Chapter 196

196.027(2)(b)1.c. c. That the financing order is otherwise consistent with the public interest, and is prudent, reasonable, and appropriate.

196.027(2)(b)2. 2. In a financing order issued to an energy utility, the commission shall do all of the following:

196.027(2)(b)2.a. a. Except as provided in subds. 2. c. and 4., specify the amount of environmental control costs and financing costs that may be recovered through environmental control charges and the period over which such costs may be recovered.

196.027(2)(b)2.b. b. For the period specified in subd. 2. a. require that, as long as any customer obtains distribution service from the energy utility or its successors, the customer shall pay environmental control charges to the energy utility or its assignees regardless of whether the customer obtains other service from a different energy utility or other energy supplier.

196.027(2)(b)2.c. c. Include a formula-based mechanism for making any adjustments in the environmental control charges that customers are required to pay under the order and making any adjustments that are necessary to correct for any overcollection or undercollection of the charges or to otherwise ensure the energy utility’s or assignee’s timely recovery of environmental control costs and financing costs.

196.027(2)(b)2.d. d. Specify the environmental control property that is created and that may be used to pay or secure environmental trust bonds.

196.027(2)(b)2.e. e. If considered appropriate by the commission, include a provision allowing for the retirement of environmental trust bonds before their termination dates.

196.027(2)(b)2.f. f. Include any other conditions that the commission considers appropriate and that are not otherwise inconsistent with this section.

196.027(2)(b)3. 3. A financing order issued to an energy utility may provide that the energy utility’s acquisition of environmental control property specified in subd. 2. d. is conditioned upon, and shall be simultaneous with, the sale of the environmental control property to an assignee and the pledge of the environmental control property to secure environmental trust bonds.

196.027(2)(b)4. 4.

196.027(2)(b)4.a. a. If the commission issues a financing order, the commission shall apply, at least annually, the formula-based mechanism specified in subd. 2. c. and, based on estimates of demand and other mathematical factors, make the adjustments described in subd. 2. c. The commission shall make the adjustments within 45 days of the anniversary date on which environmental trust bonds are issued and after expiration of the comment period described in subd. 4. b.

196.027(2)(b)4.b. b. The commission may not hold a hearing for the purpose of making an adjustment under subd. 4. a., but shall allow interested parties 30 days to make comments limited to any error in the application of the formula-based mechanism relating to the appropriate amount of any overcollection or undercollection of environmental control charges and the appropriate amount of an adjustment.

196.027(2)(b)5. 5. A financing order is irrevocable and, except as provided in subds. 2. c. and 4., the commission may not reduce, impair, or otherwise adjust environmental control charges approved in the order.

196.027(2)(c) (c) Subsequent orders. The commission may commence a proceeding and issue a subsequent financing order that provides for retiring or refunding environmental trust bonds issued pursuant to the original financing order if the commission included a provision described in par. (b) 2. e. in the original financing order and if the commission finds that the subsequent financing order satisfies all of the criteria specified in par. (b) 1. a., b., and c.

196.027(2)(d) (d) Judicial review. A financing order or an order rejecting an application under par. (b) 1. is reviewable by the circuit court for Dane County under ch. 227, except that the court shall proceed to hear and determine the action as expeditiously as practicable and give the action precedence over other matters not accorded similar precedence by law.

196.027(2)(e) (e) Effect of orders.

196.027(2)(e)1. 1. A financing order shall remain in effect until the environmental trust bonds issued pursuant to the order have been paid in full and the financing costs of the bonds have been recovered in full.

196.027(2)(e)2. 2. A financing order issued to an energy utility shall remain in effect and unabated notwithstanding the bankruptcy of the energy utility.

196.027(2)(e)3. 3. An application by an energy utility for a financing order and commission approval of a financing order are in addition to and do not replace or supersede any other review or approval by the commission under this chapter that may be required or allowed for environmental control activities.

196.027(3) (3) Exceptions to commission jurisdiction.

196.027(3)(a) (a) If the commission issues a financing order to an energy utility, the commission may not, in exercising its powers and carrying out its duties regarding rate making, consider the environmental trust bonds issued pursuant to the order to be the debt of the energy utility, the environmental control charges paid under the order to be the revenue of the energy utility, or the environmental control costs or financing costs specified in the order to be the costs of the energy utility, nor may the commission determine that any action taken by an energy utility that is consistent with the order is unjust or unreasonable. Nothing in this paragraph affects the authority of the commission to adjust or reduce an energy utility’s revenue requirements under sub. (4) (a).

196.027(3)(b) (b) The commission may not order or otherwise directly or indirectly require an energy utility to use environmental trust bonds to finance any project, addition, plant, facility, extension, capital improvement, environmental control equipment, or any other expenditure, unless, except as provided in sub. (2) (c), the energy utility has made an application under sub. (2) (a) to finance such expenditure using environmental trust bonds. The commission may not refuse to allow an energy utility to recover costs for environmental control activities in an otherwise permissible fashion solely because of the potential availability of environmental trust financing.

196.027(4) (4) Energy utility duties.

196.027(4)(a) (a) An energy utility shall place the proceeds of any environmental trust bonds issued pursuant to a financing order in a separate account. An energy utility may use the proceeds only for paying environmental control costs and financing costs that are prudent, reasonable, and appropriate, and only if the energy utility has applied for and obtained all approvals from the commission under this chapter that are required for the environmental control activities for which the environmental control costs are incurred or expected to be incurred. If the commission finds that the proceeds have been used for environmental control costs or financing costs that are not prudent, reasonable, or appropriate, the commission may adjust or reduce the energy utility’s revenue requirements in connection with charges other than environmental control charges for the purpose of ensuring that the energy utility’s customers do not pay for such costs.

196.027(4)(b) (b) An energy utility shall annually provide to its customers a concise explanation of the environmental control charges approved in a financing order issued to the energy utility. The explanation may be made by bill inserts, website information, or other appropriate means.

196.027(4)(c) (c) The failure of an energy utility to comply with this subsection shall not invalidate, impair, or affect any financing order, environmental control property, environmental control charge, or environmental control bonds.

196.027(5) (5) Environmental control property.

196.027(5)(a) (a) In general.

196.027(5)(a)1. 1. Environmental control property that is specified in a financing order shall constitute a present property right notwithstanding that the imposition and collection of environmental control charges depend on the energy utility to which the order is issued performing its servicing functions relating to the collection of environmental control charges and on future energy consumption. Such property is considered to exist whether or not the revenues or proceeds arising from the property have accrued and whether or not the value of the property is dependent on the receipt of service by customers of an energy utility.

196.027(5)(a)2. 2. Environmental control property specified in a financing order shall continue to exist until the environmental trust bonds issued pursuant to the order are paid in full and all financing costs of the bonds have been recovered in full.

196.027(5)(a)3. 3. Environmental control property specified in a financing order issued to an energy utility may be transferred, sold, conveyed, or assigned to any person, including an affiliate of the energy utility created for the limited purpose of facilitating or administering environmental control property or environmental control trust bonds under the financing order and not including any other affiliate of the energy utility. Environmental control property may be pledged to secure environmental trust bonds issued pursuant to the order. Each such transfer, sale, conveyance, assignment, or pledge by an energy utility or affiliate of an energy utility is considered to be a transaction in the ordinary course of business.

196.027(5)(a)4. 4. If an energy utility defaults on any required payment of revenues arising from environmental control property specified in a financing order, a court, upon application by an interested party, and without limiting any other remedies available to the applying party, shall order the sequestration and payment of the revenues. Any such order shall remain in full force and effect notwithstanding any bankruptcy, reorganization, or other insolvency proceedings with respect to the energy utility.

196.027(5)(a)5. 5. The interest of an assignee or pledgee in environmental control property specified in a financing order issued to an energy utility, and in the revenue and collections arising from that property, are not subject to setoff, counterclaim, surcharge, or defense by the energy utility or any other person or in connection with the bankruptcy of the energy utility or any other entity.

196.027(5)(a)6. 6. Any successor to an energy utility, whether pursuant to any bankruptcy, reorganization, or other insolvency proceeding, or pursuant to any merger or acquisition, sale, or transfer by operation of law, as a result of energy utility restructuring or otherwise, shall perform and satisfy all obligations of, and have the same rights under a financing order as, the energy utility under the financing order in the same manner and to the same extent as the energy utility including collecting and paying to the person entitled to receive them revenues with respect to the environmental control property.

196.027(5)(b) (b) Security interests. Except as otherwise provided in this paragraph, the creation, perfection, and enforcement of security interests in environmental control property to secure environmental trust bonds are governed by ch. 409. Notwithstanding ch. 409, with regard to creating, perfecting, and enforcing a valid security interest in environmental control property to secure environmental trust bonds, all of the following apply:

196.027(5)(b)1. 1. The description of environmental control property in a security agreement is sufficient if the description refers to this section and the financing order creating the environmental control property.

196.027(5)(b)2. 2. A security interest is created, valid, binding, and perfected at the time a security agreement is made and attaches without any physical delivery of collateral or other act, and the lien of such security interest shall be valid, binding, and perfected against all parties having claims of any kind in tort, contract, or otherwise against the person granting the security interest, regardless of whether such parties have notice of the lien. The filing or recording of a financial statement or instrument in which such a security interest is created is not required.

196.027(5)(b)3. 3. A security interest in environmental control property is a continuously perfected security interest and has priority over any other lien created by operation of law or otherwise, which subsequently attaches to the environmental control property.

196.027(5)(b)4. 4. The priority of a security interest created under this paragraph is not affected by the commingling of proceeds arising from environmental control property with other amounts.

196.027(5)(b)5. 5. Any changes that the commission makes to a financing order that creates the environmental control property does not affect the validity, perfection, or priority of a security interest in the environmental control property.

196.027(5)(c) (c) Sales. The sale, assignment, and transfer of environmental control property are governed by this paragraph. All of the following apply to a sale, assignment, or transfer under this paragraph:

196.027(5)(c)1. 1. The sale, assignment, or transfer is an absolute transfer of, and not a pledge of or secured transaction relating to, the seller’s right, title, and interest in, to, and under the environmental control property, if the documents governing the transaction expressly state that the transaction is a sale or other absolute transfer. After such a transaction, the environmental control property is not subject to any claims of the seller or the seller’s creditors, other than creditors holding a prior security interest in the environmental control property perfected under par. (b).

196.027(5)(c)2. 2. The characterization of the sale, assignment, or transfer as an absolute transfer under subd. 1. and the corresponding characterization of the purchaser’s property interest is not affected by any of the following factors:

196.027(5)(c)2.a. a. Commingling of amounts arising with respect to the environmental control property with other amounts.

196.027(5)(c)2.b. b. The retention by the seller of a partial or residual interest, including an equity interest, in the environmental control property, whether direct or indirect, or whether subordinate or otherwise.

196.027(5)(c)2.c. c. Any recourse that the purchaser may have against the seller.

196.027(5)(c)2.d. d. Any indemnifications, obligations, or repurchase rights made or provided by the seller.

196.027(5)(c)2.e. e. The responsibility of the seller to collect environmental control charges.

196.027(5)(c)2.f. f. The treatment of the sale, assignment, or transfer for tax, financial reporting, or other purposes.

196.027(6) (6) Environmental trust bonds not public debt. The state is not liable on environmental trust bonds and the bonds are not a debt of the state. An issue of environmental trust bonds does not, directly or indirectly or contingently, obligate the state or a political subdivision of the state to levy any tax or make any appropriation for payment of the bonds.

196.027(7) (7) Environmental trust bonds as legal investments. Any of the following may legally invest any sinking funds, moneys, or other funds belonging to them or under their control in environmental trust bonds:

196.027(7)(a) (a) The state, the investment board, municipal corporations, political subdivisions, public bodies, and public officers except for members of the public service commission.

196.027(7)(b) (b) Banks and bankers, savings and loan associations, credit unions, trust companies, savings banks and institutions, investment companies, insurance companies, insurance associations, and other persons carrying on a banking or insurance business.

196.027(7)(c) (c) Personal representatives, guardians, trustees, and other fiduciaries.

196.027(8) (8) State pledge.

196.027(8)(a) (a) In this subsection, “bondholder” means a person who holds an environmental trust bond.

196.027(8)(b) (b) The state pledges to and agrees with bondholders that the state will not do any of the following:

196.027(8)(b)1. 1. Take or permit any action that impairs the value of environmental control property.

196.027(8)(b)2. 2. Except as allowed under this section, reduce, alter, or impair environmental control charges that are imposed, collected, and remitted for the benefit of the bondholders until any principal, interest, premium, or other charge incurred, or contract to be performed, in connection with environmental trust bonds held by the bondholders are paid or performed in full.

196.027(8)(c) (c) Any person who issues environmental trust bonds is allowed to include the pledge specified in par. (b) in the bonds and relating documentation.

196.027(9) (9) Conflicts. In the event of conflict between this section and any other law regarding the attachment, assignment, or perfection, or the effect of perfection, or priority of any security interest in environmental control property, this section to the extent of the conflict shall govern.

196.027(10) (10) Effect of invalidity on actions. Effective on the date that environmental trust bonds are first issued under this section, if any provision of this section is held to be invalid or is invalidated, superseded, replaced, repealed, or expires for any reason, that occurrence shall not affect any action allowed under this section that is taken by an energy utility, an assignee, a collection agent, or a party to a transaction and any such action shall remain in full force and effect.

196.027 History History: 2003 a. 152, 326; 2011 a. 260; 2017 a. 365 s. 112.

196.029 196.029 Energy administration.

196.029(1) (1) Information. If the governor determines that a disruption of energy supplies poses a serious risk to the economic well-being, health or welfare of the citizens of this state, the governor may issue an order declaring an energy alert. Upon declaration of an energy alert by the governor, the commission may issue general or special orders, as defined in s. 101.01 (7), or promulgate emergency rules under ch. 227 to compel disclosure of information required for purposes of this section. Any person, or agent of the person, who produces, imports or sells, coal or other forms of fuel, other than electricity, natural gas or wood, who is subject to an emergency rule or general or special order of the commission within reasonable time limits specified in the order shall file or furnish such reports, information, data, copies of extracts of originals as the commission deems necessary relating to existing and future energy supplies, including but not limited to record of sales in years for 1970 and thereafter, storage capacity, supplies on hand and anticipated supplies, and anticipated demand. To the extent that the reports and data requested by the commission are presently available from other state or federal agencies, the commission shall coordinate its data reporting requirements with the agencies to avoid duplication of reporting.

196.029(2) (2) Information to be confidential. All information furnished under sub. (1) shall be considered confidential and may be compiled or published only for purposes of general statistical comparison. The information may be disclosed to agencies of the state or of the federal government, under the same or similar rules of confidentiality.

196.029(3) (3) Penalties and judicial relief.

196.029(3)(a) (a) Any person, or agent of a person, who produces, imports or sells, coal or other forms of fuel, other than electricity, natural gas or wood, who fails to provide information requested by the commission at the time and in the manner specified by the commission shall forfeit an amount not to exceed $1,000. Each day the violation of this section continues from the day notice has been received constitutes a separate offense.

196.029(3)(b) (b) Upon request of the commission, the attorney general or the district attorney of the proper county may aid in any investigation, enforce any request of the commission for information under this section or seek forfeitures for violations of this section.

196.029(3)(c) (c) Upon request of the commission, the attorney general or the district attorney of the proper county may apply to any court of competent jurisdiction for a temporary or permanent injunction restraining any person from violating this section.

196.029(3)(d) (d) The remedies under this section shall not be exclusive.

196.029(4) (4) Hearings; evidence; witness fees.

196.029(4)(a) (a) The commission or any of its authorized agents may, in relation to any matter arising under this section, conduct hearings, administer oaths, issue subpoenas and take testimony.

196.029(4)(b) (b) The witnesses subpoenaed by the commission or its agent and officers who serve subpoenas shall be entitled to the fees allowed in courts of record. The fees shall be audited and paid by the state in the same manner as other expenses of the commission are audited and paid. No witness subpoenaed at the instance of any party other than the commission is entitled to payment of fees by the state, unless the commission certifies that the testimony of the witness was material.

196.029(4)(c) (c) Any person who unlawfully fails to attend as a witness or refuses to testify may be compelled to do so as provided in s. 885.12.

196.029(4)(d) (d) A record of all hearings shall be kept by the commission. All hearings shall be public.

196.029 History History: 1977 c. 29; 1979 c. 19; 1983 a. 189 s. 329 (4); 1985 a. 236; 1989 a. 359; 1995 a. 27; 2017 a. 136 s. 2; 2017 Stats. s. 196.029.

196.029 Cross-reference Cross-reference: See also ch. Adm 40, Wis. adm. code.

196.03 196.03 Utility charges and service; reasonable and adequate.

196.03(1) (1) Subject to s. 196.63, a public utility shall furnish reasonably adequate service and facilities. The charge made by any public utility for any heat, light, water, telecommunications service or power produced, transmitted, delivered or furnished or for any service rendered or to be rendered in connection therewith shall be reasonable and just and every unjust or unreasonable charge for such service is prohibited and declared unlawful.

196.03(2) (2) For rate-making purposes the commission may consider 2 or more municipalities as a regional unit if the same public utility serves the municipalities and if the commission determines that the public interest so requires.

196.03(3) (3) 

196.03(3)(a) (a) In the case of a public utility furnishing water, the commission shall include, in the determination of water rates, the cost of fluoridating the water in the area served by the public utility furnishing water if the governing body of the city, village or town which owns or is served by the public utility furnishing water authorizes the fluoridation of water by the public utility furnishing water.

196.03(3)(b) (b) Unless the governing body of a city, village or town adopts a resolution providing that the city, village or town will pay the retail charges for the production, storage, transmission, sale and delivery or furnishing of water for public fire protection purposes that are not included in general service charges:

196.03(3)(b)1. 1. A public utility shall include the charges in the water utility bill of each customer of the public utility in the city, village or town.

196.03(3)(b)2. 2. A municipal utility may, in addition to including the charges in water utility bills under subd. 1., bill the charges to any person who meets all of the following conditions:

196.03(3)(b)2.a. a. The person is not a customer of the municipal utility.

196.03(3)(b)2.b. b. The person owns land that is located in the city, village or town and in an area in which the municipal utility has an obligation to provide water for public fire protection. If the person owns 2 or more parcels that are adjacent to each other or divided only by a roadway or brook, creek, river, or stream, the municipality may bill the person for only one parcel.

196.03(4) (4) Any public utility which is not a city, town or village and which supplies gas or electricity to its customers may not recover in rates set by the commission from any customer for any expenditure for costs in a proceeding before the commission which exceed 4 times the total amount assessed to the utility under s. 196.85 (1) and (2) unless the object of the expenditure has been ordered by the commission. The commission, by rule, shall establish procedures whereby a public utility may recover its expenditures under this subsection.