1999 Wisconsin Act 9

9,2335ye Section 2335ye. 196.795 (5) (i) 1. of the statutes is amended to read:

196.795 (5) (i) 1. Shall consider the public utility affiliate as a wholly independent corporation and shall impute a capital structure to the public utility affiliate and establish a cost of capital for the public utility affiliate on a stand-alone basis;

9,2335yf Section 2335yf. 196.795 (5) (p) 1., 2., 3. and 4. of the statutes are renumbered 196.795 (6m) (b) 1., 2., 3. and 4.

9,2335yg Section 2335yg. 196.795 (5) (pm) 1. (intro.) of the statutes is repealed.

9,2335yh Section 2335yh. 196.795 (5) (pm) 1. a. of the statutes is renumbered 196.795 (6m) (a) 3.

9,2335yi Section 2335yi. 196.795 (5) (pm) 1. b. of the statutes is renumbered 196.795 (6m) (a) 5.

9,2335yj Section 2335yj. 196.795 (5) (pm) 1. c. of the statutes is renumbered 196.795 (6m) (a) 6.

9,2335yk Section 2335yk. 196.795 (5) (pm) 2. of the statutes is renumbered 196.795 (6m) (c) and amended to read:

196.795 (6m) (c) Wholesale merchant plants. The assets of a wholesale merchant plant shall not be included in the sum of the assets of a public utility affiliate under par. (p) (b) 1. a., b. or c. and shall not be included in a nonutility affiliate's total assets under par. (p) (b) 2. a. if the requirements specified in s. 196.491 (3m) (a) 1. and 2. are satisfied or if the wholesale merchant plant qualifies for the exemption under s. 196.491 (3m) (e).

9,2335yL Section 2335yL. 196.795 (5) (pm) 3. of the statutes is renumbered 196.795 (6m) (d) and amended to read:

196.795 (6m) (d) Foreign affiliates. The assets of a foreign affiliate shall be included in the sum of the assets of a public utility affiliate under par. (p) (b) 1. a., b. or c. and shall not be included in a nonutility affiliate's total assets under par. (p) (b) 2. a.

9,2335ym Section 2335ym. 196.795 (6m) (title) of the statutes is created to read:

196.795 (6m) (title) Asset cap.

9,2335yn Section 2335yn. 196.795 (6m) (a) (intro.) of the statutes is created to read:

196.795 (6m) (a) Definitions. (intro.) In this subsection:

9,2335yo Section 2335yo. 196.795 (6m) (a) 1. of the statutes is created to read:

196.795 (6m) (a) 1. "Contributor public utility affiliate" means a public utility affiliate that has contributed its transmission facilities to the transmission company under s. 196.485 (5) (b).

9,2335yp Section 2335yp. 196.795 (6m) (a) 2. of the statutes is created to read:

196.795 (6m) (a) 2. "Eligible asset" means an asset of a nonutility affiliate that is used for any of the following:

a. Producing, generating, transmitting, delivering, selling or furnishing gas, oil, electricity or steam energy.

b. Providing an energy management, conservation or efficiency product or service or a demand-side management product or service.

c. Providing an energy customer service, including metering or billing.

d. Recovering or producing energy from waste materials.

e. Processing waste materials.

f. Manufacturing, distributing or selling products for filtration, pumping water or other fluids, processing or heating water, handling fluids or other related activities.

g. Providing a telecommunications service, as defined in s. 196.01 (9m).

h. Providing an environmental engineering service.

9,2335yq Section 2335yq. 196.795 (6m) (a) 4. of the statutes is created to read:

196.795 (6m) (a) 4. "Generation assets" means assets that are classified as electric generation assets on the books of account of a public utility, as determined by the commission.

9,2335yr Section 2335yr. 196.795 (6m) (b) (title) of the statutes is created to read:

196.795 (6m) (b) In general.

9,2335ys Section 2335ys. 196.795 (6m) (e) of the statutes is created to read:

196.795 (6m) (e) Contributor public utility affiliates. 1. The eligible assets of a nonutility affiliate in a holding company system that includes each of the contributor public utility affiliates in the holding company system shall not be included in the sum of the assets of the public utility affiliates under par. (b) 1. a., b. or c. and shall not be included in the nonutility affiliate's total assets under par. (b) 2. a.

2. For purposes of subd. 1., all of the assets of a nonutility affiliate shall be considered eligible assets if each of the following is satisfied:

a. The bylaws of the nonutility affiliate or a resolution adopted by its board of directors specifies that the business of the nonutility affiliate is limited to activities involving eligible assets.

b. Substantially all of the assets of the nonutility affiliate are eligible assets.

3. The net book value of transmission facility assets that a contributor public utility affiliate has contributed to a transmission company under s. 196.485 (5) (b) shall be included in the sum of the assets of the public utility affiliate under par. (b) 1. a., b. and c. In determining net book value under this subdivision, accumulated depreciation shall be calculated as if the contributor public utility affiliate had not contributed the assets.

4. The net book value of generation assets that a contributor public utility affiliate has transferred to a person that is not affiliated with the public utility affiliate pursuant to the order of the commission, a court or a federal regulatory agency shall be included in the sum of the assets of the public utility affiliate under par. (b) 1. a., b. and c. In determining net book value under this subdivision, accumulated depreciation shall be calculated as if the contributor public utility affiliate had not transferred the assets.

9,2335ysm Section 2335ysm. 196.795 (7) (a) (intro.) of the statutes is amended to read:

196.795 (7) (a) (intro.) No sooner than the first day of the 36th month after the formation of a holding company and at least once every 3 years thereafter, the commission shall investigate the impact of the operation of every holding company system formed on or after November 28, 1985, on every public utility affiliate in the holding company system and shall determine whether each nonutility affiliate, except for the nonutility affiliates of a holding company that were affiliates of a holding company that was formed before November 28, 1985, does, or can reasonably be expected to do, at least one of the following:

9,2335yt Section 2335yt. 196.795 (11) (b) of the statutes is amended to read:

196.795 (11) (b) This section shall be deemed to legalize and confirm the formation, prior to November 28, 1985, of any holding company, which is not itself a public utility, and shall be deemed to legalize and confirm the operations and issuances of securities of the holding company, except that nothing in this section shall be deemed to prevent the commission from imposing reasonable terms, limitations or conditions on any holding company which are consistent with the requirements of sub. (5) (pm) (6m) (c) or (d) or which are consistent with and necessary to satisfy the requirements of sub. (5) (b) to (o) and (q) to (s) or which relate to future investments by the holding company unless the holding company owns, operates, manages or controls a telecommunications utility and does not also own, operate, manage or control a public utility which is not a telecommunications utility.

9,2335yu Section 2335yu. 196.795 (11) (c) of the statutes is created to read:

196.795 (11) (c) The commission may not impose upon a holding company the formation of which is considered to be legalized and confirmed under par. (b) any term, limitation or condition under par. (b) that establishes the sum of the holding company's nonutility affiliate assets at less than 25% of the sum of the holding company's utility affiliate assets. For purposes of this paragraph, any term, limitation or condition on nonutility affiliate assets shall not apply to the ownership, operation, management or control of any eligible asset, as defined under sub. (6m) (a) 2.

9,2335yum Section 2335yum. 196.796 of the statutes is created to read:

196.796 Real estate activities. (1) In this section:

(a) "Brownfields facility or site" means any abandoned, idle or underused industrial or commercial facility or site, the use, expansion or redevelopment of which is adversely affected by actual environmental contamination.

(b) 1. "Commercial construction" means the act of building any structure, or that part of any structure, that is not used as a home, residence or sleeping place by one or more persons maintaining a common household to the exclusion of all others.

2. "Commercial construction" does not include any of the following:

a. Any repair, maintenance, installation or construction of a structure owned or used by or for a public utility, or for a customer of a public utility, if the repair, maintenance, installation or construction is related to furnishing heat, light, water or power to the customer.

b. Any construction related to the evaluation, control or remediation of hazardous substances; solid, liquid or gaseous wastes; soils; air; or water.

c. Any construction performed in order to comply with federal, state or local environmental laws, regulations, orders or rules.

(c) "Economic development" means development that is designed to promote job growth or retention, expand the property tax base or improve the overall economic vitality of a municipality, as defined in s. 30.01 (4), or region.

(d) "Engage" means to actively participate in the daily operations or daily business decisions of an entity. "Engage" does not include taking an action necessary to protect an ownership interest in an entity.

(dg) "Entity" has the meaning given in s. 180.0103 (8).

(dr) "Financial support" includes investments, loans and grants.

(e) "Holding company system" has the meaning given in s. 196.795 (1) (i).

(f) "Improvements" means any valuable addition made to land, including excavations, gradings, foundations, structures, buildings, streets, parking lots, sidewalks, sewers, septic systems and drainage facilities. "Improvements" does not include any repair, maintenance, installation or construction of structures or facilities owned or used by or for a public utility, or by or for a customer of a public utility, if the repair, maintenance, installation or construction is related to furnishing heat, light, water or power to the customer.

(g) "Nonutility affiliate" means a subsidiary of a public utility or a company in a holding company system that is not a public utility. "Nonutility affiliate" does not include a passively held company.

(gm) "Passively held company" means an entity that satisfies each of the following:

1. Less than 50% of the ownership interest of the entity is directly or indirectly owned in any chain of successive ownership by a public utility or nonutility affiliate.

2. The entity engages in property management for a 3rd party, real estate practice, residential real estate development or residential or commercial construction.

(h) "Property management" means any activity associated with the care or maintenance of land or improvements, including business planning and budgeting, accounting, lease administration, tenant relations and retention, security, maintenance of common areas, rent collections, financial reporting, service contract administration and inspections.

(hm) "Public utility" means every corporation, company, individual or association and their lessees, trustees or receivers appointed by any court or state or federal agency, that may own, operate, manage or control all or any part of a plant or equipment, within the state, for the production, transmission, delivery or furnishing of electricity directly to or for the public, except that "public utility" does not include any municipal utility or municipal electric company, as defined in s. 66.073 (3) (d), or any cooperative association organized under ch. 185 for the purpose of producing or furnishing heat, light, power or water to its members only.

(i) "Real estate practice" has the meaning given in s. 452.01 (6).

(j) "Residential construction" means the act of building any structure, or that part of any structure that is used as a home, residence or sleeping place by one or more persons maintaining a common household to the exclusion of all others.

(k) "Residential real estate development" means the act of dividing or subdividing any parcel of land for residential construction or making improvements to facilitate or allow residential construction.

(L) "Third party" means any person other than a public utility or nonutility affiliate.

(2) Prohibited activities. Except as provided in sub. (4), a public utility or nonutility affiliate may not do any of the following in this state:

(a) Engage in real estate practice.

(b) Engage in residential real estate development.

(c) Engage in property management for a 3rd party.

(d) Engage in residential or commercial construction.

(3) Permitted activities. (a) Subsection (2) does not prohibit a public utility or nonutility affiliate from doing any of the following:

1. Repairing, maintaining, installing or constructing a structure that is owned or used by or for a public utility or nonutility affiliate, or for a customer of a public utility if the repair, maintenance, installation or construction is related to furnishing heat, light, water or power to the customer.

2. Engaging in construction that is specifically related to the evaluation, control or remediation of hazardous substances; solid, liquid or gaseous wastes; soils; air; or water.

3. Engaging in construction that is performed in order to comply with federal, state or local environmental laws, regulations, orders or rules.

4. Consulting or making other financial or business arrangements with one or more 3rd parties who will engage in commercial construction.

5. Consulting or making other financial or business arrangements with one or more 3rd parties who will engage in residential construction or residential real estate development, except that if a public utility or nonutility affiliate contracts for the development of more than one residential construction project or residential real estate development, the public utility or nonutility affiliate may not enter into an exclusive arrangement with a 3rd party for all such residential construction or residential real estate development.

6. Acquiring or disposing of property or interests in property if the acquisition or disposition is related to the operation of a public utility and the acquisition or disposition satisfies one of the following:

a. The acquisition or disposition is conducted under a contract with a 3rd party that is engaged in real estate practice.

b. The acquisition or disposition is conducted by an individual engaged in real estate practice or employed by a public utility.

7. Owning a passively held company.

(b) Subsection (2) does not prohibit a public utility that is not subject to the requirements of s. 196.795, or the nonutility subsidiary of such a public utility, from doing any of the following:

1. Engaging in commercial or residential real estate development or construction on property owned or acquired by the public utility or nonutility subsidiary for a public utility purpose if the total annual revenues from the development or construction do not exceed 3% of the total operating revenues of the public utility in any year.

2. Providing financial support for the purpose of economic development to 3rd parties that are engaged in an activity specified in sub. (2) (a) to (d). The public utility or nonutility subsidiary may profit directly from that activity only through receipt of profits that are incidental to the economic development project or interest earned on a loan.

(4) Exceptions. (a) A nonutility affiliate that has engaged in residential construction prior to, or is engaged in residential construction on, the effective date of this paragraph .... [revisor inserts date], may directly or indirectly own in any chain of successive ownership 50% or more of the ownership interest of an entity that hires a 3rd party to engage in residential construction or commercial construction that is incidental to residential construction, except that the nonutility affiliate may not actively participate in the daily operations or daily business decisions of the entity.

(b) A public utility or nonutility affiliate may engage in residential real estate development at a brownfields facility or site.

(5) Private cause of action. Any public utility or nonutility affiliate that does, causes or permits to be done any action prohibited under this section or fails to comply with any requirement specified in this section is liable to any person injured thereby in the amount of damages sustained in consequence of the prohibited action or failure to comply.