Amendment ASA1-AB587

ASSEMBLY SUBSTITUTE AMENDMENT 1, TO 1997 ASSEMBLY BILL 587

March 24, 1998 - Offered by Committee on Small Business and Economic Development.

AB587-ASA1,1,12 An Act to repeal 196.374 (2), 196.795 (5) (q) 1., 196.795 (5) (q) 2. a., 196.795 (5) (q) 2. b., 196.795 (5) (q) 2. c., 196.795 (5) (q) 3., 196.795 (5) (q) 4. and 196.795 (7) (a) 2.; to renumber and amend 196.374 (1), 196.52 (3) (a) and 196.795 (5) (q) 2. (intro.); to amend 196.52 (3) (b) 1., 196.52 (3) (c) 1., 196.52 (3) (c) 2., 196.52 (4) (a), 196.52 (6), 196.59, 196.795 (1) (b), 196.795 (7) (a) 3. and 196.795 (9m); and to create 196.035, 196.374 (1) (a), 196.374 (1r), 196.374 (2m), 196.52 (3) (a) 2., 196.52 (3) (am) 1., 196.52 (3) (d), 196.52 (7m), 196.795 (1) (fm), 196.795 (1) (ik) and 196.795 (1) (im) of the statutes; relating to: separation between certain public utilities and affiliated interests, nonutility activities by public utilities and public utility affiliates, subsidies between utility and nonutility affiliates, utility energy conservation programs and duties, granting rule-making authority and providing a penalty.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB587-ASA1, s. 1 Section 1. 196.035 of the statutes is created to read:

AB587-ASA1,2,3 196.035 Nonutility activities and services; relationship with affiliated interests. (1) Definitions. In this section:

AB587-ASA1,2,8 (a) "Affiliated interest" means a person that is engaged in the performance of energy conservation, plumbing, electrical, heating, ventilating, air conditioning or sheet metalworking contracting services or in an activity related to the sale, lease or service of appliances in this state and that, with respect to a public utility or out-of-state utility, is any of the following:

AB587-ASA1,2,10 1. A person owning or holding directly or indirectly 5% or more of the voting securities of the public utility or out-of-state utility.

AB587-ASA1,2,12 2. A person in any chain of successive ownership of 5% or more of voting securities of the public utility or out-of-state utility.

AB587-ASA1,2,16 3. A corporation 5% or more of whose voting securities is owned by any person owning 5% or more of the voting securities of the public utility or out-of-state utility or by any person in any chain of successive ownership of 5% or more of voting securities of the public utility or out-of-state utility.

AB587-ASA1,3,2 4. A corporation operating the public utility or out-of-state utility or a servicing organization for furnishing supervisory, construction, engineering, accounting, legal and similar services to the public utility or out-of-state utility, which has one or more officers or one or more directors in common with the public utility or out-of-state utility, and any other corporation which has directors in common with the public utility or out-of-state utility if the number of such directors of the corporation is more than one-third of the total number of the public utility's or out-of-state utility's directors.

AB587-ASA1,3,7 5. A person whom the commission determines as a matter of fact after investigation and hearing to be actually exercising any substantial influence over the policies and actions of the public utility or out-of-state utility even if the influence is not based upon stockholding, stockholders, directors or officers as specified under subds 1. to 4.

AB587-ASA1,3,14 6. A person whom the commission determines as a matter of fact after investigation and hearing to be actually exercising substantial influence over the policies and actions of the public utility or out-of-state utility in conjunction with one or more other persons with whom they are related by ownership or blood relationship or by action in concert that together they are affiliated with the public utility or out-of-state utility, even though no one of them alone is so affiliated under subds. 1 to 5.

AB587-ASA1,3,16 7. A person 5% or more of the securities of which are directly or indirectly owned by the public utility or out-of-state utility.

AB587-ASA1,3,17 (b) "Appliance" has the meaning given in s. 196.795 (1) (b).

AB587-ASA1,3,20 (bg) "Cooperative association" means a cooperative association organized under ch. 185 for the purpose of producing, transmitting, delivering or furnishing heat, light, power, natural gas or water to its members only.

AB587-ASA1,3,21 (bL) "Municipal electric company" has the meaning given in s. 66.073 (3) (d).

AB587-ASA1,3,22 (bm) "Municipality" means a city, village or town.

AB587-ASA1,3,24 (br) 1. "Out-of-state utility" means a person that is not a public utility and that is any of the following:

AB587-ASA1,4,3 a. A person that is engaged in the production, transmission, delivery or furnishing of heat, light, power or natural gas either directly or indirectly to or for the use of the public in another state.

AB587-ASA1,4,5 b. A lessee, trustee or court-appointed receiver of a person specified in subd. 1. a.

AB587-ASA1,4,9 c. A person that, in any chain of successive ownership, directly or indirectly as a beneficial owner, owns, controls or holds 5% or more of the outstanding voting securities or other voting interest of a person specified in subd. 1. a., with the unconditional power to vote the securities or interest.

AB587-ASA1,4,12 2. "Out-of-state utility" does not include a person specified in subd. 1. a. that is, or is owned or wholly operated by, a municipal electric company, municipality or cooperative association.

AB587-ASA1,4,13 (c) 1. "Public utility" means any of the following:

AB587-ASA1,4,16 a. A person that is engaged in the production, transmission, delivery or furnishing of heat, light, power or natural gas either directly or indirectly to or for the use of the public in this state.

AB587-ASA1,4,18 b. A lessee, trustee or court-appointed receiver of a person specified in subd. 1. a.

AB587-ASA1,4,21 2. "Public utility" does not include a person specified in subd. 1. a. that is, or is owned or wholly operated by, a municipal electric company, municipality or cooperative association.

AB587-ASA1,4,22 (2) In general. Except as provided in subs. (3) and (5):

AB587-ASA1,4,24 (a) A public utility may not engage in an activity related to the sale, leasing or service of appliances.

AB587-ASA1,5,4 (b) A public utility may not engage in the performance of an energy conservation, plumbing, electrical, heating, ventilating, air conditioning or sheet metalworking contracting service unless the service is performed in or on exempt real property, as defined in s. 196.795 (1) (fm).

AB587-ASA1,5,9 (3) Emergency appliance service work. A public utility shall engage in appliance service work in response to circumstances that reasonably appear to the public utility to endanger property or human health or life. The commission shall promulgate rules setting standards for a public utility to use in determining whether property or human health or life is endangered.

AB587-ASA1,5,12 (5) Contracts or arrangements with affiliated interests. Except as provided in sub. (6), a public utility may provide services to an affiliated interest pursuant to a contract or arrangement approved under s. 196.52.

AB587-ASA1,5,14 (5m) Voting securities. A public utility may acquire the voting securities or other voting interest of an affiliated interest only in exchange for cash.

AB587-ASA1,5,16 (6) Separation between public utilities and affiliated interests. (a) In general. 1. A public utility may not do any of the following:

AB587-ASA1,5,18 a. Except as provided in subd. 4. a., share with or lease, sell or transfer to an affiliated interest any building, office space, equipment or research.

AB587-ASA1,5,22 am. Share with or lease, sell or transfer to an affiliated interest any service or system related to appliances or any energy conservation, plumbing, electrical, heating, ventilating, air conditioning or sheet metalworking contracting service or system.

AB587-ASA1,5,24 b. Allow an affiliated interest access to the public utility's computer or other information systems.

AB587-ASA1,6,2 c. Share or subsidize the costs of an affiliated interest's research and development activities.

AB587-ASA1,6,3 d. Jointly purchase with an affiliated interest any goods or services.

AB587-ASA1,6,5 e. Jointly use with an affiliated interest any system for support or corporate oversight or governance.

AB587-ASA1,6,6 1m. An affiliated interest may not do any of the following:

AB587-ASA1,6,9 a. Except as provided in subd. 4. b., share with or lease, sell or transfer to a public utility or out-of-state utility any building, office space, equipment or research in this state.

AB587-ASA1,6,13 am. Share with or lease, sell or transfer to a public utility or out-of-state utility any service or system in this state related to appliances or energy conservation, plumbing, electrical, heating, ventilating, air conditioning or sheet metalworking contracting service or system in this state.

AB587-ASA1,6,15 b. Allow a public utility or out-of-state utility access to the affiliated interest's computer or other information systems in this state.

AB587-ASA1,6,17 c. Share or subsidize the costs of the research and development activities in this state of a public utility or out-of-state utility.

AB587-ASA1,6,19 d. Jointly purchase with a public utility or out-of-state utility any goods or services for use in this state.

AB587-ASA1,6,21 e. Jointly use in this state with a public utility or out-of-state utility any system for support or corporate oversight or governance.

AB587-ASA1,6,23 3. An affiliated interest and a public utility or out-of-state utility shall maintain separate books and records.

AB587-ASA1,6,25 4. a. A public utility may sell real property to an affiliated interest only by a public sale or by offering the real property to the highest qualified bidder.

AB587-ASA1,7,3 b. An affiliated interest may sell real property in this state to a public utility or out-of-state utility only by a public sale or by offering the real property to the highest qualified bidder.

AB587-ASA1,7,4 (b) Restrictions on employes. 1. A public utility may not do any of the following:

AB587-ASA1,7,5 a. Lease any of its employes to an affiliated interest.

AB587-ASA1,7,6 b. Employ the employes, board members or officers of an affiliated interest.

AB587-ASA1,7,10 c. Employ a person who was formerly employed by an affiliated interest during the 180-day period immediately prior to the person's employment by the public utility if the person was not employed by the affiliated interest for the entire 180-day period.

AB587-ASA1,7,11 1m. An affiliated interest may not do any of the following:

AB587-ASA1,7,13 a. Lease any of its employes in this state to a public utility or out-of-state utility.

AB587-ASA1,7,15 b. Employ in this state the employes, board members or officers of a public utility or out-of-state utility.

AB587-ASA1,7,20 c. Employ a person in this state who was formerly employed by a public utility or out-of-state utility with which the affiliated interest is affiliated during the 180-day period immediately prior to the person's employment by the affiliated interest if the person was not employed by the public utility or out-of-state utility for the entire 180-day period.

AB587-ASA1,7,23 3. A public utility shall provide an annual report to the commission that describes its employment of persons formerly employed by an affiliated interest of the public utility.

AB587-ASA1,7,24 (c) Marketing activities. 1. A public utility may not do any of the following:

AB587-ASA1,7,25 a. Promote or advertise its affiliation with an affiliated interest.

AB587-ASA1,8,1 b. Use the brand name, trademark or logo of an affiliated interest.

AB587-ASA1,8,3 c. Use any type of marketing identification that resembles a type used by an affiliated interest.

AB587-ASA1,8,4 d. Provide any information about its customers to an affiliated interest.

AB587-ASA1,8,7 e. Participate with an affiliated interest in any marketing activity, including advertising, sales calls, proposals to existing or potential customers or trade shows, conferences or similar events.

AB587-ASA1,8,8 1m. An affiliated interest may not do any of the following:

AB587-ASA1,8,10 a. Promote or advertise in this state its affiliation with a public utility or out-of-state utility.

AB587-ASA1,8,12 b. Use in this state the brand name, trademark or logo of a public utility or out-of-state utility.

AB587-ASA1,8,14 c. Use in this state any type of marketing identification that resembles a type used by a public utility or out-of-state utility.

AB587-ASA1,8,16 d. Provide any information about its customers in this state to a public utility or out-of-state utility.

AB587-ASA1,8,19 e. Participate with a public utility or out-of-state utility in any marketing activity in this state, including advertising, sales calls, proposals to existing or potential customers or trade shows, conferences or similar events.

AB587-ASA1,8,22 2. A public utility may not provide an affiliated interest with advertising or promotional space on any form of communication, including a bill envelope, to a customer or potential customer of the public utility.

AB587-ASA1,8,25 (d) Nondiscrimination. 1. A public utility may not treat its customers who are also customers of an affiliated interest any differently than the public utility treats its customers who are not also customers of an affiliated interest.

AB587-ASA1,9,4 2. An affiliated interest may not treat its customers in this state who are also customers of a public utility or out-of-state utility with which the affiliated interest is affiliated any differently than the affiliated interest treats its customers who are not customers of the public utility or out-of-state utility.

AB587-ASA1,9,8 (e) Providing certain information to customers. Except as directed by the commission, a public utility may not provide its customers with any information about persons who provide heating, ventilating, air conditioning, plumbing or electrical services or who sell, lease or repair appliances.

AB587-ASA1,9,14 (7) Private cause of action and forfeiture. A public utility or affiliated interest that violates this section or rules promulgated under this section is liable to any person injured by the violation for 3 times the amount of damages incurred as a result of the violation, together with costs and, notwithstanding s. 814.04 (1), reasonable attorney fees, and shall forfeit $2,000 for each violation. Each day of violation is a separate violation.

AB587-ASA1, s. 2 Section 2. 196.374 (1) of the statutes is renumbered 196.374 (1) (intro.) and amended to read:

AB587-ASA1,9,17 196.374 (1) (intro.) In this section "utility":

AB587-ASA1,9,18 (b) "Utility" means a class A gas or electric utility, as defined by the commission.

AB587-ASA1,9,25 (1g) Every utility shall spend annually contribute at least 0.5% of its total annual operating revenues on to fund the programs designed to promote and accomplish energy conservation established by the commission under sub. (1r) (a). The commission may require a utility to spend annually for the purpose of promoting and accomplishing energy conservation, contribute an amount which is more or less than 0.5% of its annual operating revenues if, after notice and hearing, the commission finds that the expenditure of such amount requirement is in the public interest. Except as provided in s. 196.035 (2) (b) or sub. (1r) (b), a utility, other than a municipal utility, may not provide energy conservation services to consumers, either directly or through a contract or any other arrangement with another person.

AB587-ASA1, s. 3 Section 3. 196.374 (1) (a) of the statutes is created to read:

AB587-ASA1,10,7 196.374 (1) (a) "Municipal utility" means a utility that is, or is owned or wholly operated by, a municipal electric company, as defined in s. 66.073 (3) (d), or a city, village or town.

AB587-ASA1, s. 4 Section 4. 196.374 (1r) of the statutes is created to read:

AB587-ASA1,10,15 196.374 (1r) (a) The commission shall establish programs funded under sub. (1g) that promote and, to the extent practicable, accomplish energy conservation. The commission shall develop a request-for-proposals procedure for selecting persons to administer or implement the programs established under this paragraph. Except as provided in par. (b), a utility, other than a municipal utility, may not participate in the administration or implementation of a program established under this paragraph.

AB587-ASA1,10,19 (b) The commission may require a utility, other than a municipal utility, to administer or implement a program established under par. (a) for low-income customers. The commission shall promulgate a rule that defines "low-income customers" for purposes of this paragraph.