LRB-0715/1
TKK:jld&wlj:rs
2011 - 2012 LEGISLATURE
May 20, 2011 - Introduced by Representatives Klenke, Nygren, Bernier, Petryk
and Loudenbeck, cosponsored by Senators Hopper, Galloway and Leibham.
Referred to Committee on Energy and Utilities.
AB145,1,3
1An Act to create 196.191 of the statutes;
relating to: authorizing the Public
2Service Commission to approve temporary electric rates to promote economic
3development.
Analysis by the Legislative Reference Bureau
This bill permits the Public Service Commission (PSC) to approve a proposal
by an electric public utility to offer discounted rates to a qualifying industrial
customer specified in the electric public utility's proposal if the PSC determines that
the discounted rates will promote economic development in a service territory of the
electric public utility located in this state.
Under the bill, a prospective customer of the electric public utility with no
industrial operations in this state may qualify for discounted rates if the customer
demonstrates that it will establish operations in this state if it receives the
discounted rates. A current customer of the electric public utility may qualify for
discounted rates if the customer demonstrates that it will increase its energy
consumption in the service territory of the electric public utility located in this state
by 5 percent over its average energy consumption over the previous 36 months. A
current customer of the electric public utility may also qualify for discounted rates
if the customer demonstrates to the satisfaction of the electric public utility that it
will be unable to maintain operations in this state without a discounted rate and it
falls into one of the following categories: 1) the customer has received economic
development assistance of at least $500,000 from a local governmental unit or state
agency within the calendar year preceding a request for a discounted rate from the
electric public utility; or 2) the customer will receive such economic development
assistance within two calendar years following a request for a discounted rate from
the electric public utility.
The PSC must review and either approve or deny a proposal to offer discounted
rates within 90 days after receiving the proposal. If the PSC does not approve the
proposal, the PSC must provide the reasons for its decision and shall permit the
electric public utility to submit a revised proposal.
The bill prohibits a customer from receiving a discounted rate for merely
shifting operations from one electric provider in this state to another electric
provider in this state. Similarly, the bill prohibits a customer from receiving a
discounted rate for increasing the amount of energy purchased from one electric
provider in this state while concurrently or proximately decreasing the amount of
energy purchased from another electric provider in this state. The bill defines
"electric provider" as an electric public utility or retail electric cooperative. Finally,
the bill prohibits a customer from receiving a discounted rate for increasing energy
consumption in one electric public utility service territory located in this state while
decreasing energy consumption in another electric public utility service territory
located in this state.
If the PSC approves the proposal, the electric public utility may offer the
discounted rates for up to five years. The discounted rate would apply only to the
incremental increase in energy usage over the customer's base energy usage. The
bill defines "base energy usage" as the customer's average energy usage over the
previous 12 months. The PSC would be required to ensure that the electric public
utility recovers at least 105 percent of the electric public utility's marginal costs for
providing service to the customer receiving the discounted rate. The PSC must also
ensure that the electric public utility recovers the difference between the discounted
and nondiscounted rates from all of the electric public utility's customers in the
electric public utility's next subsequent rate-making proceeding.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB145, s. 1
1Section
1. 196.191 of the statutes is created to read:
AB145,2,2
2196.191 Temporary rates for economic development. (1) In this section:
AB145,2,63
(a) "Local governmental unit" means a political subdivision of this state, a
4special purpose district in this state, an instrumentality or corporation of such a
5political subdivision or special purpose district, a combination or subunit of any of
6the foregoing, or an instrumentality of this state and any of the foregoing.
AB145,3,2
1(b) "Prospective customer" means a person with no industrial operations in this
2state.
AB145,3,33
(c) "State agency" has the meaning given in s. 101.177 (1) (d).
AB145,3,6
4(2) (a) Subject to sub. (4), the commission may approve a proposal filed by an
5electric public utility to offer discounted rates for a time not to exceed 5 years to a
6prospective customer specified in the proposal if all of the following apply:
AB145,3,107
1. The prospective customer submits a sworn affidavit that demonstrates to the
8satisfaction of the electric public utility that the prospective customer will establish
9industrial operations in this state if the electric public utility offers the discounted
10rates to the prospective customer.
AB145,3,1311
2. The commission determines that the discounted rates will promote economic
12development in a service territory of the electric public utility that is located in this
13state.
AB145,3,1714
(b) Subject to sub. (4), the commission may approve a proposal filed by an
15electric public utility to offer discounted rates for a time not to exceed 5 years to an
16industrial customer of the electric public utility specified in the proposal if all of the
17following apply:
AB145,3,2018
1. The commission determines that the discounted rates will promote economic
19development in a service territory of the electric public utility that is located in this
20state.
AB145,3,2421
2. The customer has received within the most recent calendar year preceding
22a request for a discounted rate or the customer will receive within the 2 calendar
23years following a request for a discounted rate economic development assistance of
24at least $500,000 from a local governmental unit or state agency.
AB145,4,2
13. Subject to par. (d), the customer submits a sworn affidavit to the electric
2public utility indicating all of the following:
AB145,4,63
a. The customer will be unable to maintain or would be required to
4substantially curtail operations in a service territory of the electric public utility that
5is located in this state if the customer did not receive or qualify to receive the
6economic development assistance described in subd. 2.
AB145,4,97
b. The customer will be unable to maintain or would be required to
8substantially curtail operations in a service territory of the electric public utility that
9is located in this state if the customer does not receive the discounted rate.
AB145,4,1710
(c) Subject to sub. (4), the commission may approve a proposal filed by an
11electric public utility to offer discounted rates for a time not to exceed 5 years to an
12industrial customer of the electric public utility specified in the proposal if, subject
13to par. (d), the customer demonstrates to the satisfaction of the electric public utility
14that it will increase its energy consumption in a service territory of the electric public
15utility that is located in this state by an amount equal to at least 5 percent over the
16average of the energy consumed by that customer in that service territory over the
17previous 36 months, but only if the customer receives the discounted rate.
AB145,4,1918
(d) 1. In this paragraph, "electric provider" means an electric public utility or
19a retail electric cooperative, as defined in s. 196.378 (1) (k).
AB145,4,2320
2. The transfer of operations by a customer from one electric provider located
21in this state to another electric provider located in this state for the purpose of
22satisfying the requirements under par. (b) 3. b. or (c) shall render the customer
23ineligible for a discounted rate under par. (b) or (c).
AB145,5,324
3. A customer of more than one electric provider that increases the amount of
25energy purchased from one electric provider located in this state while concurrently
1or proximately decreasing the amount of energy purchased from another electric
2provider located in this state shall not be eligible for a discounted rate under par. (b)
3or (c).
AB145,5,84
4. A customer that increases energy consumption in one service territory of the
5electric public utility that is located in this state while concurrently or proximately
6decreasing energy consumption in another service territory of the electric public
7utility that is located in this state shall not be eligible for a discounted rate under par.
8(b) or (c).
AB145,5,10
9(3) (a) A proposal submitted under this section shall include the marginal costs
10to the electric public utility to provide the proposed discounted rates.
AB145,5,1711
(b) The commission shall review and notify an electric public utility in writing
12whether the commission approves or denies a proposal for discounted rates filed
13under sub. (2) (a), (b), or (c) within 90 days after the commission receives the
14proposal. If the commission does not approve the proposal, the commission shall
15include the reasons in its decision, including identifying modifications that would
16improve the likelihood that the proposal promotes economic development, and shall
17permit the electric public utility to submit a revised proposal.
AB145,5,23
18(4) (a) A discounted rate offered to a customer under this section shall apply
19only to the incremental increase in the customer's energy usage over the customer's
20base energy usage. A customer's base energy usage shall be the customer's average
21energy usage over the 12 months preceding the date on which the electric public
22utility submitted to the commission the initial proposal to offer a discounted rate to
23the customer.
AB145,6,224
(b) If the commission approves a discounted rate under this section, the
25commission shall ensure that the electric public utility recovers at least 105 percent
1of the marginal costs to the electric public utility to provide service to the customer
2receiving the discounted rate under this section.
AB145,6,4
3(5) (a) Nothing in s. 1.12, 196.192, 196.37, or 196.60 prohibits the commission
4from approving a proposal under sub. (2).
AB145,6,95
(b) If the commission approves a proposal for discounted rates filed under sub.
6(2) (a), (b), or (c), the commission shall ensure that the electric public utility recovers
7the difference between the discounted and nondiscounted rates from all customers
8of the electric public utility in the electric public utility's next subsequent
9rate-making proceeding.