Amendment ASA2-AB389

AB389-ASA2,51,24 196.494 (3) No later than December 31, 2004, the The commission may shall, under this subsection, issue an order requiring an electric utility to construct or procure, on a competitive basis, the construction of transmission facilities specified by the commission in its order if the commission determines that, based on the results of the study under sub. (2), such construction is necessary to relieve a constraint on a transmission system and the construction will materially benefit the customers of the electric utility or other electric utilities or of an independent system operator, as defined in s. 196.485 (1) (d), or independent transmission owner, as defined in s. 196.485 (1) (dm).

AB389-ASA2, s. 67 Section 67. 196.494 (5) of the statutes is created to read:

AB389-ASA2,52,6 196.494 (5) The governor may, on behalf of this state, enter into an interstate compact that establishes a joint process for the states in the upper midwest region of the United States to determine the need for and siting of regional electric transmission facilities that may affect electric service in this state. The governor may not enter into a compact under this subsection unless the compact includes requirements and procedures for establishing each of the following:

AB389-ASA2,52,8 (a) Compliance with each state's environmental and siting standards for transmission facilities.

AB389-ASA2,52,9 (b) A regional need determination for transmission facilities.

AB389-ASA2,52,11 (c) A mechanism for resolving conflicts between the states regarding the siting of transmission facilities.

AB389-ASA2, s. 68 Section 68. 196.52 (3) (a) of the statutes is amended to read:

AB389-ASA2,53,17 196.52 (3) (a) In this subsection, "contract or arrangement" means a contract or arrangement providing for the furnishing of management, supervisory, construction, engineering, accounting, legal, financial or similar services and any contract or arrangement for the purchase, sale, lease or exchange of any property, right, or thing, or for the furnishing of any service, property, right, or thing, other than management, supervisory, construction, engineering, accounting, legal, financial or similar services, but "contract or arrangement" does not include a contract or arrangement under which a transmission utility, as defined in s. 196.485 (1) (i), sells or transfers securities, as defined in s. 196.485 (1) (fe), that have been issued by a transmission company, as defined in s. 196.485 (1) (ge). Except as provided under par. (b), unless and until the commission gives its written approval, any contract or arrangement is not valid or effective if the contract or arrangement is made between a public utility and an affiliated interest after June 7, 1931. Every public utility shall file with the commission a verified copy of any contract or arrangement, a verified summary of any unwritten contract or arrangement, and any contract or arrangement, written or unwritten, which was in effect on June 7, 1931. The commission shall approve a contract or arrangement made or entered into after June 7, 1931, only if it shall clearly appear and be established upon investigation that it is reasonable and consistent with the public interest. The commission may not approve any contract or arrangement unless satisfactory proof is submitted to the commission of the cost to the affiliated interest of rendering the services or of furnishing the property or service to each public utility or of the cost to the public utility of rendering the services or of furnishing the property or service to each affiliated interest. No proof is satisfactory under this paragraph unless it includes the original (or verified copies) of the relevant cost records and other relevant accounts of the affiliated interest, or an abstract of the records and accounts or a summary taken from the records and accounts if the commission deems the abstract or summary adequate. The accounts shall be properly identified and duly authenticated. The commission, where reasonable, may approve or disapprove a contract or arrangement without submission of the cost records or accounts.

AB389-ASA2, s. 69 Section 69. 196.795 (1) (g) 1. of the statutes is amended to read:

AB389-ASA2,53,21 196.795 (1) (g) 1. As a beneficial owner, to take, hold or acquire 5% or more of the outstanding voting securities of a public utility, other than a transmission company, with the unconditional power to vote those securities.

AB389-ASA2, s. 70 Section 70. 196.795 (1) (g) 2. of the statutes is amended to read:

AB389-ASA2,54,2 196.795 (1) (g) 2. To exchange or convert 50% or more of the outstanding voting securities of a public utility, other than a municipality or other political subdivision or a transmission company, for or into the voting securities of a company organized, created, appointed or formed by or at the direction of the public utility or of a subsidiary of such company.

AB389-ASA2, s. 71 Section 71. 196.795 (1) (h) 3. of the statutes is created to read:

AB389-ASA2,54,4 196.795 (1) (h) 3. "Holding company" does not include a transmission company.

AB389-ASA2, s. 72 Section 72. 196.795 (1) (p) of the statutes is created to read:

AB389-ASA2,54,7 196.795 (1) (p) "Transmission company" has the meaning given in s. 196.485 (1) (ge).

AB389-ASA2, s. 73 Section 73. 196.795 (5) (i) 1. of the statutes is amended to read:

AB389-ASA2,54,12 196.795 (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;

AB389-ASA2, s. 74 Section 74. 196.795 (5) (p) 1., 2., 3. and 4. of the statutes are renumbered 196.795 (6m) (b) 1., 2., 3. and 4.

AB389-ASA2, s. 75 Section 75. 196.795 (5) (pm) 1. (intro.) of the statutes is repealed.

AB389-ASA2, s. 76 Section 76. 196.795 (5) (pm) 1. a. of the statutes is renumbered 196.795 (6m) (a) 3.

AB389-ASA2, s. 77 Section 77. 196.795 (5) (pm) 1. b. of the statutes is renumbered 196.795 (6m) (a) 5.

AB389-ASA2, s. 78 Section 78. 196.795 (5) (pm) 1. c. of the statutes is renumbered 196.795 (6m) (a) 6.

AB389-ASA2, s. 79 Section 79. 196.795 (5) (pm) 2. of the statutes is renumbered 196.795 (6m) (c) and amended to read:

AB389-ASA2,55,4 196.795 (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).

AB389-ASA2, s. 80 Section 80. 196.795 (5) (pm) 3. of the statutes is renumbered 196.795 (6m) (d) and amended to read:

AB389-ASA2,55,10 196.795 (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.

AB389-ASA2, s. 81 Section 81. 196.795 (6m) (title) of the statutes is created to read:

AB389-ASA2,55,12 196.795 (6m) (title) Asset cap.

AB389-ASA2, s. 82 Section 82. 196.795 (6m) (a) (intro.) of the statutes is created to read:

AB389-ASA2,55,14 196.795 (6m) (a) Definitions. (intro.) In this subsection:

AB389-ASA2, s. 83 Section 83. 196.795 (6m) (a) 1. of the statutes is created to read:

AB389-ASA2,55,18 196.795 (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).

AB389-ASA2, s. 84 Section 84. 196.795 (6m) (a) 2. of the statutes is created to read:

AB389-ASA2,55,21 196.795 (6m) (a) 2. "Eligible asset" means an asset of a nonutility affiliate that is used for any of the following:

AB389-ASA2,55,23 a. Producing, generating, transmitting, delivering, selling or furnishing gas, oil, electricity or steam energy.

AB389-ASA2,55,25 b. Providing an energy management, conservation or efficiency product or service or a demand-side management product or service.

AB389-ASA2,56,1 c. Providing an energy customer service, including metering or billing.

AB389-ASA2,56,2 d. Recovering or producing energy from waste materials.

AB389-ASA2,56,3 e. Processing waste materials.

AB389-ASA2,56,6 f. Manufacturing, distributing or selling products for filtration, pumping water or other fluids, processing or heating water, handling fluids or other related activities.

AB389-ASA2,56,7 g. Providing a telecommunications service, as defined in s. 196.01 (9m).

AB389-ASA2, s. 85 Section 85. 196.795 (6m) (a) 4. of the statutes is created to read:

AB389-ASA2,56,11 196.795 (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.

AB389-ASA2, s. 86 Section 86. 196.795 (6m) (b) (title) of the statutes is created to read:

AB389-ASA2,56,13 196.795 (6m) (b) In general.

AB389-ASA2, s. 87 Section 87. 196.795 (6m) (e) of the statutes is created to read:

AB389-ASA2,56,20 196.795 (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.

AB389-ASA2,56,22 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:

AB389-ASA2,56,25 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.

AB389-ASA2,57,1 b. Substantially all of the assets of the nonutility affiliate are eligible assets.

AB389-ASA2,57,7 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.

AB389-ASA2,57,14 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.

AB389-ASA2, s. 88 Section 88. 196.795 (11) (b) of the statutes is amended to read:

AB389-ASA2,58,2 196.795 (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.

AB389-ASA2, s. 89 Section 89. 196.795 (11) (c) of the statutes is created to read:

AB389-ASA2,58,12 196.795 (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., or an asset that is used for manufacturing, distributing or selling swimming pools or spas.

AB389-ASA2, s. 90 Section 90. 196.796 of the statutes is created to read:

AB389-ASA2,58,14 196.796 Real estate activities. (1) In this section:

AB389-ASA2,58,17 (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.

AB389-ASA2,58,20 (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.

AB389-ASA2,58,21 2. "Commercial construction" does not include any of the following:

AB389-ASA2,58,25 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.

AB389-ASA2,59,2 b. Any construction related to the evaluation, control or remediation of hazardous substances; solid, liquid or gaseous wastes; soils; air; or water.

AB389-ASA2,59,4 c. Any construction performed in order to comply with federal, state or local environmental laws, regulations, orders or rules.

AB389-ASA2,59,7 (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.

AB389-ASA2,59,10 (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.

AB389-ASA2,59,11 (dg) "Entity" has the meaning given in s. 180.0103 (8).

AB389-ASA2,59,12 (dr) "Financial support" includes investments, loans and grants.

AB389-ASA2,59,13 (e) "Holding company system" has the meaning given in s. 196.795 (1) (i).

AB389-ASA2,59,20 (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.

AB389-ASA2,59,22 (g) "Nonutility affiliate" means a subsidiary of a public utility or a company in a holding company system that is not a public utility.

AB389-ASA2,60,2 (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.

AB389-ASA2,60,10 (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.

AB389-ASA2,60,11 (i) "Real estate practice" has the meaning given in s. 452.01 (6),

AB389-ASA2,60,14 (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.

AB389-ASA2,60,17 (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.

AB389-ASA2,60,19 (L) "Third party" means any person other than a public utility or nonutility affiliate.

AB389-ASA2,60,21 (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:

AB389-ASA2,60,22 (a) Engage in real estate practice.

AB389-ASA2,60,23 (b) Engage in residential real estate development.

AB389-ASA2,60,24 (c) Engage in property management for a 3rd party.

AB389-ASA2,60,25 (d) Engage in residential or commercial construction.

AB389-ASA2,61,4 (e) Directly or indirectly own in any chain of successive ownership 50% or more of the ownership interest of an entity that engages in property management for a 3rd party, real estate practice, residential real estate development or residential or commercial construction.

AB389-ASA2,61,6 (3) Permitted activities. (a) Subsection (2) does not prohibit a public utility or nonutility affiliate from doing any of the following:

AB389-ASA2,61,10 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.

AB389-ASA2,61,13 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.

AB389-ASA2,61,15 3. Engaging in construction that is performed in order to comply with federal, state or local environmental laws, regulations, orders or rules.

AB389-ASA2,61,17 4. Consulting or making other financial or business arrangements with one or more 3rd parties who will engage in commercial construction.