AB389-ASA2,51,2416 196.494 (3) No later than December 31, 2004, the The commission may shall,
17under this subsection, issue an order requiring an electric utility to construct or
18procure, on a competitive basis, the construction of transmission facilities specified
19by the commission in its order if the commission determines that, based on the
20results of the study under sub. (2),
such construction is necessary to relieve a
21constraint on a transmission system and the construction will materially benefit the
22customers of the electric utility or other electric utilities or of an independent system
23operator, as defined in s. 196.485 (1) (d), or independent transmission owner, as
24defined in s. 196.485 (1) (dm).
AB389-ASA2, s. 67 25Section 67. 196.494 (5) of the statutes is created to read:
AB389-ASA2,52,6
1196.494 (5) The governor may, on behalf of this state, enter into an interstate
2compact that establishes a joint process for the states in the upper midwest region
3of the United States to determine the need for and siting of regional electric
4transmission facilities that may affect electric service in this state. The governor
5may not enter into a compact under this subsection unless the compact includes
6requirements and procedures for establishing each of the following:
AB389-ASA2,52,87 (a) Compliance with each state's environmental and siting standards for
8transmission facilities.
AB389-ASA2,52,99 (b) A regional need determination for transmission facilities.
AB389-ASA2,52,1110 (c) A mechanism for resolving conflicts between the states regarding the siting
11of transmission facilities.
AB389-ASA2, s. 68 12Section 68. 196.52 (3) (a) of the statutes is amended to read:
AB389-ASA2,53,1713 196.52 (3) (a) In this subsection, "contract or arrangement" means a contract
14or arrangement providing for the furnishing of management, supervisory,
15construction, engineering, accounting, legal, financial or similar services and any
16contract or arrangement for the purchase, sale, lease or exchange of any property,
17right, or thing, or for the furnishing of any service, property, right, or thing, other
18than management, supervisory, construction, engineering, accounting, legal,
19financial or similar services, but "contract or arrangement" does not include a
20contract or arrangement under which a transmission utility, as defined in s. 196.485
21(1) (i), sells or transfers securities, as defined in s. 196.485 (1) (fe), that have been
22issued by a transmission company, as defined in s. 196.485 (1) (ge)
. Except as
23provided under par. (b), unless and until the commission gives its written approval,
24any contract or arrangement is not valid or effective if the contract or arrangement
25is made between a public utility and an affiliated interest after June 7, 1931. Every

1public utility shall file with the commission a verified copy of any contract or
2arrangement, a verified summary of any unwritten contract or arrangement, and
3any contract or arrangement, written or unwritten, which was in effect on June 7,
41931. The commission shall approve a contract or arrangement made or entered into
5after June 7, 1931, only if it shall clearly appear and be established upon
6investigation that it is reasonable and consistent with the public interest. The
7commission may not approve any contract or arrangement unless satisfactory proof
8is submitted to the commission of the cost to the affiliated interest of rendering the
9services or of furnishing the property or service to each public utility or of the cost
10to the public utility of rendering the services or of furnishing the property or service
11to each affiliated interest. No proof is satisfactory under this paragraph unless it
12includes the original (or verified copies) of the relevant cost records and other
13relevant accounts of the affiliated interest, or an abstract of the records and accounts
14or a summary taken from the records and accounts if the commission deems the
15abstract or summary adequate. The accounts shall be properly identified and duly
16authenticated. The commission, where reasonable, may approve or disapprove a
17contract or arrangement without submission of the cost records or accounts.
AB389-ASA2, s. 69 18Section 69. 196.795 (1) (g) 1. of the statutes is amended to read:
AB389-ASA2,53,2119 196.795 (1) (g) 1. As a beneficial owner, to take, hold or acquire 5% or more of
20the outstanding voting securities of a public utility, other than a transmission
21company,
with the unconditional power to vote those securities.
AB389-ASA2, s. 70 22Section 70. 196.795 (1) (g) 2. of the statutes is amended to read:
AB389-ASA2,54,223 196.795 (1) (g) 2. To exchange or convert 50% or more of the outstanding voting
24securities of a public utility, other than a municipality or other political subdivision
25or a transmission company, for or into the voting securities of a company organized,

1created, appointed or formed by or at the direction of the public utility or of a
2subsidiary of such company.
AB389-ASA2, s. 71 3Section 71. 196.795 (1) (h) 3. of the statutes is created to read:
AB389-ASA2,54,44 196.795 (1) (h) 3. "Holding company" does not include a transmission company.
AB389-ASA2, s. 72 5Section 72. 196.795 (1) (p) of the statutes is created to read:
AB389-ASA2,54,76 196.795 (1) (p) "Transmission company" has the meaning given in s. 196.485
7(1) (ge).
AB389-ASA2, s. 73 8Section 73. 196.795 (5) (i) 1. of the statutes is amended to read:
AB389-ASA2,54,129 196.795 (5) (i) 1. Shall consider the public utility affiliate as a wholly
10independent corporation and shall impute a capital structure to the public utility
11affiliate and establish a cost of capital for the public utility affiliate on a stand-alone
12basis
;
AB389-ASA2, s. 74 13Section 74. 196.795 (5) (p) 1., 2., 3. and 4. of the statutes are renumbered
14196.795 (6m) (b) 1., 2., 3. and 4.
AB389-ASA2, s. 75 15Section 75. 196.795 (5) (pm) 1. (intro.) of the statutes is repealed.
AB389-ASA2, s. 76 16Section 76. 196.795 (5) (pm) 1. a. of the statutes is renumbered 196.795 (6m)
17(a) 3.
AB389-ASA2, s. 77 18Section 77. 196.795 (5) (pm) 1. b. of the statutes is renumbered 196.795 (6m)
19(a) 5.
AB389-ASA2, s. 78 20Section 78. 196.795 (5) (pm) 1. c. of the statutes is renumbered 196.795 (6m)
21(a) 6.
AB389-ASA2, s. 79 22Section 79. 196.795 (5) (pm) 2. of the statutes is renumbered 196.795 (6m) (c)
23and amended to read:
AB389-ASA2,55,424 196.795 (6m) (c) Wholesale merchant plants. The assets of a wholesale
25merchant plant shall not be included in the sum of the assets of a public utility

1affiliate under par. (p) (b) 1. a., b. or c. and shall not be included in a nonutility
2affiliate's total assets under par. (p) (b) 2. a. if the requirements specified in s. 196.491
3(3m) (a) 1. and 2. are satisfied or if the wholesale merchant plant qualifies for the
4exemption under s. 196.491 (3m) (e).
AB389-ASA2, s. 80 5Section 80. 196.795 (5) (pm) 3. of the statutes is renumbered 196.795 (6m) (d)
6and amended to read:
AB389-ASA2,55,107 196.795 (6m) (d) Foreign affiliates. The assets of a foreign affiliate shall be
8included in the sum of the assets of a public utility affiliate under par. (p) (b) 1. a.,
9b. or c. and shall not be included in a nonutility affiliate's total assets under par. (p)
10(b) 2. a.
AB389-ASA2, s. 81 11Section 81. 196.795 (6m) (title) of the statutes is created to read:
AB389-ASA2,55,1212 196.795 (6m) (title) Asset cap.
AB389-ASA2, s. 82 13Section 82. 196.795 (6m) (a) (intro.) of the statutes is created to read:
AB389-ASA2,55,1414 196.795 (6m) (a) Definitions. (intro.) In this subsection:
AB389-ASA2, s. 83 15Section 83. 196.795 (6m) (a) 1. of the statutes is created to read:
AB389-ASA2,55,1816 196.795 (6m) (a) 1. "Contributor public utility affiliate" means a public utility
17affiliate that has contributed its transmission facilities to the transmission company
18under s. 196.485 (5) (b).
AB389-ASA2, s. 84 19Section 84. 196.795 (6m) (a) 2. of the statutes is created to read:
AB389-ASA2,55,2120 196.795 (6m) (a) 2. "Eligible asset" means an asset of a nonutility affiliate that
21is used for any of the following:
AB389-ASA2,55,2322 a. Producing, generating, transmitting, delivering, selling or furnishing gas,
23oil, electricity or steam energy.
AB389-ASA2,55,2524 b. Providing an energy management, conservation or efficiency product or
25service or a demand-side management product or service.
AB389-ASA2,56,1
1c. Providing an energy customer service, including metering or billing.
AB389-ASA2,56,22 d. Recovering or producing energy from waste materials.
AB389-ASA2,56,33 e. Processing waste materials.
AB389-ASA2,56,64 f. Manufacturing, distributing or selling products for filtration, pumping water
5or other fluids, processing or heating water, handling fluids or other related
6activities.
AB389-ASA2,56,77 g. Providing a telecommunications service, as defined in s. 196.01 (9m).
AB389-ASA2, s. 85 8Section 85. 196.795 (6m) (a) 4. of the statutes is created to read:
AB389-ASA2,56,119 196.795 (6m) (a) 4. "Generation assets" means assets that are classified as
10electric generation assets on the books of account of a public utility, as determined
11by the commission.
AB389-ASA2, s. 86 12Section 86. 196.795 (6m) (b) (title) of the statutes is created to read:
AB389-ASA2,56,1313 196.795 (6m) (b) In general.
AB389-ASA2, s. 87 14Section 87. 196.795 (6m) (e) of the statutes is created to read:
AB389-ASA2,56,2015 196.795 (6m) (e) Contributor public utility affiliates. 1. The eligible assets of
16a nonutility affiliate in a holding company system that includes each of the
17contributor public utility affiliates in the holding company system shall not be
18included in the sum of the assets of the public utility affiliates under par. (b) 1. a.,
19b. or c. and shall not be included in the nonutility affiliate's total assets under par.
20(b) 2. a.
AB389-ASA2,56,2221 2. For purposes of subd. 1., all of the assets of a nonutility affiliate shall be
22considered eligible assets if each of the following is satisfied:
AB389-ASA2,56,2523 a. The bylaws of the nonutility affiliate or a resolution adopted by its board of
24directors specifies that the business of the nonutility affiliate is limited to activities
25involving eligible assets.
AB389-ASA2,57,1
1b. Substantially all of the assets of the nonutility affiliate are eligible assets.
AB389-ASA2,57,72 3. The net book value of transmission facility assets that a contributor public
3utility affiliate has contributed to a transmission company under s. 196.485 (5) (b)
4shall be included in the sum of the assets of the public utility affiliate under par. (b)
51. a., b. and c. In determining net book value under this subdivision, accumulated
6depreciation shall be calculated as if the contributor public utility affiliate had not
7contributed the assets.
AB389-ASA2,57,148 4. The net book value of generation assets that a contributor public utility
9affiliate has transferred to a person that is not affiliated with the public utility
10affiliate pursuant to the order of the commission, a court or a federal regulatory
11agency shall be included in the sum of the assets of the public utility affiliate under
12par. (b) 1. a., b. and c. In determining net book value under this subdivision,
13accumulated depreciation shall be calculated as if the contributor public utility
14affiliate had not transferred the assets.
AB389-ASA2, s. 88 15Section 88. 196.795 (11) (b) of the statutes is amended to read:
AB389-ASA2,58,216 196.795 (11) (b) This section shall be deemed to legalize and confirm the
17formation, prior to November 28, 1985, of any holding company, which is not itself
18a public utility, and shall be deemed to legalize and confirm the operations and
19issuances of securities of the holding company, except that nothing in this section
20shall be deemed to prevent the commission from imposing reasonable terms,
21limitations or conditions on any holding company which are consistent with the
22requirements of sub. (5) (pm) (6m) (c) or (d) or which are consistent with and
23necessary to satisfy the requirements of sub. (5) (b) to (o) and (q) to (s) or which relate
24to future investments by the holding company unless the holding company owns,

1operates, manages or controls a telecommunications utility and does not also own,
2operate, manage or control a public utility which is not a telecommunications utility.
AB389-ASA2, s. 89 3Section 89. 196.795 (11) (c) of the statutes is created to read:
AB389-ASA2,58,124 196.795 (11) (c) The commission may not impose upon a holding company the
5formation of which is considered to be legalized and confirmed under par. (b) any
6term, limitation or condition under par. (b) that establishes the sum of the holding
7company's nonutility affiliate assets at less than 25% of the sum of the holding
8company's utility affiliate assets. For purposes of this paragraph, any term,
9limitation or condition on nonutility affiliate assets shall not apply to the ownership,
10operation, management or control of any eligible asset, as defined under sub. (6m)
11(a) 2., or an asset that is used for manufacturing, distributing or selling swimming
12pools or spas.
AB389-ASA2, s. 90 13Section 90. 196.796 of the statutes is created to read:
AB389-ASA2,58,14 14196.796 Real estate activities. (1) In this section:
AB389-ASA2,58,1715 (a) "Brownfields facility or site" means any abandoned, idle or underused
16industrial or commercial facility or site, the use, expansion or redevelopment of
17which is adversely affected by actual environmental contamination.
AB389-ASA2,58,2018 (b) 1. "Commercial construction" means the act of building any structure, or
19that part of any structure, that is not used as a home, residence or sleeping place by
20one or more persons maintaining a common household to the exclusion of all others.
AB389-ASA2,58,2121 2. "Commercial construction" does not include any of the following:
AB389-ASA2,58,2522 a. Any repair, maintenance, installation or construction of a structure owned
23or used by or for a public utility, or for a customer of a public utility, if the repair,
24maintenance, installation or construction is related to furnishing heat, light, water
25or power to the customer.
AB389-ASA2,59,2
1b. Any construction related to the evaluation, control or remediation of
2hazardous substances; solid, liquid or gaseous wastes; soils; air; or water.
AB389-ASA2,59,43 c. Any construction performed in order to comply with federal, state or local
4environmental laws, regulations, orders or rules.
AB389-ASA2,59,75 (c) "Economic development" means development that is designed to promote
6job growth or retention, expand the property tax base or improve the overall
7economic vitality of a municipality, as defined in s. 30.01 (4), or region.
AB389-ASA2,59,108 (d) "Engage" means to actively participate in the daily operations or daily
9business decisions of an entity. "Engage" does not include taking an action necessary
10to protect an ownership interest in an entity.
AB389-ASA2,59,1111 (dg) "Entity" has the meaning given in s. 180.0103 (8).
AB389-ASA2,59,1212 (dr) "Financial support" includes investments, loans and grants.
AB389-ASA2,59,1313 (e) "Holding company system" has the meaning given in s. 196.795 (1) (i).
AB389-ASA2,59,2014 (f) "Improvements" means any valuable addition made to land, including
15excavations, gradings, foundations, structures, buildings, streets, parking lots,
16sidewalks, sewers, septic systems and drainage facilities. "Improvements" does not
17include any repair, maintenance, installation or construction of structures or
18facilities owned or used by or for a public utility, or by or for a customer of a public
19utility, if the repair, maintenance, installation or construction is related to furnishing
20heat, light, water or power to the customer.
AB389-ASA2,59,2221 (g) "Nonutility affiliate" means a subsidiary of a public utility or a company in
22a holding company system that is not a public utility.
AB389-ASA2,60,223 (h) "Property management" means any activity associated with the care or
24maintenance of land or improvements, including business planning and budgeting,
25accounting, lease administration, tenant relations and retention, security,

1maintenance of common areas, rent collections, financial reporting, service contract
2administration and inspections.
AB389-ASA2,60,103 (hm) "Public utility" means every corporation, company, individual or
4association and their lessees, trustees or receivers appointed by any court or state
5or federal agency, that may own, operate, manage or control all or any part of a plant
6or equipment, within the state, for the production, transmission, delivery or
7furnishing of electricity directly to or for the public, except that "public utility" does
8not include any municipal utility or municipal electric company, as defined in s.
966.073 (3) (d), or any cooperative association organized under ch. 185 for the purpose
10of producing or furnishing heat, light, power or water to its members only.
AB389-ASA2,60,1111 (i) "Real estate practice" has the meaning given in s. 452.01 (6),
AB389-ASA2,60,1412 (j) "Residential construction" means the act of building any structure, or that
13part of any structure that is used as a home, residence or sleeping place by one or
14more persons maintaining a common household to the exclusion of all others.
AB389-ASA2,60,1715 (k) "Residential real estate development" means the act of dividing or
16subdividing any parcel of land for residential construction or making improvements
17to facilitate or allow residential construction.
AB389-ASA2,60,1918 (L) "Third party" means any person other than a public utility or nonutility
19affiliate.
AB389-ASA2,60,21 20(2) Prohibited activities. Except as provided in sub. (4), a public utility or
21nonutility affiliate may not do any of the following in this state:
AB389-ASA2,60,2222 (a) Engage in real estate practice.
AB389-ASA2,60,2323 (b) Engage in residential real estate development.
AB389-ASA2,60,2424 (c) Engage in property management for a 3rd party.
AB389-ASA2,60,2525 (d) Engage in residential or commercial construction.
AB389-ASA2,61,4
1(e) Directly or indirectly own in any chain of successive ownership 50% or more
2of the ownership interest of an entity that engages in property management for a 3rd
3party, real estate practice, residential real estate development or residential or
4commercial construction.
AB389-ASA2,61,6 5(3) Permitted activities. (a) Subsection (2) does not prohibit a public utility
6or nonutility affiliate from doing any of the following:
AB389-ASA2,61,107 1. Repairing, maintaining, installing or constructing a structure that is owned
8or used by or for a public utility or nonutility affiliate, or for a customer of a public
9utility if the repair, maintenance, installation or construction is related to furnishing
10heat, light, water or power to the customer.
AB389-ASA2,61,1311 2. Engaging in construction that is specifically related to the evaluation,
12control or remediation of hazardous substances; solid, liquid or gaseous wastes; soils;
13air; or water.
AB389-ASA2,61,1514 3. Engaging in construction that is performed in order to comply with federal,
15state or local environmental laws, regulations, orders or rules.
AB389-ASA2,61,1716 4. Consulting or making other financial or business arrangements with one or
17more 3rd parties who will engage in commercial construction.
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