196.485(3m)(b)2.
2. Subject to any approval required under state or federal law, purchase or acquire transmission facilities in addition to the transmission facilities contributed under sub.
(5) (b) or purchase or acquire the right to provide transmission service over transmission facilities that it does not own.
196.485(3m)(b)3.
3. Subject to any approval required under federal or state law, withdraw from the Midwest independent system operator or any other independent system operator or regional transmission organization of which the transmission company is or becomes a member, if the commission determines that the withdrawal is in the public interest.
196.485(3m)(c)
(c)
Organization. The operating agreement, as defined in s.
183.0102 (13), of a transmission company that is organized as a limited liability company under ch.
183 or the bylaws of a transmission company that is organized as a corporation under ch.
180 shall provide for each of the following:
196.485(3m)(c)1.
1. That the transmission company has no less than 5 nor more than 14 managers or directors, except that the operating agreement or bylaws may allow the requirements of this subdivision to be modified upon a unanimous vote of the managers or directors during the 10-year period after the organizational start-up date or upon a two-thirds vote of the board of directors or managers after such 10-year period.
196.485(3m)(c)2.
2. That at least 4 managers or directors of the transmission company have staggered 4-year terms, are elected by a majority vote of the voting security holders and are not directors, employees or independent contractors of a person engaged in the production, sale, marketing, transmission or distribution of electricity or natural gas or of an affiliate of such a person.
196.485(3m)(c)3.
3. That, during the 10-year period after the organizational start-up date, each of the following is satisfied, subject to the limitation on the number of managers or directors under subd.
1.:
196.485(3m)(c)3.a.
a. Each nontransmission utility security holder that owns 10 percent or more of the outstanding voting securities of the transmission company may appoint one manager or director of the transmission company for a one-year term, except that the requirements of this subd.
3. a. may be modified upon a unanimous vote of the managers or directors.
196.485(3m)(c)3.b.
b. Each group of nontransmission utility security holders that, as a group, owns 10 percent or more of the outstanding voting securities of the transmission company may appoint one manager or director of the transmission company for a one-year term if the group has entered into a written agreement regarding the appointment and the group files the agreement with the transmission company, except that the requirements of this subd.
3. b. may be modified upon a unanimous vote of the managers or directors.
196.485(3m)(c)3.bg.
bg. Each nontransmission utility security holder that makes an appointment under subd.
3. a. is not allowed to make an appointment under subd.
3. b. as a member of a group of nontransmission utility security holders.
196.485(3m)(c)3.br.
br. Each nontransmission utility security holder that makes an appointment as a member of a group under subd.
3. b. is not allowed to make an appointment under subd.
3. a. 196.485(3m)(c)3.c.
c. Each person that receives at least 5 percent of the voting securities of the transmission company under sub.
(6) (a) 1. or
3. may appoint one manager or director of the transmission company for a one-year term if the person continues to hold at least a 5 percent equity interest in the transmission company during the one-year term and if the person does not make an appointment under subd.
3. a.,
b. or
d. 196.485(3m)(c)3.d.
d. Each transmission utility security holder may appoint one manager or director of the transmission company for a one-year term.
196.485(3m)(c)4.
4. That, during the 5-year period after the organizational start-up date, no public utility affiliate that contributes transmission facility assets to the transmission company under sub.
(5) (b) and no affiliate of such a public utility affiliate may increase its percentage share of the outstanding securities of the transmission company prior to any initial issuance of securities by the transmission company to any 3rd party other than a 3rd party exercising its right to purchase securities under sub.
(6) (a) 3., except that this subdivision does not apply to securities that are issued by the transmission company in exchange for transmission facilities that are contributed in addition to the transmission facilities that are contributed under sub.
(5) (b) and except that the requirements of this subdivision may be modified upon a unanimous vote of the managers or directors.
196.485(3m)(c)5.
5. That, beginning 3 years after the organizational start-up date, any holder of 10 percent or more of the securities of the transmission company may require the transmission company to comply with any state or federal law that is necessary for the security holder to sell or transfer its shares.
196.485(3m)(d)
(d)
Commission jurisdiction. The transmission company is subject to the jurisdiction of the commission except to the extent that it is subject to the exclusive jurisdiction of the federal energy regulatory commission.
196.485(4)(a)(a) Except as provided in par.
(am), a transmission utility may not transfer control over, or divest its interest in, its transmission facilities to an independent system operator or independent transmission owner unless, to the satisfaction of the commission, each of the following requirements is satisfied:
196.485(4)(a)1.
1. The independent system operator or independent transmission owner is the sole provider of all transmission service to all users of its transmission system in this state, including the provision of retail transmission service to users that are public utilities.
196.485(4)(a)2.
2. The independent system operator or independent transmission owner has authority over transmission facilities that is sufficient for the independent system operator or independent transmission owner to ensure the reliability of its transmission system.
196.485(4)(a)3.
3. The independent system operator or independent transmission owner has sufficient authority to carry out the duties specified in sub.
(3).
196.485(4)(am)
(am) Each transmission utility in the transmission area that is a public utility shall become a member of the Midwest independent system operator no later than June 30, 2000, and shall transfer operational control over its transmission facilities to the Midwest independent system operator. Each such transmission utility that has not contributed its transmission facilities to the transmission company shall elect to become part of the single zone for pricing purposes within the Midwest independent system operator and any phase-in plan prepared under sub.
(3m) (a) 4. 196.485(4)(b)
(b) A transmission utility that transfers control over its transmission facilities to an independent system operator shall, subject to the approval of the applicable federal agency, provide reasonable and cost-effective construction, operation and maintenance services to the independent system operator that are required for operation of the transmission facilities.
196.485(5)(a)(a)
Asset cap exception. Section
196.795 (6m) (e) does not apply to the eligible assets of a nonutility affiliate in a holding company system unless each public utility affiliate in the holding company system does each of the following:
196.485(5)(a)1.
1. Petitions the commission and the federal energy regulatory commission to approve the transfer of operational control of all the public utility affiliate's transmission facilities in this state and in Iowa, Michigan, Minnesota and Illinois to the Midwest independent system operator.
196.485(5)(a)2.
2. Files with the commission an unconditional, irrevocable and binding commitment to contribute, no later than January 1, 2001, all of the transmission facilities that the public utility affiliate owns or operates in this state on October 29, 1999, and land rights, to the transmission company. A filing under this subdivision shall specify a date no later than January 1, 2001, on which the public utility affiliate will complete the contribution of transmission facilities.
196.485(5)(a)3.
3. Files with the commission an unconditional, irrevocable and binding commitment to contribute, and to cause each entity into which it merges or consolidates or to which it transfers substantially all of its assets to contribute, any transmission facility in this state the ownership or control of which it acquires after October 29, 1999, and land rights, to the transmission company.
196.485(5)(a)4.
4. Notifies the commission in writing that the public utility affiliate has become a member of the Midwest independent system operator, has agreed to transfer its transmission facilities to the Midwest independent system operator and has committed not to withdraw its membership prior to the date on which the public utility affiliate contributes transmission facilities to the transmission company under par.
(b).
196.485(5)(a)5.
5. Petitions the commission and the federal energy regulatory commission to approve the contributions specified in subds.
2. and
3. and agrees in such a petition not to withdraw the petition in the event that the commission or the federal energy regulatory commission conditions its approval on changes that are consistent with state and federal law.
196.485(5)(b)1.1. A public utility affiliate may not contribute a transmission facility to the transmission company until the commission has reviewed the terms and conditions of the transfer to determine whether the transfer satisfies the requirements of this subsection and has issued an order approving the terms and conditions of the transfer. The commission may modify the terms and conditions of the transfer and take any other action necessary to satisfy the requirements of this subsection. An order under this subdivision that approves or modifies the terms and conditions of a transfer may allow a public utility affiliate to recover in retail rates any adverse tax consequences of the transfer as a transition cost.
196.485(5)(b)2.
2. The transmission company and a public utility affiliate that files a commitment to contribute transmission facilities under par.
(a) 2. shall structure the transfer of the transmission facilities in a manner that satisfies each of the following:
196.485(5)(b)2.a.
a. The structure of the transfer avoids or minimizes material adverse tax consequences to the public utility affiliate from the transfer and avoids or minimizes material adverse consequences on public utility rates that do not arise out of combining the transmission company's facilities into a single zone in the Midwest independent system operator.
196.485(5)(b)2.b.
b. To the extent practicable, the structure of the transfer satisfies the requirements of the Internal Revenue Service for a tax-free transfer.
196.485(5)(b)3.
3. The requirements under subd.
2. b. shall, if practicable, be satisfied by the transmission company's issuance of a preferred class of securities that provides the fixed-cost portion of the resulting capital structure of the transmission company. The transmission company shall issue preferred securities under this subdivision on a basis that does not dilute the voting rights of the initial security holders relative to the value of their initial contributions.
196.485(5)(b)4.
4. If the transfer of transmission assets under this paragraph results in a capital structure of the transmission company in which the percentage of common equity is materially higher than that of the public utility affiliates who made the transfer, or if the cost of the fixed-cost portion of the capital structure of the transmission company is materially higher than that of the public utility affiliates who made the transfer, the public utility affiliates shall enter into a contract with the transmission company under which the public utility affiliates agree to accept from the transmission company a return on common equity based upon the equity rate of return approved by the federal energy regulatory commission and upon an imputed capital structure that assigns to a portion of the public utility affiliates' common equity holdings an imputed debt return that is consistent with the requirements of this subdivision. A contract under this subdivision shall specify that the public utility affiliates shall be required to accept the return on common equity described in this subdivision only until such time that the federal energy regulatory commission determines that the actual capital structure and capital costs of the transmission company are appropriate and consistent with industry practice for a regulated public utility that provides electric transmission service in interstate commerce.
196.485(5)(b)5.
5. If, at the time that a public utility affiliate files a commitment under par.
(a) 2., the public utility affiliate has applied for or obtained a certificate of public convenience and necessity under s.
196.491 (3) or a certificate under s.
196.49 for the construction of transmission facilities, the public utility affiliate shall do each of the following:
196.485(5)(b)5.a.
a. Proceed with diligence with respect to obtaining the certificate and, except as provided in subd.
6., constructing the transmission facilities.
196.485(5)(b)5.b.
b. If the commission determines that the cost of the transmission facilities is reasonable and prudent, transfer the transmission facilities to the transmission company at net book value when construction is completed in exchange for additional securities of the transmission company on a basis that is consistent with the securities that were initially issued to the public utility affiliate.
196.485(5)(b)6.
6. If the construction of a transmission facility specified in subd.
5. a. is not completed within 3 years after a certificate is issued for the transmission facility under s.
196.49 or
196.491 (3), the transmission company may assume responsibility for completing construction of the transmission facility. If the transmission company assumes responsibility for completing construction under this subdivision, the transmission company shall carry out any obligation under any contract entered into by the public utility with respect to the construction until the contract is modified or rescinded by the transmission company to the extent allowed under the contract.
196.485(5)(b)7.
7. Any transmission facilities that are contributed to the transmission company shall be valued at net book value determined on the basis of the regulated books of account at the time of the transfer.
196.485(5)(bm)
(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.
196.485(5)(c)1.1. A public utility affiliate that commits to contributing land rights to the transmission company under par.
(a) 2. shall do each of the following:
196.485(5)(c)1.a.
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.
196.485(5)(c)1.b.
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.
196.485(5)(c)2.
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.
196.485(5)(c)3.
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.
196.485(5)(d)
(d)
Applicability. Notwithstanding sub.
(1) (h), and subject to any approval required under federal law, for purposes of this subsection, a facility of a public utility affiliate is a transmission facility if any of the following applies:
196.485(5)(d)1.
1. The facility is not a radial facility and the facility is designed for operation at a nominal voltage of more than 130 kilovolts.
196.485(5)(d)2.
2. The facility is not a radial facility and the facility is designed for operation at a nominal voltage of more than 50 kilovolts but not more than 130 kilovolts, unless a person has demonstrated to the commission that the facility is not a transmission facility on the basis of factors for identifying a transmission facility that are specified in the orders of the federal energy regulatory commission under
16 USC 824d and
824e.
196.485(5)(d)3.
3. The facility is a radial facility or is designed for operation at a nominal voltage of 50 kilovolts or less, and a person has demonstrated to the commission that the facility is a transmission facility on the basis of factors for identifying a transmission facility that are specified in the orders of the federal energy regulatory commission under
16 USC 824d and
824e.
196.485(6)
(6)
Electric utilities, transmission dependent utilities and retail electric cooperatives. 196.485(6)(a)1.
1. An electric utility, other than a public utility affiliate or an owner or operator of a wholesale merchant plant, as defined in s.
196.491 (1) (w), may transfer all of its transmission facilities that are specified in subd.
2. 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).
196.485(6)(a)2.
2. An electric utility may transfer transmission facilities under subd.
1. if the transmission facilities are located in the geographic area that is served by the Mid-America Interconnected Network, Inc., or the Mid-Continent Area Power Pool reliability council of the North American Electric Reliability Council.
196.485(6)(a)3.
3. 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 subdivision 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.
196.485(6)(b)
(b) Notwithstanding sub.
(1) (h), and subject to any approval required under federal law, for purposes of this subsection, a facility of an electric utility is a transmission facility if the criteria specified in sub.
(5) (d) 1.,
2. or
3. are satisfied.
196.485(6m)
(6m)
Dividends, distributions, profits and gains. The commission may not treat any dividend or distribution 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.
196.485(7)
(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. 196.485(8)
(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.
196.487
196.487
Reliability of electric service. 196.487(2)
(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.
196.487(3)
(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.
196.487 History
History: 1999 a. 9.
196.49
196.49
Authorization from commission before transacting business; extensions and improvements to be approved; enforcement of orders; natural gas. 196.49(1)(am)
(am) Except as provided in s.
196.50 (1) (am), no public utility not legally engaged in performing a utility service on August 1, 1931, in any municipality may commence the construction of any public utility plant, extension or facility, or render service in such municipality directly, or indirectly by serving any other public utility or agency engaged in public utility service or otherwise, unless the public utility has obtained a certificate from the commission authorizing it to transact public utility business.
196.49(1)(b)
(b) This subsection applies only to a public utility which was not legally engaged in performing a public utility service on August 1, 1931, in a municipality and which proposes to commence construction or render service in the municipality. If there is a public utility engaged in similar service in operation under an indeterminate permit in the municipality, ss.
196.495 and
196.50 apply.
196.49(2)
(2) No public utility may begin the construction, installation or operation of any new plant, equipment, property or facility, nor the construction or installation of any extension, improvement or addition to its existing plant, equipment, property, apparatus or facilities unless the public utility has complied with any applicable rule or order of the commission. If a cooperative association has been incorporated under ch.
185 for the production, transmission, delivery or furnishing of light or power and has filed with the commission a map of the territory to be served by the association and a statement showing that a majority of the prospective consumers in the area are included in the project, no public utility may begin any such construction, installation or operation within the territory until after the expiration of 6 months from the date of filing the map and notice. If the cooperative association has entered into a loan agreement with any federal agency for the financing of its proposed system and has given written notice of the agreement to the commission, no public utility may begin any construction, installation or operation within the territory until 12 months after the date of the loan agreement.
196.49(3)(a)(a) In this subsection, “project" means construction of any new plant, equipment, property or facility, or extension, improvement or addition to its existing plant, equipment, property, apparatus or facilities. The commission may require by rule or special order that a public utility submit, periodically or at such times as the commission specifies and in such detail as the commission requires, plans, specifications and estimated costs of any proposed project which the commission finds will materially affect the public interest.
196.49(3)(b)
(b) The commission may require by rule or special order under par.
(a) that no project may proceed until the commission has certified that public convenience and necessity require the project. The commission may refuse to certify a project if it appears that the completion of the project will do any of the following:
196.49(3)(b)1.
1. Substantially impair the efficiency of the service of the public utility.
196.49(3)(b)2.
2. Provide facilities unreasonably in excess of the probable future requirements.
196.49(3)(b)3.
3. When placed in operation, add to the cost of service without proportionately increasing the value or available quantity of service unless the public utility waives consideration by the commission, in the fixation of rates, of such consequent increase of cost of service.
196.49(3)(c)
(c) The commission may issue a certificate for the project or for any part of the project which complies with the requirements of this section, or the commission may attach to the issuance of its certificate such terms and conditions as will ensure that the project meets the requirements of this section. The issuance of a certificate under this section shall not be a condition precedent to the exercise of eminent domain under ch.
32.
196.49(4)
(4) The commission may not issue a certificate under sub.
(1),
(2), or
(3) for the construction of electric generating equipment and associated facilities unless the commission determines that brownfields, as defined in s.
238.13 (1) (a) or s.
560.13 (1) (a), 2009 stats., are used to the extent practicable.
196.49(5)(a)(a) No public utility furnishing gas to the public in this state may construct, install or place in operation any new plant, equipment, property or facility, or construct or install any extension, improvement, addition or alteration to its existing plant, equipment, property or facilities for the purpose of connecting its properties and system to a source of supply of gaseous fuel for sale to the public which is different from that which has been sold previously, or for the purpose of adapting its facilities to use the different kind of gaseous fuel unless the commission certifies that the general public interest and public convenience and necessity require the connection to or use of the different fuel. No public utility may substitute natural gas or a mixture of natural and manufactured gas in lieu of manufactured gas for distribution and sale to the public unless it has obtained from the commission a certificate that the general public interest and public convenience and necessity require the substitution.
196.49(5)(b)
(b) Proceedings for a certificate under par.
(a) shall be commenced by petition to the commission in a form prescribed by the commission, furnishing such information as the commission by rule or order prescribes. The commission shall prescribe the form of notice, to whom the notice shall be given, and how notice shall be given.
196.49(5)(c)
(c) A petition under par.
(b) may include one or more municipalities, may be made by one or more public utilities as a joint petition, by any other interested person or by a public utility and any other interested person. The commission may direct the consolidation, separation or consideration of separate petitions as it deems necessary or expedient to a prompt hearing and disposition of the issue.
196.49(5)(d)
(d) Upon the filing of a petition under par.
(b), notice of hearing on the petition shall be given by the person filing the petition by publication of a class 2 notice, under ch.
985, or by mailing or personal service, as the commission directs by the order under par.
(b). Notice under this paragraph shall be given at least 2 weeks prior to hearing on the petition. Proof of notice shall be filed as directed by the commission.
196.49(5)(e)
(e) The commission, with or without an order, prior to or during any hearing under this subsection, may frame and prescribe special issues and limit the issues or the nature and extent of proof so as to avoid unnecessary duplication. The commission, with or without an order, may proceed with the hearing as to part of a petition under par.
(b) as it may find desirable to a full but speedy hearing upon the petition.
196.49(5)(f)
(f) The commission may accept as presumptive evidence in a commission proceeding the facts found in findings and orders of the federal energy regulatory commission or any federal agency having jurisdiction as to the availability of adequate supplies of natural gas, the adequacy or sufficiency of equipment and facilities to be employed in the delivery or storage of natural gas for any public utility, and any similar findings or determinations affecting the seller or person furnishing natural gas to any public utility and material to the ultimate determination of the issues in the proceeding. The commission may accept and take judicial notice of its own files and records, including all proceedings and the evidence therein which it finds to be material and relevant. The commission shall give notice of the taking of judicial notice under this paragraph prior to the conclusion of final hearings upon any proceeding so as to give interested parties the right to object to acceptance of the evidence or to contradict the evidence by other competent evidence.
