Rule-Making Notices (Hearing Notices)

NOTICE IS GIVEN that pursuant to s. 227.16 (1), Stats., the Commission will hold a public hearing on proposed rule changes to repeal and recreate Chapter PSC 116, relating to a fuel cost rate adjustment process for electric utility service.

Hearing Information

August 4, 2008   Amnicon Falls Hearing Room
Monday   Public Service Commission Bldg.
9:30 a.m.   610 North Whitney Way
  Madison, Wisconsin,

This building is accessible to people in wheelchairs through the Whitney Way (lobby) entrance. Handicapped parking is available on the south side of the building.

The Commission does not discriminate on the basis of disability in the provision of programs, services, or employment. Any person with a disability who needs accommodations to participate in this proceeding or who needs to get this document in a different format should contact James Wagner or Michael Ritsema, as indicated below.

Contact Person

Questions regarding this matter should be directed to James Wagner, Docket Coordinator, [phone], [e-mail]; or Michael Ritsema, [phone], [e-mail]. Media questions should be directed to Tim Le Monds, Director of Governmental and Public Affairs at [phone]. Hearing or speech-impaired individuals may also use the Commission's TTY number; if calling from Wisconsin use [phone], if calling from outside Wisconsin use [phone].

Copy of Proposed Rule

A copy of this entire notice, including the text of the proposed rule, may be accessed from the electronic regulatory filing portion of the Commission's website (psc.wi.gov).

Submission of Written Comments

Any person may submit written comments on these proposed rules. The hearing record will remain open for written comments from the public until Wednesday, August 6, 2008. All written comments must include a reference on the filing to docket 1-AC-224. File by one mode only.

Industry:

File comments using the Electronic Regulatory Filing system. This may be accessed from the Commission's website psc.wi.gov.

Members of the Public:

If filing electronically: Use the Public Comments system or the Electronic Regulatory Filing system. Both of these may be accessed from the Commission's website psc.wi.gov.

If filing by mail, courier, or hand delivery: Address your comments as shown below.

If filing by fax: Send fax comments to [phone]. Fax filing cover sheet must state “Official Filing," the docket number 1-AC-224, and the number of pages (limited to 25 pages for fax comments).

Address comments to:

Sandra J. Paske

Secretary to the Commission

Public Service Commission

P.O. Box 7854

Madison, WI 53707-7854

FAX [phone]

The deadlines for receiving comments are:

Comments Due: Wednesday, August 6, 2008 - Noon

FAX Due: Tuesday, August 5, 2008 - Noon

At the hearing or in written comments, persons are encouraged to address the following:

1. Please quantify the risk associated with the current chapter PSC 116 and the risk associated with the proposed chapter PSC 116.

2. Please describe how the proposed rule achieves or undermines the four goals of these rules as set by the Commission:

•   Insulate electric utilities from the high-risk created by volatile fuel costs.

•   Create incentives for good fuel management practices.

•   Promote rate stability.

•   Minimize the administrative burden to the Commission.

Analysis Prepared by the Public Service Commission

Statutory authority

Sections 196.02 (1) and (3), 196.03 (1), 196.06, 196.20, 196.37, 196.395, and 227.11, Stats.

Statute interpreted

Section 196.20 (4), Stats.

Explanation of agency authority

The Commission may promulgate a rule with respect to a fuel cost rate adjustment process for electric utility service under ss. 196.02 (1) and (3), 196.03 (1), 196.06, 196.20, 196.37, 196.395, and 227.11, Stats. For general rulemaking authority, statutes grant the Commission, “the jurisdiction to supervise and regulate every public utility in this state and to do all things necessary and convenient to its jurisdiction." s. 196.02 (1), Stats. This includes the power to, “adopt reasonable rules to govern its proceedings and to regulate the mode and manner of all inspections, tests, audits, investigations and hearings." s. 196.02 (3), Stats. Also the Commission “may promulgate rules interpreting the provisions of any statute enforced or administered by it, if the agency considers it necessary to effectuate the purpose of the statute. s. 227.11 (2) (a), Stats.

Chapter 196, Stats., confers upon the Commission exclusive authority to establish just and reasonable rates for public utility service. Waukesha Gas & Electric Co. v. Railroad Commission of Wisconsin, 181 Wis. 281, 287, 194 N.W. 846 (1923). The Commission enforces a utility's duty to “furnish reasonably adequate service and facilities" at just and reasonable rates. s. 196.03 (1), Stats. A utility may only increase its rates, “by order of the commission, after an investigation and opportunity for hearing." s. 196.20 (2m), Stats. If the Commission, “finds rates, . . . to be unjust, unreasonable, insufficient . . . or unlawful, the commission shall determine and order reasonable rates . . . to be imposed, observed and followed in the future." s. 196.37 (1), Stats.

In addition to the Commission's broad ratemaking powers, s. 196.20 (4) (c), Stats., states, “[i]f an increase in fuel costs is of an extraordinary or emergency nature, the commission, after a hearing limited in scope to the question of the increase in fuel costs, may grant a rate increase to an electric public utility." s. 196.20 (4) (c), Stats. This subsection diminishes none of the Commission's other powers to investigate and change rates. Therefore with respect to a fuel cost rate adjustment process for electric utility service the Commission has discretion to establish any necessary and convenient process that must include a hearing before rates may increase.

Related statutes or rules

Section 196.20 (4) (a) 2., Stats., relates to the proposed rule because under s. PSC 116.01 (12), “utility" means an “electric public utility" as defined in s. 196.20 (4) (a) 2., Stats. Section 196.192 (2) (a), Stats., related to the proposed rule because under s. PSC 116.02 (1) (d), a payment made in conjunction with retail customer tariffs under s. 196.192 (2) (a), Stats., for voluntary curtailable load is an item that contributes to fuel cost.

Chapter PSC 117 relates to the proposed rule because “opportunity sale," as defined under s. PSC 117.03 (14), is included in the calculation of “energy market sale" under s. PSC 116.02 (1) (c). Also “planning reserve margin," as defined under s. PSC 117.03 (16), is included in the calculation of “energy market purchase" under s. PSC 116.02 (2) (a).

Objective of the rule

The Commission sets the rates a Wisconsin electric public utility may charge customers. During periodic rate case proceedings the Commission finds reasonable forecasts of the utility's revenues and costs and establishes rates designed to give a utility the opportunity to recover its costs plus a reasonable rate of return on equity. Except for the cost of fuel used to generate electricity, significant differences between forecasted and actual costs rarely occur. Significant discrepancies between the predicted and actual fuel cost occur because of the volatile nature of this cost. These shifts in fuel cost may cause rates to become unjust and unreasonable, requiring a rate change.

As early as the 1920s many state utility commissions, including Wisconsin's, allowed a utility to place in its tariff a formula under which rates adjusted automatically according to changes in fuel cost. More than 25 years ago the Wisconsin Legislature prohibited large investor-owned electric utilities from using this automatic adjustment clause by enacting s. 196.20 (4), Stats. Intended to add public scrutiny to the process while recognizing the need for a quick response, this section authorized the Commission to order a rate increase caused by “an increase in fuel costs . . . of an extraordinary or emergency nature, . . . after a hearing limited in scope to the question of the increase in fuel costs." s. 196.20 (4) (c), Stats.

Chapter PSC 116 implements s. 196.20 (4), Stats. Originally promulgated in 1985, the current rule reflects an update in 2002 designed to streamline the fuel cost rate adjustment process and reduce the number of such proceedings. However, once promulgated the rule update met with changed circumstances its design did not address. These circumstances included the following factors that further increase fuel cost volatility: (1) the implementation of Midwest Independent Transmission System Operator?Day 2 Market, (2) increased demand on some fuels, increased transportation costs of some fuels, and (3) the effects of severe weather on the availability of some fuels. This increased volatility has significantly augmented a utility's risk of an unreasonable loss when costs go up and a customer's risk of paying unreasonable rates when costs go down. This situation prompted the Commission to seek a redesign of the fuel cost rate adjustment process that resulted in this Proposed Rule.

Summary of proposed rule

The proposed rule establishes a process by which the rates for the state's large investor-owned electric utilities may be changed to reflect changes in the cost of fuel. The process requires a utility to submit to the Commission an annual fuel cost plan that forecasts, for a one year period, the cost of specified fuel items. These fuel costs include the cost of materials that are converted to electrical energy, as well as items and programs that offset the cost of, or provide less expensive alternatives to, those materials. The Commission reviews each utility's fuel cost plan, and, after a hearing, establishes rates that recognize the cost in the plan.

During the course of the year to which the plan applies, the rule allows a utility to defer discrepancies between the fuel cost forecasted in rates and the actual cost. The rule provides for the Commission to reconcile the difference between the forecasted and the actual, reasonable and prudently incurred fuel cost on an annual basis. After a hearing, the Commission approves a reasonable adjustment to rates to implement this reconciliation. Also during a plan year, the Commission may adjust rates to avoid a reconciliation that causes a material change in rates. However, no utility may obtain a mid-year increase in rates under this provision more than once during a plan year.

Comparison with federal regulations

No comparable federal regulations exist. The proposed rule does not conflict with, overlap, or duplicate other rules or federal regulations.

Comparison with rules in adjacent states

Illinois, Iowa, and Minnesota allow rate regulated utilities to adjust rates based on a formula specified in that state's administrative code and published on the utility's approved tariff. Rates adjusted in this manner do not require a Commission order or hearing. As part of electric restructuring in Illinois, the largest electricity providers opted out of this method of cost recovery.

Michigan allows a utility to escrow discrepancies between the fuel cost forecasted in rates and the actual cost. The Michigan Public Service Commission reconciles the difference between the forecasted and the actual fuel cost on an annual basis and, after a hearing, approves an adjustment to rates to implement this reconciliation. The proposed rule is modeled after the Michigan process.

Initial Regulatory Flexibility Analysis

The rule will have no effect on small business.

Fiscal Estimate

Summary

The proposed rule changes the fuel cost rate adjustment process for electric public utilities. There are no additional costs to state or local government as a result of these changes and there is also no significant financial impact on the private sector.

State fiscal effect

None

Local fiscal effect

None

Fund sources affected

PRO

Affected Ch. 20 appropriations

Section 20.155 (1) (g), Stats.

Long-range fiscal implications

None

Notice of Hearing

Workforce Development

Family Supports, Chs. DWD 12-59

rulemaking_notices CR 08-066 EmR0821 - CR 08-066

NOTICE IS HEREBY GIVEN that pursuant to ss. 49.22 (9) and 227.11 (2) (a), Stats., the Department of Workforce Development proposes to hold a public hearing to consider emergency and permanent rules revising Chapter DWD 40, relating to the establishment of birth cost orders based on child support guidelines.

Hearing Information

July 29, 2008	MADISON
Tuesday	G.E.F. 1 Building, B205
1:30 p.m.	201 E. Washington Avenue

Interested persons are invited to appear at the hearing and will be afforded the opportunity to make an oral presentation of their positions. Persons making oral presentations are requested to submit their facts, views, and suggested rewording in writing.

Visitors to the GEF 1 building are requested to enter through the left East Washington Avenue door and register with the customer service desk. The entrance is wheelchair accessible via a ramp from the corner of Webster Street and East Washington Avenue. If you have special needs or circumstances regarding communication or accessibility at the hearing, please call [phone] at least 10 days prior to the hearing date. Accommodations such as ASL interpreters, English translators, or materials in audio format will be made available on request to the fullest extent possible.

Copies of Proposed Rule

A copy of the proposed rules is available at http://adminrules.wisconsin.gov. This site allows you to view documents associated with this rule's promulgation, register to receive email notification whenever the Department posts new information about this rulemaking order, and submit comments and view comments by others during the public comment period. You may receive a paper copy of the rule or fiscal estimate by contacting:

Elaine Pridgen, Office of Legal Counsel

Department of Children and Families

201 E. Washington Avenue

Madison, WI 53707

[phone] or [e-mail]

Submission of Written Comments