Chapter 196

196.37 Annotation In the absence of statutory authority, the PSC may not fix rates to be applied retroactively. Algoma, Eagle River, New Holstein, Stratford, Sturgeon Bay & Two Rivers v. PSC, 91 Wis. 2d 252, 283 N.W.2d 261 (Ct. App. 1978).

196.37 Annotation Allowing a utility to charge present ratepayers for a storm damage casualty loss that occurred in a prior year did not constitute retroactive rate making. Wisconsin Environmental Decade, Inc. v. PSC, 98 Wis. 2d 682, 298 N.W.2d 205 (Ct. App. 1980).

196.37 Annotation The PSC has authority to shift the cost of excess generating capacity to shareholders if the excess capacity was imprudently acquired or is not useful in serving the public, but there must be a reasoned determination that ratepayers should not bear the cost. Madison Gas & Electric Co. v. PSC, 109 Wis. 2d 127, 325 N.W.2d 339 (1982).

196.37 Annotation A utility’s failure to pay taxes under protest may constitute “imprudence” and may reasonably affect a rate-setting decision. Wisconsin Public Service Corporation v. PSC, 156 Wis. 2d 611, 457 N.W.2d 502 (Ct. App. 1990).

196.37 Annotation The PSC has authority to order a utility to refund compensation collected in violation of filed tariffs. GTE North Inc. v. PSC, 176 Wis. 2d 559, 500 N.W.2d 284 (1993).

196.37 Annotation The PSC’s imposition of a penalty for imprudent administration of a coal acquisition contract was impermissible retroactive rate-making. Wisconsin Power & Light v. PSC, 181 Wis. 2d 385, 511 N.W.2d 291 (1994).

196.37 Annotation Sub. (1) is not implicated when a refund is ordered for reasons other than the PSC’s determination that rates for services already provided were not reasonable. Sub. (2) authorizes the PSC to order a refund of a rate that the utility believed was included in a tariff, but the PSC concluded was not, and of a rate that the utility believed was properly filed with the PSC but the PSC concluded was not. CenturyTel of the Midwest-Kendall, Inc. v. PSC, 2002 WI App 236, 257 Wis. 2d 837, 653 N.W.2d 130, 02-0053.

196.37 Annotation Once a rate or practice is determined to be unlawful, or once a charge is determined to be a practice that is unlawful, it is subject to the remedial authority of sub. (2). Under CenturyTel, sub. (2) provides the PSC authority to order a refund. Wisconsin Bell, Inc. v. Public Service Commission, 2004 WI App 8, 269 Wis. 2d 409, 675 N.W.2d 242, 02-3163.

196.371 196.371 Rate-making principles for electric generation facilities.

196.371(1) (1) Definition. In this section, “certificate” means a certificate issued under s. 196.49 (3) or 196.491 (3).

196.371(2) (2) Application. A public utility that proposes to purchase an electric generating facility or that applies for a certificate for the construction of an electric generating facility may apply to the commission for an order specifying in advance the rate-making principles that the commission shall apply to the public utility’s recovery of the capital costs of the facility, including the purchase price and any necessary modifications or improvements to the facility at the time of the purchase, in future rate-making proceedings. In applying for an order under this section, a public utility shall describe the public utility’s proposal for the recovery of such costs, including all of the following:

196.371(2)(a) (a) The economic useful life of the facility.

196.371(2)(b) (b) The proposed return on equity and rate of return for the facility.

196.371(2)(c) (c) The proposed financing mechanisms for the facility.

196.371(2)(d) (d) The proposed method for determining the costs that may be recovered in rates.

196.371(2)(e) (e) Any other proposals or information regarding the recovery of the costs that the public utility determines are necessary for providing certainty to the public utility, investors, and ratepayers in future rate-making proceedings.

196.371(2)(f) (f) Any other information specified by the commission.

196.371(3) (3) Procedure.

196.371(3)(a) (a) The commission shall conduct a hearing on an application for an order under this section. The commission may hold the hearing in conjunction with a hearing, if any, on the application for the certificate or the commission may hold a separate hearing on the application for the order. If the public utility has applied for a certificate for the facility, the commission shall determine whether to deny an application for an order or to issue an order no later than the date that the commission takes final action on the application for the certificate. If the public utility has not applied for a certificate, the commission shall determine whether to deny an application for an order or to issue an order no later than 180 days after the commission determines that the application for the order is complete using the method and deadlines specified under s. 196.491 (3) (a) 2. The commission may issue an order if the commission determines that the order will provide a sufficient degree of certainty to the public utility, investors, and ratepayers with respect to future recovery of the facility’s capital costs and that the order is otherwise in the public interest.

196.371(3)(am) (am) The commission shall specify in an order under this section a deadline at least 60 days after the date of issuance of the order for the public utility to notify the commission in writing about whether the public utility accepts or waives acceptance of the order. If the public utility does not make the notification by the deadline specified in the order, the public utility is considered to have waived acceptance of the order.

196.371(3)(b) (b) If the public utility accepts the order, then, in all future rate-making proceedings regarding the public utility, the order shall be binding on the commission in its treatment of the recovery of the capital costs of the facility that is subject to the order and the commission may not consider the order or the effects of the order in its treatment of the recovery of any other cost of the public utility.

196.371(3)(bm) (bm) If the public utility waives or is considered to have waived acceptance of the order, the commission shall withdraw the order and consider the capital costs of the facility in all future rate-making proceedings in the same manner as the commission considers capital costs for which no order has been issued under this section.

196.371(3)(c) (c) The commission may not require a public utility to apply for or accept an order under this section.

196.371(4) (4) Rules. The commission shall promulgate rules for administering this section, including rules specifying the information that must be included in an application for an order under this section.

196.371 History History: 2005 a. 7.

196.372 196.372 Financial assistance for lead-containing customer-side water service lines.

196.372(1) (1) Definitions. In this section:

196.372(1)(a) (a) “Customer-side water service line” means the portion of a water service line owned by a property owner.

196.372(1)(b) (b) “Financial assistance” means a grant, loan, or combination thereof.

196.372(1)(c) (c) “Utility-side water service line” means the portion of a water service line owned by a water public utility.

196.372(2) (2) Financial assistance. A water public utility may provide financial assistance to the owner of a property to which water utility service is provided for the purpose of assisting the owner in replacing customer-side water service lines containing lead if all of the following are satisfied:

196.372(2)(a) (a) The city, town, or village in which the water public utility provides utility service to the property has enacted an ordinance that permits the water public utility to provide the financial assistance and requires each owner of a premises located in the city, town, or village that is serviced by a customer-side water service line containing lead to replace that customer-side water service line.

196.372(2)(b) (b) The utility-side water service line and the water main pipe that are connected to the customer-side water service line meet one of the following conditions:

196.372(2)(b)1. 1. Do not contain lead.

196.372(2)(b)2. 2. The lead-containing portion of the utility-side water service line or water main pipe is replaced at the same time as the customer-side water service line is replaced.

196.372(2)(c) (c) The commission has granted its approval under sub. (3).

196.372(3) (3) Commission approval.

196.372(3)(a) (a) A water public utility seeking approval under sub. (2) (c) shall submit to the commission an application that includes a description of the proposed financial assistance, a description of the method for funding the financial assistance, a description of the customers served by the water public utility that would be eligible for financial assistance, and any other information relevant to the action requested by the commission.

196.372(3)(am) (am) The commission shall determine whether the application under par. (a) is complete and, no later than 45 days after the application is submitted the first time and no later than 30 days after the application is refiled a 2nd or subsequent time, notify the applicant in writing about the determination. If the commission determines that the application is incomplete, the notice shall identify all parts of the application the commission has determined to be incomplete and state the reasons for the determination. An applicant may supplement and refile an application that the commission has determined to be incomplete. There is no limit on the number of times that an applicant may refile an application under this paragraph. If the commission fails to determine whether an application is complete within 45 days after the application is filed or 30 days after the application is refiled, the application shall be considered to be complete.

196.372(3)(b) (b) Upon receipt of a complete application, the commission shall investigate the application. The investigation may be with or without public hearing. If the commission conducts a public hearing, the public hearing shall be upon such notice as the commission may require.

196.372(3)(c) (c) If a hearing is held on an application, the commission shall take final action on the application within 180 days after the application is determined to be complete. The chairperson of the commission may extend the time period for an additional 180 days for good cause. If the commission fails to take final action within the initial 180-day period, or the extended 180-day time period, the commission is considered to have granted its approval.

196.372(3)(d) (d) If a hearing is not held on an application, the commission shall take final action on the application within 90 days after the application is determined to be complete. The chairperson of the commission may extend the time period for an additional 90 days for good cause. If the commission fails to take final action within the initial 90-day period, or the extended 90-day time period, the commission is considered to have granted its approval.

196.372(3)(e) (e)

196.372(3)(e)1. 1. Except as provided in subds. 2. and 3., if the commission finds that the actions described in the application are not unjust, unreasonable, or unfairly discriminatory, it shall grant its approval in writing.

196.372(3)(e)2. 2. The commission may not approve an application under subd. 1. unless the application satisfies all of the following conditions:

196.372(3)(e)2.a. a. Grants that are provided as financial assistance to an owner are limited to no more than one-half of the total cost to the owner of replacing the customer-side water service line containing lead.

196.372(3)(e)2.b. b. Any loan provided may not be forgiven by the water public utility or the municipality.

196.372(3)(e)3. 3. The commission may not approve an application under subd. 1. unless the application satisfies one of the following conditions:

196.372(3)(e)3.a. a. If the water public utility intends to provide financial assistance as a percentage of the cost of replacing the customer-side water service line containing lead, that percentage is the same for each owner in a class of customers.

196.372(3)(e)3.b. b. If the water public utility intends to provide financial assistance as a specific dollar amount, that dollar amount is the same for each owner in a class of customers.

196.372 History History: 2017 a. 137; 2021 a. 85.

196.373 196.373 Water heater thermostat settings.

196.373(1) (1) In this section:

196.373(1)(a) (a) “Periodic customer billing” means a demand for payment of utility services by a public utility to a residential utility consumer on a monthly or other regular basis.

196.373(1)(b) (b) “Residential utility consumer” means any individual who lives in a dwelling which is located in this state and which is furnished with a utility service by a public utility. “Residential utility consumer” includes, but is not limited to, an individual engaged in farming as defined under s. 102.04 (3).

196.373(2) (2) At least annually every public utility furnishing gas or electricity shall include in its periodic customer billing a statement recommending that water heater thermostats be set no higher than 125 degrees Fahrenheit in order to prevent severe burns and unnecessary energy consumption.

196.373 History History: 1987 a. 102.

196.374 196.374 Energy efficiency and renewable resource programs.

196.374(1) (1) Definitions. In this section:

196.374(1)(a) (a) “Agricultural producer” means a person engaged in an agricultural activity, as defined in s. 101.10 (1) (a).

196.374(1)(b) (b) “Commitment to community program” means an energy efficiency or load management program by or on behalf of a municipal utility or retail electric cooperative.

196.374(1)(c) (c) “Customer application of renewable resources” means the generation of energy from renewable resources that takes place on the premises of a customer of an energy utility or municipal utility or a member of a retail electric cooperative.

196.374(1)(d) (d) “Energy efficiency program” means a program for reducing the usage or increasing the efficiency of the usage of energy by a customer or member of an energy utility, municipal utility, or retail electric cooperative. “Energy efficiency program” does not include load management.

196.374(1)(e) (e) “Energy utility” means an investor-owned electric or natural gas public utility.

196.374(1)(em) (em) “Large energy customer” means a customer of an energy utility that owns or operates a facility in the energy utility’s service area that has an energy demand of at least 1,000 kilowatts of electricity per month or of at least 10,000 decatherms of natural gas per month and that, in a month, is billed at least $60,000 for electric service, natural gas service, or both, for all of the facilities of the customer within the energy utility’s service territory.

196.374(1)(f) (f) “Load management program” means a program to allow an energy utility, municipal utility, wholesale electric cooperative, as defined in s. 16.957 (1) (v), retail electric cooperative, or municipal electric company, as defined in s. 66.0825 (3) (d), to control or manage daily or seasonal customer demand associated with equipment or devices used by customers or members.

196.374(1)(g) (g) “Local unit of government” has the meaning given in s. 23.24 (4) (a) 1.

196.374(1)(h) (h) “Municipal utility” has the meaning given in s. 16.957 (1) (q).

196.374(1)(i) (i) “Ordered program” means an energy efficiency or renewable resource program that an energy utility commenced on or after January 1, 2001, under a commission order issued on or after January 1, 2001, and in effect before July 1, 2007.

196.374(1)(j) (j) “Renewable resource” means a resource that derives energy from any source other than coal, petroleum products, nuclear power or, except as used in a fuel cell, natural gas. “Renewable resource” includes resources deriving energy from any of the following:

196.374(1)(j)1. 1. Solar energy.

196.374(1)(j)2. 2. Wind power.

196.374(1)(j)3. 3. Water power.

196.374(1)(j)4. 4. Biomass.

196.374(1)(j)5. 5. Geothermal technology.

196.374(1)(j)6. 6. Tidal or wave action.

196.374(1)(j)7. 7. Fuel cell technology that uses, as determined by the commission, a renewable fuel.

196.374(1)(k) (k) “Renewable resource program” means a program for encouraging the development or use of customer applications of renewable resources, including educating customers or members about renewable resources, encouraging customers or members to use renewable resources, and encouraging the transfer of new or emerging technologies from research, development, and demonstration to commercial implementation.

196.374(1)(L) (L) “Retail electric cooperative” has the meaning given in s. 16.957 (1) (t).

196.374(1)(n) (n) “Wholesale supplier” has the meaning given in s. 16.957 (1) (w).

196.374(1)(o) (o) “Wholesale supply percentage” has the meaning given in s. 16.957 (1) (x).

196.374(2) (2) Energy efficiency and renewable resource programs.

196.374(2)(a) (a) Statewide programs.

196.374(2)(a)1. 1. The energy utilities in this state shall collectively establish and fund statewide energy efficiency and renewable resource programs. The energy utilities shall contract, on the basis of competitive bids, with one or more persons to develop and administer the programs. The utilities may not execute a contract under this subdivision unless the commission has approved the contract. The commission shall require each energy utility to spend the amount required under sub. (3) (b) 2. to fund statewide energy efficiency and renewable resource programs.

196.374(2)(a)2. 2. The purpose of the programs under this paragraph shall be to help achieve environmentally sound and adequate energy supplies at reasonable cost, consistent with the commission’s responsibilities under s. 196.025 (1) (ar) and the utilities’ obligations under this chapter. The programs shall include, at a minimum, all of the following:

196.374(2)(a)2.a. a. Components to address the energy needs of residential, commercial, agricultural, institutional, and industrial energy users and local units of government.

196.374(2)(a)2.b. b. Components to reduce the energy costs incurred by local units of government and agricultural producers, by increasing the efficiency of energy use by local units of government and agricultural producers. The commission shall ensure that not less than 10 percent of the moneys utilities are required to spend under subd. 1. or sub. (3) (b) 2. is spent annually on programs under this subdivision except that, if the commission determines that the full amount cannot be spent on cost-effective programs for local units of government and agricultural producers, the commission shall ensure that any surplus funds be spent on programs to serve commercial, institutional, and industrial customers. A local unit of government that receives assistance under this subd. 2. b. shall apply all costs savings realized from the assistance to reducing the property tax levy.

196.374(2)(a)2.c. c. Initiatives and market strategies that address the needs of individuals or businesses facing the most significant barriers to creation of or participation in markets for energy efficient products that the individual or business manufactures or sells or energy efficiency services that the individual or business provides.

196.374(2)(a)2.d. d. Initiatives for research and development regarding the environmental and economic impacts of energy use in this state.