AB133-SSA1-SA1,337,16
161m. Means a person that satisfies each of the following:
AB133-SSA1-SA1,337,2020
196.485
(1) (dm) 2. Does not include the transmission company.
AB133-SSA1-SA1, s. 2335th
21Section 2335th. 196.485 (1) (dm) 3. of the statutes is renumbered 196.485 (1)
22(dm) 1m. b. and amended to read:
AB133-SSA1-SA1,337,2423
196.485
(1) (dm) 1m. b. The person is not an affiliated interest of a person
24specified in subd.
1. 1m. a.
AB133-SSA1-SA1,338,3
1196.485
(1) (do) "Land right" means any right in real property, including fee
2simple ownership or a right-of-way or easement, that has been acquired for a
3transmission facility that is located or intended to be located on the real property.
AB133-SSA1-SA1,338,75
196.485
(1) (dq) "Manager" means, with respect to a transmission company
6organized as a limited liability company under ch. 183, a manager, as defined in s.
7183.0102 (13), of the transmission company.
AB133-SSA1-SA1,338,119
196.485
(1) (dr) "Merger enforcement policy" means the enforcement policy of
10the federal department of justice and the federal trade commission regarding
11horizontal acquisitions and mergers that are subject to
15 USC 1,
18 or
45.
AB133-SSA1-SA1,338,1613
196.485
(1) (ds) "Midwest independent system operator" means the
14independent system operator the establishment of which the federal energy
15regulatory commission has conditionally authorized in an order issued on September
1616, 1998, or the successor to such independent system operator.
AB133-SSA1-SA1,338,1918
196.485
(1) (dt) "Nontransmission utility security holder" means a security
19holder that is not a transmission utility security holder.
AB133-SSA1-SA1,339,221
196.485
(1) (dv) "Organizational start-up date" means, with respect to a
22transmission company that is organized as a limited liability company under ch. 183,
23the date on which the articles of organization become effective under s. 183.0111 or,
24with respect to a transmission company that is organized as a corporation under ch.
1180, the date on which the articles of incorporation become effective under s.
2180.0123.
AB133-SSA1-SA1,339,54
196.485
(1) (em) "Retail electric cooperative" means a cooperative that provides
5retail electric service to its members.
AB133-SSA1-SA1,339,107
196.485
(1) (fe) "Security" means, with respect to a transmission company
8organized as a corporation under ch. 180, a share, as defined in s. 180.0103 (15), and,
9with respect to a transmission company organized as a limited liability company
10under ch. 183, a limited liability company interest, as defined in s. 183.0102 (11).
AB133-SSA1-SA1,339,1812
196.485
(1) (ge) "Transmission company" means a corporation organized under
13ch. 180 or a limited liability company organized under ch. 183 that has as its sole
14purpose the planning, constructing, operating, maintaining and expanding of
15transmission facilities that it owns to provide for an adequate and reliable
16transmission system that meets the needs of all users that are dependent on the
17transmission system and that supports effective competition in energy markets
18without favoring any market participant.
AB133-SSA1-SA1,339,2220
196.485
(1) (gm) "Transmission dependent utility" means an electric utility
21that is not a transmission utility and that is dependent on the transmission system
22of another person for delivering electricity to the public utility's customers.
AB133-SSA1-SA1,340,224
196.485
(1) (j) "Transmission utility security holder" means a person that is a
25security holder of a transmission company, is an investor-owned transmission utility
1in the transmission area and has contributed its transmission facilities to the
2transmission company.
AB133-SSA1-SA1,340,84
196.485
(1m) Duty to provide transmission service. (a) The duty of any
5electric utility that has contributed its transmission facilities to the transmission
6company to finance, construct, maintain or operate a transmission facility shall
7terminate on the date, as determined by the commission under sub. (2) (d), that the
8transmission company begins operations.
AB133-SSA1-SA1,340,139
(b) After beginning operations, the transmission company shall have the
10exclusive duty to provide transmission service in those areas in which transmission
11facilities have been contributed. The duty under this paragraph shall terminate on
12the date, as determined by the commission under sub. (2) (d), that the Midwest
13independent system operator begins operations.
AB133-SSA1-SA1,340,1814
(c) After beginning operations, the Midwest independent system operator shall
15have the exclusive duty to provide transmission service in the transmission area and
16shall ensure that each transmission facility in the transmission area that is under
17its operational control is planned, constructed, operated, maintained and controlled
18as part of a single transmission system.
AB133-SSA1-SA1,341,220
196.485
(2) (a) (intro.) By June 30, 2000, if a transmission utility has not
21transferred control over its transmission facilities to an independent system
22operator that is approved by the applicable federal agency or divested, with approval
23of the applicable federal agency and, for a public utility, the commission, its interest
24in its transmission facilities to an independent transmission owner, the commission
1shall, subject to
par. pars. (am)
and (ar), order the transmission utility to apply to the
2applicable federal agency to do one of the following:
AB133-SSA1-SA1,341,114
196.485
(2) (ar) The commission shall waive the requirement to issue an order
5against a transmission utility under par. (a) if the transmission utility shows, to the
6satisfaction of the commission, that a transfer of its transmission facilities to the
7Midwest independent system operator may have the effect of jeopardizing the
8tax-exempt status of the transmission utility or its securities under the Internal
9Revenue Code. A waiver under this paragraph shall be in effect until the commission
10determines that the proposed transfer does not have the effect described in this
11paragraph.
AB133-SSA1-SA1,341,1913
196.485
(2) (bx) If the Midwest system operator fails to commence operations
14or ceases operations, the requirements of this section that apply to the Midwest
15independent system operator shall apply to any other independent system operator
16or regional transmission organization that is authorized under federal law to operate
17in this state. The commission shall require that any transfer of transmission
18facilities to such independent system operator or regional transmission organization
19satisfies the requirements of this section.
AB133-SSA1-SA1,341,2121
196.485
(2) (d) The commission shall determine each of the following:
AB133-SSA1-SA1,341,2222
1. The date on which the transmission company begins operations.
AB133-SSA1-SA1,341,2423
2. Whether the Midwest independent system operator has begun operations
24and the date on which such operations have begun.
AB133-SSA1-SA1,342,32
196.485
(3m) Transmission company. (a)
Duties. 1. The transmission company
3shall do each of the following:
AB133-SSA1-SA1,342,54
a. Apply for any approval under state or federal law that is necessary for the
5transmission company to begin operations no later than November 1, 2000.
AB133-SSA1-SA1,342,126
b. Subject to any approval required under state or federal law, contract with
7each transmission utility that has transferred transmission facilities to the
8transmission company for the transmission utility to provide reasonable and
9cost-effective operation and maintenance services to the transmission company
10during the 3-year period after the transmission company first begins operations.
11The transmission company and a transmission utility may, subject to any approval
12required under federal or state law, agree to an extension of such 3-year period.
AB133-SSA1-SA1,342,1813
c. Assume the obligations of a transmission utility that has transferred
14ownership of its transmission facilities to the transmission company under any
15agreement by the transmission utility to provide transmission service over its
16transmission facilities or credits for the use of transmission facilities, except that the
17transmission company may modify such an agreement to the extent allowed under
18the agreement and to the extent allowed under state or federal law.
AB133-SSA1-SA1,342,2419
d. Apply for membership in the Midwest independent system operator as a
20single zone for pricing purposes that includes the transmission area and, upon a
21determination by the commission under sub. (2) (d) that the Midwest independent
22system operator has begun operations, transfer operational control of the
23transmission company's transmission facilities to the Midwest independent system
24operator.
AB133-SSA1-SA1,343,6
1e. Remain a member of the Midwest independent system operator, or any
2independent system operator or regional transmission organization that has been
3approved under federal law to succeed the Midwest independent system operator, for
4at least the 6-year transition period that is specified in the agreement conditionally
5approved by the federal energy regulatory commission that establishes the Midwest
6independent system operator.
AB133-SSA1-SA1,343,87
f. Except as provided in subd. 4., elect to be included in a single zone for the
8purpose of any tariff administered by the Midwest independent system operator.
AB133-SSA1-SA1,343,99
2. The transmission company may not do any of the following:
AB133-SSA1-SA1,343,1310
a. Sell or transfer its assets to, or merge its assets with, another person, unless
11the assets are sold, transferred or merged on an integrated basis and in a manner
12that ensures that the transmission facilities in the transmission area are planned,
13constructed, operated, maintained and controlled as a single transmission system.
AB133-SSA1-SA1,343,1514
b. Bypass the distribution facilities of an electric utility or provide electric
15service directly to a retail customer.
AB133-SSA1-SA1,343,2116
c. Own electric generation facilities or sell, market or broker electric capacity
17or energy in a relevant wholesale or retail market as determined by the commission,
18except that, if authorized or required by the federal energy regulatory commission,
19the transmission company may procure or resell ancillary services obtained from 3rd
20parties, engage in redispatch activities that are necessary to relieve transmission
21constraints or operate a control area.
AB133-SSA1-SA1,344,222
3. Notwithstanding subd. 1. a., the transmission company may not begin
23operations until it provides an opinion to the commission from a nationally
24recognized investment banking firm that the transmission company is able to
1finance, at a reasonable cost, its start-up costs, working capital and operating
2expenses and the cost of any new facilities that are planned.
AB133-SSA1-SA1,344,163
4. If the transmission charges or rates of any transmission utility in the
4transmission area are 10% or more below the average transmission charges or rates
5of the transmission utilities in the transmission area on the date, as determined by
6the commission, that the last public utility affiliate files a commitment with the
7commission under sub. (5) (a) 2., the transmission company shall, after consulting
8with each public utility affiliate that has filed a commitment under sub. (5) (a) 2.,
9prepare a plan for phasing in a combined single zone rate for the purpose of pricing
10network use by users of the transmission system operated by the Midwest
11independent system operator and shall seek plan approval by the federal energy
12regulatory commission and the Midwest independent system operator. A plan under
13this subdivision shall phase in an average-cost price for the combined single zone in
14equal increments over a 5-year period, except that, under the plan, transmission
15service shall be provided to all users of the transmission system on a single-zone
16basis during the phase-in period.
AB133-SSA1-SA1,344,1717
(b)
Powers. The transmission company may do any of the following:
AB133-SSA1-SA1,344,2418
1. Subject to the approval of the commission under s. 196.491 (3), construct and
19own transmission facilities, including high-voltage transmission lines, as defined in
20s. 196.491 (1) (f), in the transmission area or in any other area of the state in which
21transmission facilities that have been contributed to the transmission company are
22located. This subdivision does not affect the right or duty of an electric utility that
23is not located in the transmission area or that has not contributed its transmission
24facilities to the transmission company to construct or own transmission facilities.
AB133-SSA1-SA1,345,3
12. Subject to any approval required under state or federal law, purchase or
2acquire transmission facilities in addition to the transmission facilities contributed
3under sub. (5) (b).
AB133-SSA1-SA1,345,74
(c)
Organization. The articles of organization, as defined in s. 183.0102 (1), of
5a transmission company that is organized as a limited liability company under ch.
6183 or the bylaws of a transmission company that is organized as a corporation under
7ch. 180 shall provide for each of the following:
AB133-SSA1-SA1,345,138
1. That the transmission company has no less than 5 nor more than 14
9managers or directors, except that the articles of organization or bylaws may allow
10the requirements of this subdivision to be modified upon a unanimous vote of the
11managers or directors during the 10-year period after the organizational start-up
12date or upon a two-thirds vote of the board of directors or managers after such
1310-year period.
AB133-SSA1-SA1,345,1814
2. That at least 4 managers or directors of the transmission company have
15staggered 4-year terms, are elected by a majority vote of the security holders and are
16not directors, employes or independent contractors of a person engaged in the
17production, sale, marketing, transmission or distribution of electricity or natural gas
18or of an affiliate of such a person.
AB133-SSA1-SA1,345,2119
3. That, during the 10-year period after the organizational start-up date, each
20of the following is satisfied, subject to the limitation on the number of managers or
21directors under subd. 1.:
AB133-SSA1-SA1,346,222
a. Each nontransmission utility security holder that owns 10% or more of the
23outstanding voting securities of the transmission company may appoint one
24manager or director of the transmission company for a one-year term, except that
1the requirements of this subd. 3. a. may be modified upon a unanimous vote of the
2managers or directors.
AB133-SSA1-SA1,346,93
b. Each group of nontransmission utility security holders that, as a group, owns
410% or more of the outstanding voting securities of the transmission company may
5appoint one manager or director of the transmission company for a one-year term
6if the group has entered into a written agreement regarding the appointment and the
7group files the agreement with the secretary of the transmission company, except
8that the requirements of this subd. 3. b. may be modified upon a unanimous vote of
9the managers or directors.
AB133-SSA1-SA1,346,1310
c. Each person that receives at least 5% of the voting securities of the
11transmission company under sub. (6) (a) or (b) may appoint one manager or director
12of the transmission company for a one-year term if the person continues to hold at
13least a 5% equity interest in the transmission company during the one-year term.
AB133-SSA1-SA1,346,1514
d. Each transmission utility security holder may appoint one manager or
15director of the transmission company for a one-year term.
AB133-SSA1-SA1,347,216
4. That, during the 5-year period after the organizational start-up date, no
17public utility affiliate that contributes transmission facility assets to the
18transmission company under sub. (5) (b) and no affiliate of such a public utility
19affiliate may increase its percentage share of the outstanding securities of the
20transmission company prior to any initial issuance of securities by the transmission
21company to any 3rd party other than a 3rd party exercising its right to purchase
22securities under sub. (6) (b), except that this subdivision does not apply to securities
23that are issued by the transmission company in exchange for transmission facilities
24that are contributed in addition to the transmission facilities that are contributed
1under sub. (5) (b) and except that the requirements of this subdivision may be
2modified upon a unanimous vote of the managers or directors.
AB133-SSA1-SA1,347,63
5. That, beginning 3 years after the organizational start-up date, any holder
4of 10% or more of the securities of the transmission company may require the
5transmission company to comply with any state or federal law that is necessary for
6the security holder to sell or transfer its shares.
AB133-SSA1-SA1,347,97
(d)
Commission jurisdiction. The transmission company is subject to the
8jurisdiction of the commission except to the extent that it is subject to the exclusive
9jurisdiction of the federal energy regulatory commission.
AB133-SSA1-SA1,347,1411
196.485
(4) (a) (intro.)
A Except as provided in par. (am), a transmission utility
12may not transfer control over, or divest its interest in, its transmission facilities to
13an independent system operator or independent transmission owner unless, to the
14satisfaction of the commission, each of the following requirements is satisfied:
AB133-SSA1-SA1,347,2316
196.485
(4) (am) Each transmission utility in the transmission area that is a
17public utility shall become a member of the Midwest independent system operator
18no later than June 30, 2000, and shall transfer operational control over its
19transmission facilities to the Midwest independent system operator. Each such
20transmission utility that has not contributed its transmission facilities to the
21transmission company shall elect to become part of the single zone for pricing
22purposes within the Midwest independent system operator and any phase-in plan
23prepared under sub. (3m) (a) 4.
AB133-SSA1-SA1,348,4
1196.485
(5) Public utility affiliates. (a)
Asset cap exception. Section 196.795
2(6m) (e) does not apply to the eligible assets of a nonutility affiliate in a holding
3company system unless each public utility affiliate in the holding company system
4does each of the following:
AB133-SSA1-SA1,348,85
1. Petitions the commission and the federal energy regulatory commission to
6approve the transfer of operational control of all the public utility affiliate's
7transmission facilities in this state and in Iowa, Michigan, Minnesota and Illinois to
8the Midwest independent system operator.
AB133-SSA1-SA1,348,159
2. Files with the commission an unconditional, irrevocable and binding
10commitment to contribute, no later than June 30, 2000, all of the transmission
11facilities that the public utility affiliate owns or operates in this state on the effective
12date of this subdivision .... [revisor inserts date], and land rights, to the transmission
13company. A filing under this subdivision shall specify a date no later than June 30,
142000, on which the public utility affiliate will complete the contribution of
15transmission facilities.
AB133-SSA1-SA1,348,2116
3. Files with the commission an unconditional, irrevocable and binding
17commitment to contribute, and to cause each entity into which it merges or
18consolidates or to which it transfers substantially all of its assets to contribute, any
19transmission facility in this state the ownership or control of which it acquires after
20the effective date of this subdivision .... [revisor inserts date], and land rights, to the
21transmission company.
AB133-SSA1-SA1,349,222
4. Notifies the commission in writing that the public utility affiliate has become
23a member of the Midwest independent system operator, has agreed to transfer its
24transmission facilities to the Midwest independent system operator and has
25committed not to withdraw its membership prior to the date on which the public
1utility affiliate contributes transmission facilities to the transmission company
2under par. (b).
AB133-SSA1-SA1,349,73
5. Petitions the commission and the federal energy regulatory commission to
4approve the contributions specified in subds. 2. and 3. and agrees in such a petition
5not to withdraw the petition in the event that the commission or the federal energy
6regulatory commission conditions its approval on changes that are consistent with
7state or federal law.
AB133-SSA1-SA1,349,158
(b)
Contribution of transmission facilities. 1. A public utility affiliate may not
9contribute a transmission facility to the transmission company until the commission
10has reviewed the terms and conditions of the transfer to determine whether the
11transfer satisfies the requirements of this subsection and has issued an order
12approving or modifying the terms and conditions of the transfer. An order under this
13subdivision that modifies the terms and conditions of a transfer may allow a public
14utility affiliate to recover in retail rates any adverse tax consequences of the transfer
15as a transition cost.
AB133-SSA1-SA1,349,1816
2. The transmission company and a public utility affiliate that files a
17commitment to contribute transmission facilities under par. (a) 2. shall structure the
18transfer of the transmission facilities in a manner that satisfies each of the following:
AB133-SSA1-SA1,349,2319
a. The structure of the transfer avoids or minimizes the material adverse tax
20consequences to the public utility affiliate that result from the transfer and avoids
21or minimizes material adverse consequences on public utility rates that do not arise
22out of combining the transmission company's facilities into a single zone in the
23Midwest independent system operator.
AB133-SSA1-SA1,349,2524
b. To the extent practicable, the structure of the transfer satisfies the
25requirements of the Internal Revenue Service for a tax-free transfer.
AB133-SSA1-SA1,350,6
13. The requirements under subd. 2. b. shall, if practicable, be satisfied by the
2transmission company's issuance of a preferred class of securities that provides the
3fixed-cost portion of the resulting capital structure of the transmission company.
4The transmission company shall issue preferred securities under this subdivision on
5a basis that does not dilute the voting rights of the initial security holders relative
6to the value of their initial contributions.
AB133-SSA1-SA1,350,247
4. If the transfer of transmission assets under this paragraph results in a
8capital structure of the transmission company in which the percentage of common
9equity is materially higher than that of the public utility affiliates who made the
10transfer, or if the cost of the fixed-cost portion of the capital structure of the
11transmission company is materially higher than that of the public utility affiliates
12who made the transfer, the public utility affiliates shall enter into a contract with the
13transmission company under which the public utility affiliates agree to accept from
14the transmission company a return on common equity based upon the equity rate of
15return approved by the federal energy regulatory commission and upon an imputed
16capital structure that assigns to a portion of the public utility affiliates' common
17equity holdings an imputed debt return that is consistent with the requirements of
18this subdivision. A contract under this subdivision shall specify that the public
19utility affiliates shall be required to accept the return on common equity described
20in this subdivision only until such time that the federal energy regulatory
21commission determines that the actual capital structure and capital costs of the
22transmission company are appropriate and consistent with industry practice for a
23regulated public utility that provides electric transmission service in interstate
24commerce.
AB133-SSA1-SA1,351,5
15. If, at the time that a public utility affiliate files a commitment under par. (a)
22., the public utility affiliate has applied for or obtained a certificate of public
3convenience and necessity under s. 196.491 (3) or a certificate under s. 196.49 for the
4construction of transmission facilities, the public utility affiliate shall do each of the
5following: