described in the certificate.
AB940, s. 16
21Section
16. 32.07 (1m) of the statutes is repealed.
AB940, s. 17
22Section
17. 32.075 (3) (a) 2. of the statutes is amended to read:
AB940,11,323
32.075
(3) (a) 2. The public service commission revokes a certificate of public
24convenience and necessity required under s. 196.491 (3) (a)
1. or finds that a state
25or federal agency has denied or revoked any license, permit, certificate or other
1requirement on which completion of the public utility's project for which the land was
2condemned is contingent or that the public utility has for any other reason
3abandoned a project for which the condemned property was acquired.
AB940, s. 18
4Section
18. 32.09 (2m) of the statutes is amended to read:
AB940,11,105
32.09
(2m) In determining just compensation for property sought to be
6condemned in connection with the construction of facilities, as defined under s.
7196.491 (1)
(e), any increase in the market value of such property occurring after the
8date of evaluation but before the date upon which the lis pendens is filed under s.
932.06 (7) shall be considered and allowed to the extent it is caused by factors other
10than the planned facility.
AB940, s. 19
11Section
19. 66.073 (10) (a) of the statutes is renumbered 66.073 (10).
AB940, s. 20
12Section
20. 66.073 (10) (b) of the statutes is repealed.
AB940, s. 21
13Section
21. 86.16 (1) of the statutes is amended to read:
AB940,11,2114
86.16
(1) Any person, firm or corporation, including any foreign corporation
15authorized to transact business in this state may, subject to ss. 30.44 (3m), 30.45
, and 16196.491 (3) (d) 3m.
and 196.492, with the written consent of the department with
17respect to state trunk highways, and with the written consent of local authorities
18with respect to highways under their jurisdiction, including connecting highways,
19construct and operate telegraph, telephone or electric lines, or pipes or pipelines for
20the purpose of transmitting messages, water, heat, light or power along, across or
21within the limits of the highway.
AB940, s. 22
22Section
22. 182.017 (1) of the statutes is amended to read:
AB940,12,1323
182.017
(1) Right-of-way for. Any domestic corporation organized to furnish
24telegraph or telecommunications service or transmit heat, power or electric current
25to the public or for public purposes,
and any an independent system operator, as
1defined in s. 196.485 (1) (d), an independent transmission owner, as defined in s.
2196.485 (1) (dm), or a cooperative association organized under ch. 185 to furnish
3telegraph or telecommunications service or transmit heat, power or electric current
4to its members, may, subject to ss. 30.44 (3m), 30.45, 86.16
, and 196.491 (3) (d) 3m.
5and 196.492 and to reasonable regulations made by any city, village or town through
6which its transmission lines or systems may pass, construct and maintain such lines
7or systems with all necessary appurtenances in, across or beneath any public
8highway or bridge or any stream or body of water, or upon any lands of any owner
9consenting thereto, and for such purpose may acquire lands or the necessary
10easements; and may connect and operate its lines or system with other lines or
11systems devoted to like business, within or without this state, and charge reasonable
12rates for the transmission and delivery of messages or the furnishing of heat, power
13or electric light.
AB940, s. 23
14Section
23. 196.03 (5m) of the statutes is created to read:
AB940,12,2015
196.03
(5m) The commission shall promulgate rules establishing
16requirements and procedures for the commission, in setting rates for retail electric
17service, to reduce the revenue requirement of a public utility by an amount that
18reflects, as determined by the commission, the fixed capital costs of generating
19facilities within the state that are incurred to make any sale to a customer outside
20this state that the public utility does not have a duty to serve.
AB940, s. 24
21Section
24. 196.24 (3) of the statutes is amended to read:
AB940,13,722
196.24
(3) The commission may conduct any number of investigations
23contemporaneously through different agents, and may delegate to any agent the
24authority to take testimony bearing upon any investigation or at any hearing. The
25decision of the commission shall comply with s. 227.46 and shall be based upon its
1records and upon the evidence before it
, except that, notwithstanding s. 227.46 (4),
2a decision maker may hear a case or read or review the record of a case if the record
3includes a synopsis or summary of the testimony and other evidence presented at the
4hearing that is prepared by the commission staff. Parties shall have an opportunity
5to demonstrate to a decision maker that a synopsis or summary prepared under this
6subsection is not sufficiently complete or accurate to fairly reflect the relevant and
7material testimony or other evidence presented at a hearing.
AB940, s. 25
8Section
25. 196.377 (title) of the statutes is created to read: