AB389: Bill Text

AB389,50,10 (bm) Lease of transmission facilities. If a public utility affiliate is not able to contribute its transmission facilities to the transmission company as required under par. (b) due to merger-related accounting requirements, the public utility affiliate shall transfer the transmission facilities to the transmission company under a lease for the period of time during which the accounting requirements are in effect and, after such requirements are no longer in effect, contribute the transmission facilities to the transmission company under par. (b). A public utility affiliate that transfers transmission facilities under a lease under this paragraph does not qualify for the asset cap exception under par. (a) unless, during the term of the lease, the public utility affiliate does not receive any voting interest in the transmission company.

AB389,50,13 (c) Contribution of land rights. 1. A public utility affiliate that commits to contributing land rights to the transmission company under par. (a) 2. shall do each of the following:

AB389,50,21 a. Except as provided in subd. 2., if the land right is assigned to a transmission account for rate-making purposes and is not jointly used for electric and gas distribution facilities by the public utility affiliate, the public utility affiliate shall convey or assign at book value all of its interest in the land right to the transmission company, except that any conveyance or assignment under this subd. 1. a. shall be subject to the rights of any joint user of the land right and to the right of the public utility affiliate to nondiscriminatory access to the real estate that is subject to the land right.

AB389,51,6 b. If the land right is jointly used, or is intended to be jointly used, for electric and gas distribution facilities by the public utility affiliate, the public utility affiliate shall enter into a contract with the transmission company that grants the transmission company a right to place, maintain, modify or replace the transmission company's transmission facilities on the real property that is subject to the land right during the life of the transmission facilities and the life of any replacements of the transmission facilities. A right granted in a contract under this subd. 1. b. shall be paramount to the right of any other user of the land right, except that a right granted in such a contract shall be on par with the right of the public utility affiliate to use the land right for electric or gas distribution facilities.

AB389,51,12 2. If a public utility affiliate is prohibited from making a conveyance or assignment described in subd. 1. a., the public utility affiliate shall enter into a contract with the transmission company that grants the transmission company substantially the same rights as under such a conveyance or assignment. For purposes of a contract under this subdivision, a land right shall be valued at book value, not at market value.

AB389,51,18 3. The commission shall resolve any dispute over the contribution of a land right under subd. 1. or 2., including a dispute over the valuation of such a land right, unless a federal agency exercises jurisdiction over the dispute. During the pendency of any dispute that is before the commission or a federal agency, the transmission company shall be entitled to use the land right that is the subject to the dispute and shall be required to pay any compensation that is in dispute into an escrow account.

AB389, s. 56 Section 56. 196.485 (6) of the statutes is created to read:

AB389,51,22 196.485 (6) Electric utilities, transmission dependent utilities and retail electric cooperatives. No later than the first day of the 12th month beginning after the first public utility affiliate files a commitment under sub. (5) (a) 2.:

AB389,52,2 (a) An electric utility, other than a public utility affiliate, may transfer all of its integrated transmission facilities to the transmission company on the same terms and conditions as a contribution of transmission facilities and land rights by a public utility affiliate under sub. (5) (b) and (c).

AB389,52,9 (b) A transmission-dependent utility or retail electric cooperative may purchase equity interests in the transmission company at a price that is equivalent to net book value and on terms and conditions that are comparable to those for public utility affiliates that have contributed transmission facilities to the transmission company. A purchaser under this paragraph may contribute funds to the transmission company that are no more than the value of its prorated shares based on firm electric usage in this state in 1999.

AB389, s. 57 Section 57. 196.485 (6m) of the statutes is created to read:

AB389,52,15 196.485 (6m) Dividends, profits and gains. The commission may not treat any dividend received by a transmission utility from the transmission company or any gain or profit of a transmission utility from the sale or other disposition of securities issued by the transmission company as a credit against the retail revenue requirements of the transmission utility.

AB389, s. 58 Section 58. 196.485 (7) of the statutes is created to read:

AB389,52,19 196.485 (7) Enforcement. A wholesale or retail customer of a public utility affiliate may petition the circuit court for Dane County for specific performance of a commitment filed under sub. (5) (a) 2. or 3.

AB389, s. 59 Section 59. 196.485 (8) of the statutes is created to read:

AB389,52,25 196.485 (8) Penalties. A public utility affiliate that fails to complete the contribution of transmission facilities to the transmission company by the completion date specified in the filing under sub. (5) (a) 2. shall forfeit $25,000 for each day that completion of the contribution is delayed if the transmission company is legally able to accept the contribution.

AB389, s. 60 Section 60. 196.487 of the statutes is created to read:

AB389,53,2 196.487 Reliability of electric service. (1) Definitions. In this section:

AB389,53,3 (a) "Public utility affiliate" has the meaning given in s. 196.795 (1) (L).

AB389,53,4 (b) "Transmission company" has the meaning given in s. 196.485 (1) (ge).

AB389,53,13 (2) Commission order. If the commission determines that a public utility affiliate or the transmission company is not making investments in the facilities under its control that are sufficient to ensure reliable electric service, the commission shall order the public utility affiliate or transmission company to make adequate investments in its facilities that are sufficient to ensure reliable electric service. An order under this subsection shall require the public utility affiliate or transmission company to provide security in an amount and form that, to the satisfaction of the commission, is sufficient to ensure that the public utility affiliate or transmission company expeditiously makes any investment that is ordered.

AB389,53,16 (3) Cost recovery. The commission shall allow a public utility affiliate that is subject to an order under sub. (2) to recover in its retail electric rates the costs that are prudently incurred in complying with the order.

AB389, s. 61 Section 61. 196.491 (3) (d) 3r. of the statutes is created to read:

AB389,53,22 196.491 (3) (d) 3r. For a high-voltage transmission line that is proposed to increase the transmission import capability into this state, existing rights-of-way are used to the extent practicable and the routing and design of the high-voltage transmission line minimizes environmental impacts in a manner that is consistent with achieving reasonable electric rates.

AB389, s. 62 Section 62. 196.491 (3) (d) 3t. of the statutes is created to read:

AB389,54,4 196.491 (3) (d) 3t. For a high-voltage transmission line that is designed for operation at a nominal voltage of 345 kilovolts or more, the high-voltage transmission line provides usage, service or increased regional reliability benefits to the wholesale and retail customers or members in this state and the benefits of the high-voltage transmission line are reasonable in relation to the cost of the high-voltage transmission line.

AB389, s. 63 Section 63. 196.491 (3) (gm) of the statutes is created to read:

AB389,54,20 196.491 (3) (gm) The commission may not approve an application filed after the effective date of this paragraph .... [revisor inserts date], under this section for a certificate of public convenience and necessity for a high-voltage transmission line that is designed for operation at a nominal voltage of 345 kilovolts or more unless the approval includes the condition that the applicant shall pay the fees specified in sub. (3g) (a). If the commission has approved an application under this section for a certificate of public convenience and necessity for a high-voltage transmission line that is designed for operation at a nominal voltage of 345 kilovolts or more that was filed after April 1, 1999, and before the effective date of this paragraph .... [revisor inserts date], the commission shall require the applicant to pay the fees specified in sub. (3g) (a). For any application subject to this paragraph, the commission shall determine the cost of the high-voltage transmission line, identify the counties, towns, villages and cities through which the high-voltage transmission line is routed and allocate the amount of investment associated with the high-voltage transmission line to each such county, town, village and city.

AB389, s. 64 Section 64. 196.491 (3g) of the statutes is created to read:

AB389,55,4 196.491 (3g) Fees for certain high-voltage transmission lines. (a) A person who receives a certificate of public convenience and necessity for a high-voltage transmission line that is designed for operation at a nominal voltage of 345 kilovolts or more under sub. (3) shall pay the department of administration an annual impact fee as specified in the rules promulgated by the department of administration under s. 16.969 (2) (a) and shall pay the department of administration a one-time environmental impact fee as specified in the rules promulgated by the department of administration under s. 16.969 (2) (b).

AB389,55,8 (b) A person that pays a fee under par. (a) may not use the payment to offset any other mitigation measure that is required in an order by the commission under sub. (3) regarding the certificate of public convenience and necessity specified in par. (a).

AB389, s. 65 Section 65. 196.491 (3m) (b) 2. of the statutes is amended to read:

AB389,55,14 196.491 (3m) (b) 2. The analytical process specified in subd. 1. b. shall, to the extent practicable, be consistent with the analytical process described in the merger enforcement policy of the federal department of justice and the federal trade commission regarding horizontal acquisitions and mergers that are subject to 15 USC 1, 18 or 45, as defined in s. 196.485 (1) (dr).

AB389, s. 66 Section 66. 196.494 (3) of the statutes is amended to read:

AB389,55,24 196.494 (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, s. 67 Section 67. 196.494 (5) of the statutes is created to read:

AB389,56,6 196.494 (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:

AB389,56,8 (a) Compliance with each state's environmental and siting standards for transmission facilities.

AB389,56,9 (b) A regional need determination for transmission facilities.

AB389,56,11 (c) A mechanism for resolving conflicts between the states regarding the siting of transmission facilities.

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

AB389,57,17 196.52 (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, s. 69 Section 69. 196.795 (1) (g) 1. of the statutes is amended to read:

AB389,57,21 196.795 (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, s. 70 Section 70. 196.795 (1) (g) 2. of the statutes is amended to read:

AB389,58,2 196.795 (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, s. 71 Section 71. 196.795 (1) (h) 3. of the statutes is created to read:

AB389,58,4 196.795 (1) (h) 3. "Holding company" does not include a transmission company.

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

AB389,58,7 196.795 (1) (p) "Transmission company" has the meaning given in s. 196.485 (1) (ge).

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

AB389,58,12 196.795 (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, 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, s. 75 Section 75. 196.795 (5) (pm) 1. (intro.) of the statutes is repealed.

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

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

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

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

AB389,59,4 196.795 (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, s. 80 Section 80. 196.795 (5) (pm) 3. of the statutes is renumbered 196.795 (6m) (d) and amended to read:

AB389,59,10 196.795 (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, s. 81 Section 81. 196.795 (6m) (title) of the statutes is created to read:

AB389,59,12 196.795 (6m) (title) Asset cap.

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

AB389,59,14 196.795 (6m) (a) Definitions. (intro.) In this subsection:

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

AB389,59,18 196.795 (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, s. 84 Section 84. 196.795 (6m) (a) 2. of the statutes is created to read:

AB389,59,21 196.795 (6m) (a) 2. "Eligible asset" means an asset of a nonutility affiliate that is used for any of the following:

AB389,59,23 a. Producing, generating, transmitting, delivering, selling or furnishing gas, oil, electricity or steam energy.

AB389,59,25 b. Providing an energy management, conservation or efficiency product or service or a demand-side management product or service.

AB389,60,1 c. Providing an energy customer service, including metering or billing.

AB389,60,2 d. Recovering or producing energy from waste materials.

AB389,60,3 e. Processing waste materials.

AB389,60,6 f. Manufacturing, distributing or selling products for filtration, pumping water or other fluids, processing or heating water, handling fluids or other related activities.

AB389,60,7 g. Providing a telecommunications service, as defined in s. 196.01 (9m).

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

AB389,60,11 196.795 (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, s. 86 Section 86. 196.795 (6m) (b) (title) of the statutes is created to read:

AB389,60,13 196.795 (6m) (b) In general.

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

AB389,60,20 196.795 (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.

AB389,60,22 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:

AB389,60,25 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.

AB389,61,1 b. Substantially all of the assets of the nonutility affiliate are eligible assets.

AB389,61,7 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.

AB389,61,14 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, s. 88 Section 88. 196.795 (11) (b) of the statutes is amended to read:

AB389,62,2 196.795 (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.