Amendment ASA1-AB632

LRBs0247/2

MDK/JK/RNK:kmg:pg

2003 - 2004 LEGISLATURE

ASSEMBLY SUBSTITUTE AMENDMENT 1, TO 2003 ASSEMBLY BILL 632

November 4, 2003 - Offered by Representatives Jensen, Steinbrink, Ziegelbauer and Powers.

AB632-ASA1,2,2 An Act to repeal 196.491 (3) (g) 1m.; to renumber 85.02 and 196.491 (3) (h); to renumber and amend 30.025 (1), 196.491 (3) (g) 1. and 196.491 (4) (c); to amend 15.795 (1), 16.969 (4), 30.02 (1), 30.02 (2), 30.025 (title), 30.025 (2), 30.025 (3) (intro.), 30.025 (4), 66.0119 (1) (a), 79.04 (7) (c) 1m., 91.75 (4), 196.025 (2) (intro.), 196.491 (3) (a) 1., 196.491 (3) (a) 3. a., 196.491 (3) (b), 196.491 (3) (d) (intro.), 196.491 (3) (e), 196.491 (3) (gm) and 196.491 (3) (j); and to create 1.12 (6), 23.09 (22m), 30.025 (1b), 30.025 (1e), 30.025 (1m), 30.025 (1s) (title), 30.025 (1s) (b), 30.025 (2g), 30.025 (2s), 30.025 (3m), 30.206 (1m), 32.03 (5) (c), 79.04 (6) (c) 3., 79.04 (7) (d), 85.02 (2), 196.02 (5m), 196.025 (1m), 196.025 (2m), 196.20 (7), 196.49 (4), 196.491 (3) (d) 8., 196.491 (3b), 196.491 (4) (c) 2., 196.491 (4) (c) 3. and 196.491 (6) (title) of the statutes; relating to: construction of certain public utility facilities, utility aid payments, utility condemnations, and granting rule-making authority.

Analysis by the Legislative Reference Bureau

This substitute amendment does all of the following: 1) changes requirements for the Public Service Commission (PSC) to approve the construction of certain public utility projects; 2) changes requirements for the Department of Natural Resources (DNR) to issue permits that are required for the construction of certain public utility projects; 3) changes requirements for the PSC and DNR to consider the environmental impacts of such projects; 3) declares a state policy regarding the siting of electric transmission facilities; 4) modifies utility aid payments; and 5) allows electric utilities to negotiate with property owners regarding condemnations.

PSC requirements

Under current law, with certain exceptions, a person may not begin the construction of certain electric generating facilities or high-voltage transmission lines before the PSC has issued a certificate of public convenience and necessity to the person. A "high-voltage transmission line" is defined as a line of more than one mile in length that is designed to operate at 100 or more kilovolts. Current law specifies the procedure that a person must follow to apply for a certificate to construct electric generating facilities or high-voltage transmission lines. In addition, current law specifies the findings that the PSC must make before issuing a certificate.

The substitute amendment changes an exemption under current law that applies to the construction of certain high-voltage transmission lines. Under current law, a certificate is not required if the line operates at 230 or less kilovolts, and if all construction activity takes place entirely within an existing electric transmission right-of-way. The substitute amendment changes the exemption to apply to a line that operates at 345 or less kilovolts. The substitute amendment also provides that construction of a line that qualifies for the exemption may proceed even if it is prohibited by a local ordinance.

The substitute amendment also creates an expedited procedure for obtaining a certificate for constructing a high-voltage transmission line. The procedure applies only if the construction is limited to adding conductors to existing transmission poles or towers and if all construction activity takes place entirely within an existing electric transmission right-of-way. The PSC must promulgate rules for applying for a certificate under the expedited procedure. If the PSC receives an application that complies with the rules, the PSC must, as soon as practicable, notify the applicant that the PSC has received a complete application. After a complete application is received, the applicant is considered to have been issued a certificate, unless the PSC notifies the applicant within 30 days after the PSC receives a complete application that the public interest requires the applicant to obtain the PSC's approval for the construction. If the PSC makes such a notification, the substitute amendment requires the applicant to obtain a certificate that is required under current law for certain public utility construction projects, rather than the certificate of public convenience and necessity that is described above.

In addition, the substitute amendment changes requirements under current law that apply to an application for a certificate to construct an electric generating facility or a high-voltage transmission line that is subject to regulatory approval in another state. Under current law, the PSC must complete action on an application within 180 days after the application is complete. (Current law also provides for an extension of this deadline under certain circumstances.) However, current law creates an exemption from the deadline if another state is also taking action on such a facility or line. This substitute amendment eliminates the exemption to the deadline.

The substitute amendment also makes the following changes:

1. The substitute amendment allows the PSC to use a procedure under current law to obtain an inspection warrant for the purpose of inspecting property to gather information related to preparing or reviewing an application for a certificate described above or a certificate required for certain other nontelecommunications utility projects (such as, for example, the construction of a natural gas pipeline). The substitute amendment specifies that the information that may be gathered includes any information necessary to evaluate environmental features or effects that are relevant to such an application.

2. The substitute amendment allows a county, town, village, or city that receives certain distributions that are funded with fees paid by persons that construct high-voltage transmission lines to use the distributions for any purpose, if the PSC finds that the purpose is in the public interest. Under current law, such distributions may be used only for park, conservancy, wetland, or other similar environmental programs.

3. The substitute amendment requires the PSC to consider whether, to the extent practicable, brownfields are used when a person applies for a certificate to construct electric generating facilities. "Brownfields" are defined as abandoned, idle, or underused industrial or commercial facilities or sites, the expansion or redevelopment of which is adversely affected by actual or perceived environmental contamination.

4. The substitute amendment requires a person who applies for a certificate to construct a high-voltage line to submit a detailed project plan to DNR. Under current law, the type of plan that a person must submit to DNR for such a line is called an engineering plan, instead of a project plan.

5. The substitute amendment requires a person who applies for a certificate of public convenience and necessity for certain electric generating facilities or high-voltage transmission lines to provide a brief description of the anticipated effects of the facility or line on air and water quality, wetlands, solid waste disposal capacity, and other natural resources. Current law limits the description to effects on air and water quality.

DNR requirements

Generally, under current law, a person proposing to construct a utility facility in a manner that requires the placement of a structure in navigable waters or that involves the construction or maintenance of a dam is required to obtain one or more permits from DNR. Current law requires DNR to hold a public hearing before granting certain of these permits. Current law also prohibits a person from discharging dredged or fill material into a nonfederal wetland unless the person is issued a water quality certification by DNR.

Under current law, electric utilities that propose to construct an electric generating facility or high-voltage transmission line adjacent to a waterway may use an optional permit procedure to obtain certain DNR permits. Under that optional procedure, if the utility must obtain more than one permit from DNR relating to the placement of structures in navigable waters or the construction or maintenance of a dam, the utility may, instead of submitting separate applications for the permits, submit an engineering plan to DNR. If the utility submits an engineering plan instead of separate applications for permits, DNR is required to schedule the entire matter for a public hearing, rather than scheduling separate hearings for each permit application. After the hearing, DNR must grant all of the necessary permits if certain conditions are met.

This substitute amendment provides that any utility facility, other than a telecommunications facility, that is required to obtain a certificate from the PSC and that is also required to obtain one or more permits from DNR for the placement of a structure in navigable waters, or for the construction or maintenance of a dam, or to obtain a water quality certification for discharging material in a nonfederal wetland, must use a procedure that requires the utility facility to submit only one application for all of those permits. Under that procedure, a person proposing to construct a utility facility must first notify DNR of its intention to file an application. After DNR receives the notice, DNR must confer with that person and, in cooperation with the PSC, make certain assessments and analyses concerning the project. The substitute amendment provides that once the application is completed, DNR may schedule the matter for a public hearing. The hearing may not be conducted as a contested case hearing. In a contested case, all parties must be given an opportunity for a hearing and must be given the opportunity to present evidence.

Under the substitute amendment, DNR must grant the permits for the utility facility if DNR makes certain findings, including that the proposal complies with certain environmental statutes and that it does not unduly affect public rights and interests in navigable waterways. The substitute amendment requires DNR to grant or deny the application within 30 days of the date on which the PSC issues its decision on the utility's application for a certificate.

The substitute amendment also specifies that as a part of this permit procedure DNR must review the proposed utility facility to assess whether the location, site, or route is capable of meeting the criteria for obtaining the required permits from DNR and must provide this information to the PSC. DNR must also participate in PSC investigations or proceedings relating to the application for a certificate of public convenience and necessity for the utility facility. The substitute amendment provides that if the PSC issues the certificate for that utility facility, after considering DNR's participation in the PSC's proceedings and after considering certain other factors, DNR may not require the applicant to make any further analysis of utility facility alternatives, except that DNR may identify adjustments that may be required to address permitting issues within the location, site, or route for which the certificate is issued.

Under current law, for certain activities affecting navigable waters that are undertaken by riparian owners, or for activities relating to the construction, dredging, or enlarging of certain waterways, DNR may issue general permits authorizing a class of activities. This substitute amendment requires DNR to issue a general permit for the construction of those high-voltage transmission line projects to which the expedited procedure created in this substitute amendment for obtaining a certificate from the PSC applies.

Environmental impacts

Current law requires state agencies, including the PSC and DNR, to consider the environmental impacts of proposed actions, including proposals to issue the certificates, permits, and approvals described above. These requirements were created by the Wisconsin Environmental Policy Act (WEPA). The PSC and DNR have promulgated rules for complying with WEPA. Under these rules, the PSC or DNR must prepare an environmental impact statement (EIS) for major actions that significantly affect the quality of the human environment and an environmental assessment (EA) for actions that have the potential to significantly affect the quality of the human environment. Based on the results of an EA, the PSC or DNR may also prepare an EIS.

The substitute amendment requires the PSC and DNR to coordinate their compliance with WEPA when the PSC and DNR receive applications for certificates, permits, and approvals that are required from both the PSC and DNR for the construction of electric generating facilities and high-voltage transmission lines and certain other nontelecommunications utility projects (such as, for example, construction of a natural gas pipeline). The substitute amendment also requires such coordination when public utilities that are not telecommunications utilities apply to the PSC for certificates authorizing other types of construction projects. Such coordination is also required when a natural gas utility applies to the PSC for a certificate authorizing a project involving switching sources of natural gas supplies.

Under the substitute amendment, if the rules of either the PSC or DNR require the preparation of an EIS for an application for a certificate, permit, or approval described above, the PSC and DNR must cooperatively prepare an EIS. If neither agency's rules require an EIS, but either agency's rules require an EA, the PSC and DNR must cooperatively prepare an EA. The joint EIS or EA that is required under the substitute amendment must include all of the information necessary for both the PSC and DNR to comply with WEPA. In addition, the substitute amendment does not waive the duty of the PSC or DNR to comply with WEPA, except that the PSC and DNR are only required to consider the project that is the subject of the application and one alternative to the project. Under current law, the PSC and DNR must consider more than one alternative under WEPA. In addition, the substitute amendment does not waive any duty of the PSC or DNR to take any other action required by law regarding the project.

The substitute amendment also specifies that the PSC is not required to prepare an EIS for construction of a high-voltage line that does not require a certificate from the PSC. As discussed above, this exemption is changed by the substitute amendment to apply to certain construction activities related to high-voltage transmission lines that operate at 345 or less kilovolts. Although an EIS is not required, the substitute amendment requires the PSC to prepare an EA for construction that is subject to the exemption, but only if the PSC's rules require an EA for the construction.

State policy on siting of electric transmission facilities

Current law makes certain declarations of state energy policy, including goals for conserving energy and meeting energy demands. This substitute amendment declares a new policy regarding the siting of new electric transmission facilities, including high-voltage transmission lines. The substitute amendment provides that, in the siting of such facilities, it is state policy to utilize the following corridors in the following order of priority: 1) existing utility corridors; 2) highway and railroad corridors; 3) recreational trails; and 4) new corridors. The corridors must be utilized in such a manner to the greatest extent feasible that is consistent with economic and engineering considerations, reliability of the electric system, and protection of the environment. Also, recreational trails must be utilized to the extent that facilities may be constructed below ground and do not significantly impact environmentally sensitive areas.

The substitute amendment also directs the PSC, DNR, and Department of Transportation to implement the policy described above in making all decisions, rules, and orders affecting the siting of new electric transmission facilities.

Utility aid payment

Under current law, generally, each municipality and county in which a power production plant is located annually receives utility aid payments based on the net value of the production plant. Beginning with utility aid payments in 2005, each municipality and county in which a production plant is located will receive a payment based on the megawatt capacity of the production plant, if the plant began operating after December 31, 2003. If a plant is located in more than one municipality, the payment is divided among the municipalities in which the plant is located based on the net value of that portion of the plant located in each municipality. Under this substitute amendment, if a plant is located in more than one county, the payment is divided among the counties in which the plant is located based on the net value of that portion of the plant located in each county.

Under current law, for production plants that begin operating after December 31, 2003, each municipality and county in which such a production plant is located may receive an additional utility aid payment based on the production plant's megawatt capacity if the plant is built on the site of an existing or decommissioned production plant or on brownfields or if the plant is a baseload electric generating facility, derives energy from an alternative energy resource, or is a cogeneration production plant. Under this substitute amendment, if such a production plant is located in more than one municipality or county, the payment is divided among the municipalities or counties in which the plant is located based on the net value of that portion of the plant located in each municipality or county.

Under current law, a county or municipality that receives a utility aid payment based on a cogeneration production plant located in the county or municipality may not receive a payment based on a production plant that derives energy from an alternative energy resource and that is located in the county or municipality. Under this substitute amendment, a county or municipality that receives a utility aid payment based on a cogeneration production plant located in the county or municipality may also receive a payment based on a production plant that derives energy from an alternative energy resource, if the production plant that derives energy from an alternative energy resource is not the cogeneration production plant.

Under this substitute amendment, generally, an electric public utility may not recover in rates the cost of any payments paid to a local unit of government to mitigate the impact of an electric generating facility on the local unit of government, unless the agreement providing for the payments is received by the PSC before June 10, 2003, and the PSC finds the agreement to be reasonable.

Under current law, electric utilities (and other public utilities) are allowed, under certain circumstances, to acquire property by condemnation. For construction by an electric utility that requires a certificate of public convenience and necessity from the PSC, current law provides that the utility's authority to condemn property for the construction does not exist until the certificate is issued.

This substitute amendment allows an electric utility to negotiate with a property owner before a certificate is issued. However, the electric utility must advise the property owner that the electric utility does not have the right to condemn the property until the certificate is issued.

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

AB632-ASA1, s. 1 Section 1. 1.12 (6) of the statutes is created to read:

AB632-ASA1,7,7 1.12 (6) Siting of electric transmission facilities. In the siting of new electric transmission facilities, including high-voltage transmission lines, as defined in s. 196.491 (1) (f), it is the policy of this state that, to the greatest extent feasible that is consistent with economic and engineering considerations, reliability of the electric system, and protection of the environment, the following corridors should be utilized in the following order of priority:

AB632-ASA1,7,8 (a) Existing utility corridors.

AB632-ASA1,8,1 (b) Highway and railroad corridors.

AB632-ASA1,8,4 (c) Recreational trails, to the extent that the facilities may be constructed below ground and that the facilities do not significantly impact environmentally sensitive areas.

AB632-ASA1,8,5 (d) New corridors.

AB632-ASA1, s. 2 Section 2. 15.795 (1) of the statutes is amended to read: