Chapter 196

196.491(3m) (3m) Wholesale merchant plants.

196.491(3m)(a) (a) Commission approval required. Except as provided in par. (e), an affiliated interest of a public utility may not own, control or operate a wholesale merchant plant without the approval of the commission. The commission shall grant its approval only if each of the following is satisfied:

196.491(3m)(a)1. 1. The public utility has transferred control over its transmission facilities, as defined in s. 196.485 (1) (h), to an independent system operator, as defined in s. 196.485 (1) (d), that is approved by the federal energy regulatory commission or the public utility has divested its interest in the transmission facilities to an independent transmission owner, as defined in s. 196.485 (1) (dm).

196.491(3m)(a)2. 2. The commission finds that the ownership, control or operation will not have a substantial anticompetitive effect on electricity markets for any classes of customers.

196.491(3m)(b) (b) Duty to promulgate rules.

196.491(3m)(b)1. 1. The commission shall promulgate rules that establish requirements and procedures for an affiliated interest to apply for an approval under par. (a). The rules shall do each of the following:

196.491(3m)(b)1.a. a. Describe the showing that an applicant is required to make for the commission to grant an approval under par. (a).

196.491(3m)(b)1.am. am. Establish screening tests and safe harbors for proposed wholesale merchant plant projects, including projects in which an affiliated interest is a passive investor and over which the affiliated interest is not able to exercise control or influence and projects in which an affiliated interest’s ownership interest is less than 5 percent.

196.491(3m)(b)1.b. b. Describe the analytical process that the commission shall use in determining whether to make a finding under par. (a) 2. and describe the factors specified in subd. 3.

196.491(3m)(b)1.c. c. Allow an interested person to request a hearing on an application under s. 227.42.

196.491(3m)(b)2. 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, as defined in s. 196.485 (1) (dr).

196.491(3m)(b)3. 3. The commission shall use the following factors in determining whether to make a finding under par. (a) 2.:

196.491(3m)(b)3.a. a. The degree of market concentration resulting from the affiliated interest’s proposed ownership, operation or control.

196.491(3m)(b)3.b. b. The extent of control that the affiliated interest proposes to exercise over the wholesale merchant plant.

196.491(3m)(b)3.d. d. Any other factor that the commission determines is necessary to determine whether to make a finding under par. (a) 2.

196.491(3m)(c) (c) Sales by affiliated interests.

196.491(3m)(c)1. 1. In this paragraph, “electric sale” means a sale of electricity that is generated at a wholesale merchant plant that is owned, operated, or controlled by an affiliated interest.

196.491(3m)(c)2. 2. The commission shall review any electric sale by an affiliated interest to a public utility with which the affiliated interest is affiliated. If the commission finds that an electric sale is not in the public interest, the commission shall do any of the following:

196.491(3m)(c)2.a. a. Disallow the public utility’s costs related to the sale in a rate-setting proceeding.

196.491(3m)(c)2.b. b. Order the public utility to provide a refund, in an amount determined by the commission, to its customers.

196.491(3m)(c)2.c. c. Order the public utility or affiliated interest to take any action that the commission determines is in the public interest, except that the commission may not order the public utility or affiliated interest to void the sale.

196.491(3m)(d) (d) Retail sales outside this state. The commission may not promulgate rules or issue orders that prohibit owners or operators of wholesale merchant plants from providing electric service to retail customers in another state.

196.491(3m)(e) (e) Exemption. An approval under par. (a) is not required for an affiliated interest to own, operate or control a wholesale merchant plant in Grant County if the affiliated interest owned, operated or controlled the wholesale merchant plant before January 1, 1998.

196.491 Cross-reference Cross-reference: See also s. PSC 100.11, Wis. adm. code.

196.491(4) (4) Exemptions.

196.491(4)(b) (b) Subsection (3) does not apply to a person that constructs electric generating equipment and associated facilities if the person satisfies each of the following:

196.491(4)(b)1. 1. The person is not a public utility or a cooperative association organized under ch. 185 for the purpose of generating, distributing or furnishing electric energy at retail or wholesale to its members only.

196.491(4)(b)2. 2. The person shows to the satisfaction of the commission that the person reasonably anticipates, at the time that construction of the equipment or facilities commences, that on each day that the equipment and facilities are in operation the person will consume no less than 70 percent of the aggregate kilowatt hours output from the equipment and facilities in manufacturing processes at the site where the equipment and facilities are located or in ferrous mineral mining and processing activities governed by subch. III of ch. 295 at the site where the equipment and facilities are located.

196.491(4)(c) (c)

196.491(4)(c)1e. 1e. In this paragraph, “centerline” means a line drawn through the centerline of an electric transmission line along its length.

196.491(4)(c)1m. 1m. Except as provided in subd. 1s., a certificate under sub. (3) is not required for a person to construct a high-voltage transmission line designed for operation at a nominal voltage of less than 345 kilovolts if not more than one-half mile of the centerline of the new high-voltage transmission line is located more than 60 feet on either side of the centerline of an existing electric transmission line operating at a nominal voltage of 69 kilovolts or more and all of the following apply:

196.491(4)(c)1m.a. a. The project will not have undue adverse environmental impacts.

196.491(4)(c)1m.b. b. The new high-voltage transmission line requires the acquisition in total of one-half mile or less of rights-of-way from landowners from which rights-of-way would not be required to be acquired for the existing electric transmission line.

196.491(4)(c)1s. 1s. A certificate under sub. (3) is not required for a cooperative association organized under ch. 185 for the purpose of producing or furnishing heat, light, power, or water to its members to construct a high-voltage transmission line designed for operation at a nominal voltage of less than 345 kilovolts if all related construction activity takes place entirely within the area of an existing electric transmission line right-of-way.

196.491(4)(c)2. 2. The commission is not required to prepare an environmental impact statement under s. 1.11 (2) (c) for construction that is specified in subd. 1m. or 1s., but shall prepare an environmental assessment regarding the construction if an environmental assessment is required under the commission’s rules.

196.491(4)(c)3. 3. If construction or utilization of a high-voltage transmission line described in subd. 1m. or 1s. is precluded or inhibited by a local ordinance, the construction and utilization of the line may nevertheless proceed.

196.491(5) (5) Service standards for electric generation, transmission and distribution facilities. The commission shall promulgate rules that establish all of the following:

196.491(5)(a) (a) Standards for inspecting, maintaining and repairing each of the following:

196.491(5)(a)1. 1. Electric generation facilities in this state that are owned by public utilities or provide service to public utilities under contracts with terms of 5 years or more.

196.491(5)(a)2. 2. Electric transmission or distribution facilities in this state that are owned by public utilities.

196.491(5)(b) (b) Standards that the commission determines are necessary for the safe and reliable operation of each of the following:

196.491(5)(b)1. 1. Electric generation facilities in this state that are owned by public utilities or provide service to public utilities under contracts with terms of 5 years or more.

196.491(5)(b)2. 2. Electric transmission or distribution facilities in this state that are owned by public utilities.

196.491(6) (6) Waiver. The commission may waive compliance with any requirement of this section to the extent necessary to restore service which has been substantially interrupted by a natural catastrophe, accident, sabotage or act of God.

196.491 History History: 1975 c. 68, 199; 1979 c. 221, 361; 1983 a. 53 s. 114; 1983 a. 192, 401; 1985 a. 182 s. 57; 1989 a. 31; 1993 a. 184; 1995 a. 27 ss. 9116 (5), 9126 (19); 1995 a. 227, 409; 1997 a. 27, 35, 204; 1999 a. 9; 1999 a. 150 s. 672; 2001 a. 16; 2003 a. 33, 89; 2005 a. 24, 29; 2007 a. 20 s. 9121 (6) (a); 2009 a. 40, 378, 379; 2011 a. 32, 155; 2011 a. 260 s. 81; 2013 a. 1, 10, 125, 173; 2015 a. 148, 344; 2017 a. 58, 136; 2019 a. 9; 2021 a. 24, 239.

196.491 Cross-reference Cross-reference: See also ch. PSC 112, Wis. adm. code.

196.491 Annotation It was reasonable for the PSC to issue a certificate conditioned on the issuance of DNR permits when legislatively imposed time constraints could not have been met if sub. (3) (e) had been strictly followed and all permits required before the issuance of the certificate. Responsible Use of Rural & Agricultural Land v. PSC, 2000 WI 129, 239 Wis. 2d 660, 619 N.W.2d 888, 99-2430.

196.491 Annotation While sub. (3) (a) 1. does not provide standards to determine if an application for a certificate of public convenience and necessity is complete, it specifically states that an application must contain the information required by PSC rules and PSC is not free to ignore those requirements in making its completeness determination. Although the PSC’s decision that an application is complete is not itself a final decision, it is nonetheless subject to judicial review. Clean Wisconsin, Inc. v. Public Service Commission, 2005 WI 93, 282 Wis. 2d 250, 700 N.W.2d 768, 04-3179.

196.491 Annotation Interpreting a PSC rule to require a certificate of public convenience and necessity applicant to file the actual regulatory approvals before the application can be deemed to be complete would conflict with sub. (3) (a) 3. a. and b. The statute expressly contemplates that an applicant will not have the required DNR permits in hand at the time the PSC must render its completeness determination. Clean Wisconsin, Inc. v. Public Service Commission, 2005 WI 93, 282 Wis. 2d 250, 700 N.W.2d 768, 04-3179.

196.491 Annotation There is nothing unreasonable in the PSC determining an application to be complete yet requesting further information to assist in its review of the certificate of public convenience and necessity application. Clean Wisconsin, Inc. v. Public Service Commission, 2005 WI 93, 282 Wis. 2d 250, 700 N.W.2d 768, 04-3179.

196.491 Annotation Sub. (3) (i) expressly withdraws the power of municipalities to act, once the PSC has issued a certificate of public convenience and necessity, on any matter that the PSC has addressed or could have addressed in that administrative proceeding. American Transmission Co., LLC v. Dane County, 2009 WI App 126, 321 Wis. 2d 138, 772 N.W.2d 731, 08-2604.

196.491 Annotation Section 196.49 (3) controls a utility’s application to construct an out-of-state electric generating facility. Sub. (3) applies exclusively to in-state facilities. Under s. 196.01 (5) (a) and s. 196.491 (1) (am), every public utility has availed itself of Wisconsin’s regulatory jurisdiction by obtaining authorization to engage in public utility business. Therefore, when the Public Service Commission reviews an application under s. 196.49 (3) it is a statutory entity that is being regulated, not a person’s activity of constructing a facility, as is the case under sub. (3). Wisconsin Industrial Energy Group v. Public Service Commission, 2012 WI 89, 342 Wis. 2d 576, 819 N.W.2d 240, 10-2762.

196.491 Annotation The Public Service Commission’s (PSC) interpretation of the reasonable needs of the public is not limited to the existing infrastructure’s ability to “keep the lights on.” Rather, PSC takes into account additional relevant factors in making its determination, such as increased reliability, economic benefits, and public policy considerations. PSC’s interpretation of “reasonable needs” comports with the intent of sub. (3) (d). Town of Holland v. Public Service Commission, 2018 WI App 38, 382 Wis. 2d 799, 913 N.W.2d 914, 17-1129.

196.494 196.494 Regional transmission planning.

196.494(1) (1) In this section:

196.494(1)(a) (a) “Electric utility” means a public utility, other than a municipal utility, as defined in s. 196.377 (2) (a) 3., that provides retail electric service to customers in this state.

196.494(1)(b) (b) “Transmission facility” means any pipe, pipeline, duct, wire, line, conduit, pole, tower, equipment or other structure used for the transmission of electric power as determined by the commission.

196.494(2) (2) The commission shall conduct a study on identifying and relieving any constraint on an intrastate or interstate electric transmission system that adversely affects the reliability of transmission service provided to electric customers in this state and shall, no later than September 1, 1998, submit a report on the results of the study to the legislature in the manner provided under s. 13.172 (2).

196.494(3) (3) The commission shall, under this subsection, issue an order requiring the transmission company, as defined in s. 196.485 (1) (ge), or 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 such construction is necessary to relieve a constraint on a transmission system and the construction will materially benefit the customers of the transmission company or 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).

196.494(4) (4) The commission shall allow an electric utility to recover in its retail electric rates any costs that are prudently incurred by the utility in complying with an order under sub. (3).

196.494(5) (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:

196.494(5)(a) (a) Compliance with each state’s environmental and siting standards for transmission facilities.

196.494(5)(b) (b) A regional need determination for transmission facilities.

196.494(5)(c) (c) A mechanism for resolving conflicts between the states regarding the siting of transmission facilities.

196.494 History History: 1997 a. 204; 1999 a. 9.

196.495 196.495 Avoidance of duplication in electric facilities.

196.495(1) (1) 

196.495(1)(a) (a) In this section:

196.495(1)(a)1. 1. “Primary voltage extension” means an extension of 500 feet or more.

196.495(1)(a)2. 2. “Secondary voltage extension” means an extension that is less than 500 feet.

196.495(1)(b) (b) The length of an extension shall be measured as the air line distance between an existing local service distribution line that normally operates at less than 35 kilovolts and the nearest point on the principal building or facility to be served by a primary voltage extension or a secondary voltage extension.

196.495(1m) (1m) No public utility, and no cooperative association organized under ch. 185 for the purpose of furnishing electric service to its members only, may:

196.495(1m)(a) (a) Extend or render electric service directly or indirectly to the premises of any person already receiving electric service directly or indirectly from another public utility or another cooperative association.

196.495(1m)(b) (b) Make a primary voltage extension to serve the premises of any person not receiving electric service and to which service is available from the facilities of another public utility or another such cooperative association through a secondary voltage extension, unless the other public utility or cooperative association consents to the primary voltage extension in writing or unless the commission, after notice to the interested parties and hearing, determines that the service rendered or to be rendered by the other public utility or cooperative association is inadequate and is not likely to be made adequate, or that the rates charged for service are unreasonable and are not likely to be made reasonable.

196.495(2) (2) If a public utility is rendering electric service under an indeterminate permit to a city or village, no cooperative association may extend any new electric service to the premises of any person inside the corporate limits, existing on January 1, 1961, of the city or village without the written consent of the public utility. Within any area annexed to a city or village after January 1, 1961, in which annexed area a cooperative association or public utility, other than the public utility serving the city or village under an indeterminate permit, has electric distribution facilities at the time of the annexation, the cooperative association or other public utility may make a primary voltage extension or a secondary voltage extension in the annexed area, subject to sub. (1m).

196.495(2m) (2m) The distribution service facilities of a cooperative association or public utility rendering electric service in an annexed area under sub. (2) shall be subject to acquisition under ch. 197 by a city or village if the city or village operates or proposes to operate its own electric public utility.

196.495(3) (3) Nothing in this section shall preclude any public utility or any cooperative association from extending electric service to its own property or facilities or to another cooperative association for resale.

196.495(4) (4) To avoid duplication of facilities, a public utility and a cooperative association may enter into a written agreement governing the extension of electric distribution lines and the right to serve customers. The commission shall enforce an agreement if the agreement has been filed with the commission and approved by the commission as being in the public interest.

196.495(5) (5) If an interested party files a complaint with the commission that an electric public utility or a cooperative association has made a primary voltage extension that requires approval or consent under this section without obtaining approval or consent, the commission shall hear the complaint upon notice to the interested parties. If the commission determines that the primary voltage extension was made in violation of this section, it shall order the prompt removal of the primary voltage extension.

196.495(6) (6) A cooperative association shall be subject to the authority of the commission to enforce the provisions of this section and to issue rules and orders relating to the provisions.

196.495(7) (7) A cooperative association shall be subject to the authority of the commission to allocate, assess and collect expenditures of the commission against a cooperative association involved in a proceeding under this section in the same manner as provided for public utilities under s. 196.85.

196.495 History History: 1971 c. 125 s. 521; 1983 a. 53; 1991 a. 94.

196.495 Cross-reference Cross-reference: See also s. PSC 112.08, Wis. adm. code.

196.495 Annotation Although one utility was serving a farm, when the farm was annexed to a city and a large shopping center was built, the utility having an indeterminate permit to serve the city could not be barred from serving the area; the PSC should determine which utility should serve the area. Adams-Marquette Electric Cooperative v. PSC 51 Wis. 2d 718, 188 N.W.2d 515 (1971).

196.495 Annotation The “premises of a person already receiving electrical service” refers to the premises to be served, not the person. Adams-Marquette Electric Cooperative v. PSC 51 Wis. 2d 718, 188 N.W.2d 515 (1971).

196.495 Annotation The application of this section is discussed. A court’s order to a utility violating this section to remove the offending line or sell it to the utility who should have provided the service was within the authority granted by sub. (5). Barron Electric Cooperative v. PSC, 212 Wis. 2d 752, 569 N.W.2d 726 (Ct. App. 1997), 97-0420.

196.496 196.496 Distributed generation facilities.

196.496(1) (1) Definition. In this section, “distributed generation facility” means a facility for the generation of electricity with a capacity of no more than 15 megawatts that is located near the point where the electricity will be used or is in a location that will support the functioning of the electric power distribution grid.

196.496(2) (2) Rules. The commission shall promulgate rules establishing standards for the connection of distributed generation facilities to electric distribution facilities. To the extent technically feasible and cost effective, the standards shall be uniform and shall promote the development of distributed generation facilities. The standards shall address engineering, electric reliability, and safety concerns and the methods for determining charges for interconnection.