Chapter 196

196.52(3)(a) (a) In this subsection, “contract or arrangement” means a contract or arrangement providing for the furnishing of management, supervisory, construction, engineering, accounting, legal, financial or similar services and any contract or arrangement for the purchase, sale, lease or exchange of any property, right, or thing, or for the furnishing of any service, property, right, or thing, other than management, supervisory, construction, engineering, accounting, legal, financial or similar services, but “contract or arrangement” does not include a contract or arrangement under which a transmission utility, as defined in s. 196.485 (1) (i), sells or transfers securities, as defined in s. 196.485 (1) (fe), that have been issued by a transmission company, as defined in s. 196.485 (1) (ge). Except as provided under par. (b), unless and until the commission gives its written approval, any contract or arrangement is not valid or effective if the contract or arrangement is made between a public utility and an affiliated interest after June 7, 1931. Every public utility shall file with the commission a verified copy of any contract or arrangement, a verified summary of any unwritten contract or arrangement, and any contract or arrangement, written or unwritten, which was in effect on June 7, 1931. The commission shall approve a contract or arrangement made or entered into after June 7, 1931, only if it shall clearly appear and be established upon investigation that it is reasonable and consistent with the public interest. The commission may not approve any contract or arrangement unless satisfactory proof is submitted to the commission of the cost to the affiliated interest of rendering the services or of furnishing the property or service to each public utility or of the cost to the public utility of rendering the services or of furnishing the property or service to each affiliated interest. No proof is satisfactory under this paragraph unless it includes the original (or verified copies) of the relevant cost records and other relevant accounts of the affiliated interest, or an abstract of the records and accounts or a summary taken from the records and accounts if the commission deems the abstract or summary adequate. The accounts shall be properly identified and duly authenticated. The commission, where reasonable, may approve or disapprove a contract or arrangement without submission of the cost records or accounts.

196.52(3)(b) (b)

196.52(3)(b)1. 1. The requirement for written approval under par. (a) shall not apply to any contract or arrangement if the amount of consideration involved is not in excess of the threshold amount under subd. 1m. or 5 percent of the equity of the public utility, whichever is smaller. The requirement under par. (a) also does not apply to contracts or arrangements with joint local water authorities under s. 66.0823. Regularly recurring payments under a general or continuing arrangement which aggregate a greater annual amount may not be broken down into a series of transactions to come within the exemption under this paragraph. Any transaction exempted under this paragraph shall be valid or effective without commission approval under this section.

196.52(3)(b)1m. 1m. The threshold amount under subd. 1. is $250,000, except that in 2014 and biennially thereafter, the commission shall adjust such threshold amount to reflect adjustments to the U.S. consumer price index for all urban consumers, U.S. city average, as determined by the U.S. department of labor, and disseminate the adjusted threshold on the commission’s website.

196.52(3)(b)2. 2. In any proceeding involving the rates or practices of the public utility, the commission may exclude from the accounts of the public utility any payment or compensation made pursuant to a transaction exempted under this paragraph unless the public utility establishes the reasonableness of the payment or compensation.

196.52(3)(c) (c) If the value of a contract or arrangement between an affiliated interest and a public utility exceeds $1,000,000, the commission:

196.52(3)(c)1. 1. May not waive the requirement of the submission of cost records or accounts under par. (a);

196.52(3)(c)2. 2. Shall review the accounts of the affiliated interest as they relate to the contract or arrangement prior to the commission approving or disapproving the contract or arrangement under par. (a); and

196.52(3)(c)3. 3. May determine the extent of cost records and accounts which it deems adequate to meet the requirements for submission and review under subds. 1. and 2.

196.52(3)(d) (d)

196.52(3)(d)1. 1. If a hearing is held on an application under this subsection, the commission shall take final action on the application within 180 days after the commission issues a notice of hearing on the application. 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 approved the application.

196.52(3)(d)2. 2. If a hearing is not held on an application under this subsection, the commission shall take final action on the application within 90 days after the commission issues a notice opening a docket on the application. 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 approved the application.

196.52(4) (4) 

196.52(4)(a) (a) In any proceeding, whether upon the commission’s own motion or upon application or complaint, involving the rates or practices of any public utility, the commission may exclude from the accounts of the public utility any payment or compensation to or from an affiliated interest for any services rendered or property or service furnished under an existing contract or arrangement with an affiliated interest under sub. (3) (a) unless the public utility establishes the reasonableness of the payment or compensation.

196.52(4)(b) (b) The commission shall disallow the payment or compensation described in par. (a), in whole or in part, in the absence of satisfactory proof that the payment or compensation is reasonable in amount.

196.52(4)(c) (c) The commission may not approve or allow any payment or compensation described in par. (a), in whole or in part, unless satisfactory proof is submitted to the commission of the cost to the affiliated interest of rendering the service or furnishing the property or service to each public utility or of the cost to the public utility of rendering the service or furnishing the property or service to each affiliated interest.

196.52(4)(d) (d) No proof shall be satisfactory under this subsection unless it includes the original or verified copies of the relevant cost records and other relevant accounts of the affiliated interest, or an abstract of the records and accounts or a summary taken from the records and accounts if the commission deems the abstract or summary adequate. The accounts shall be properly identified and duly authenticated. The commission, where reasonable, may approve or disapprove a contract or arrangement without submission of the cost records or accounts.

196.52(5) (5) The commission shall have continuing supervisory control over the terms and conditions of contracts and arrangements under this section as necessary to protect and promote the public interest. The commission shall have the same jurisdiction over the modifications or amendment of contracts or arrangements as it has over original contracts or arrangements. Commission approval of a contract or arrangement under this section shall not preclude disallowance or disapproval of a payment under the contract or arrangement if upon actual experience under the contract or arrangement it appears that the payments provided for or made were or are unreasonable. Every order of the commission approving a contract or arrangement shall be expressly conditioned upon the reserved power of the commission to revise and amend the terms and conditions of the contract or arrangement to protect and promote the public interest.

196.52(6) (6) If the commission finds upon investigation that a public utility is giving effect to a contract or arrangement without the commission’s approval under this section, the commission shall issue a summary order directing that public utility to cease and desist from making any payments, receiving compensation, providing any service or otherwise giving any effect to the contract or arrangement until the contract or arrangement receives the approval of the commission. The circuit court of Dane County may enforce the order to cease and desist by appropriate process, including the issuance of a preliminary injunction, upon the suit of the commission.

196.52(7) (7) If the commission finds upon investigation that a public utility is making a payment to, providing a service to or receiving compensation from an affiliated interest, although the payment, service or compensation has been disallowed and disapproved by the commission in a proceeding involving the public utility’s rates or practices, the commission shall issue a summary order directing the public utility to cease and desist from making the payment, providing the service or receiving the compensation. The circuit court of Dane County may enforce the order to cease and desist by appropriate process, including the issuance of a preliminary injunction, upon the suit of the commission.

196.52(8) (8) Nothing in this section prevents a public utility from investing equity capital which is in excess of the level of equity that the commission has determined to be appropriate for the utility’s capital structure in a subsidiary without commission approval.

196.52(9) (9) 

196.52(9)(a) (a) In this subsection:

196.52(9)(a)1. 1. “Electric generating equipment” means any of the following:

196.52(9)(a)1.a. a. An electric generator.

196.52(9)(a)1.b. b. A machine that drives an electric generator, including an engine, turbine, water wheel, or wind mill.

196.52(9)(a)1.c. c. Equipment that converts a fuel or source of energy into energy that powers a machine that drives an electric generator, including a boiler, but not including a nuclear reactor.

196.52(9)(a)1.d. d. A fuel or photovoltaic cell.

196.52(9)(a)2. 2. “Electric generating facility” means electric generating equipment and associated facilities that, together, constitute a complete facility for the generation of electricity.

196.52(9)(a)3. 3. “Leased generation contract” means a contract or arrangement or set of contracts or arrangements under which an affiliated interest of a public utility agrees with the public utility to construct or improve an electric generating facility and to lease to the public utility land and the facility for operation by the public utility.

196.52(9)(b) (b) The commission may approve a leased generation contract under sub. (3) only if all of the following apply:

196.52(9)(b)1. 1. The commission has not issued a certificate under s. 196.49 or a certificate of public convenience and necessity under s. 196.491 (3) before January 1, 2002, for any construction or improvement that is subject to the leased generation contract.

196.52(9)(b)2. 2. Construction or improvement of the electric generating facility that is subject to the leased generation contract commences on or after January 1, 2002.

196.52(9)(b)3. 3. Except as provided in s. 196.795 (5) (k) 3., no electric generating facility, electric generating equipment, or associated facilities, held or used by the public utility for the provision of electric service, is transferred to the affiliated interest.

196.52(9)(b)4. 4. The estimated gross cost of the construction or improvement that is subject to the leased generation contract is at least $10,000,000.

196.52(9)(b)5. 5. The construction or improvement is not to a nuclear-powered facility.

196.52(9)(b)6. 6. Any real property that the public utility transfers to the affiliated interest for the purpose of implementing the leased generation contract is transferred at book value, which is determined on the basis of the regulated books of account at the time of the transfer.

196.52(9)(b)7. 7. If the public utility transfers real property to the affiliated interest for the purpose of implementing the leased generation contract, the leased generation contract provides for transferring that real property back to the public utility, on the same terms and conditions as the original transfer, if the commission determines that the construction or improvement that is subject to the leased generation contract has not been completed.

196.52(9)(b)8. 8. The leased generation contract provides that, upon termination of the contract, all of the following apply:

196.52(9)(b)8.a. a. The public utility shall have the option, subject to commission approval, to extend the contract, or purchase the electric generating facility or the improvements to an electric generating facility, at fair market value as determined by a valuation process that is conducted by an independent 3rd party and that is specified in the contract.

196.52(9)(b)8.b. b. If the public utility exercises the option specified in subd. 8. a., the affiliated interest may require the public utility to extend the contract, rather than purchase the facilities or improvements, if the affiliated interest demonstrates to the commission that the extension avoids material adverse tax consequences and that the extension provides terms and conditions that are economically equivalent to a purchase.

196.52(9)(b)9. 9. For any gas-fired electric generating facility that is constructed under the leased generation contract, the term of the lease is 20 years or more.

196.52(9)(b)10. 10. For any coal-fired electric generating facility that is constructed under the leased generation contract, the term of the lease is 25 years or more.

196.52(9)(b)11. 11. The leased generation contract does not take effect until the date on which the affiliated interest commences construction or improvement of the electric generating facility, except that, if the leased generation contract relates to the construction or improvement of more than one electric generating facility, the leased generation contract does not take effect with respect to the construction or improvement of an individual electric generating facility until the date on which the affiliated interest commences construction or improvement on that electric generating facility.

196.52(9)(c) (c) Except as provided in par. (d), the commission may not increase or decrease the retail revenue requirements of a public utility on the basis of any income, expense, gain, or loss that is received or incurred by an affiliated interest of the public utility and that arises from the ownership of an electric generating facility or an improvement to an electric generating facility by an affiliated interest under a leased generation contract.

196.52(9)(d) (d) The commission shall allow a public utility that has entered into a leased generation contract that has been approved by the commission under sub. (3) to recover fully in its retail rates that portion of any payments under the leased generation contract that the commission allocates to the public utility’s retail electric service, and that portion of all other costs that is prudently incurred in the public utility’s operation and maintenance of the electric generating facility or improvement that is subject to the leased generation contract and that the commission allocates to the public utility’s retail electric service.

196.52(9)(e) (e) Notwithstanding sub. (5), the commission may not modify or terminate a leased generation contract approved under sub. (3) except as specified in the leased generation contract or the commission’s order approving the leased generation contract.

196.52(9)(f) (f) The commission shall maintain jurisdiction to ensure that the construction or improvement under a leased generation contract approved under sub. (3) is completed as provided in the leased generation contract.

196.52(9)(g) (g) Nothing in this subsection prohibits a cooperative association organized under ch. 185, a municipal utility, as defined in s. 196.377 (2) (a) 3., or a municipal electric company, as defined in s. 66.0825 (3) (d), from acquiring an interest in an electric generating facility that is constructed pursuant to a leased generation contract or from acquiring an interest in land on which such an electric generating facility is located.

196.52 History History: 1981 c. 390; 1983 a. 53, 538; 1985 a. 297; 1993 a. 496; 1995 a. 225; 1997 a. 184; 1999 a. 9; 1999 a. 150 s. 672; 1999 a. 162; 2001 a. 16; 2005 a. 253; 2011 a. 22, 155; 2015 a. 299; 2017 a. 365 s. 112.

196.52 Cross-reference Cross-reference: See also chs. PSC 100 and 113, Wis. adm. code.

196.525 196.525 Loans to officers or directors and loans to and investments in securities of holding companies; penalty.

196.525(1) (1) Except under rules prescribed by the commission, a public utility may not lend funds or credit to any of its officers or directors by any of the following and a public utility other than a telecommunications utility may not lend funds or credit to any corporation, except a public utility subject to the regulatory powers of the commission, if the corporation holds, directly or indirectly through any chain of ownership, 5 percent or more of the voting stock of the public utility or renders any managerial, supervising, engineering, legal, accounting or financial service to the public utility by any of the following:

196.525(1)(a) (a) Becoming surety, guarantor or endorser upon any obligations, contingent or otherwise, of the officer, director or corporation.

196.525(1)(b) (b) Loaning funds, securities or other like assets to the officer, director or corporation.

196.525(1)(c) (c) Purchasing in the open market, or otherwise, any obligation upon which the officer, director or corporation may be liable solely or jointly with others.

196.525(2) (2) Any contract made in violation of this section shall be void and subject to cancellation and recoupment by action at law. If a contract is made contrary to the provisions of this section, the commission, after notice and hearing, may order the public utility to take steps within 30 days to recover the funds or assets thus illegally loaned or transferred by action at law or other proceedings which will effectively release the public utility from the contract as surety, guarantor or endorser.

196.525(3) (3) Any director, treasurer or other officer or agent of a public utility who makes or votes to authorize a transaction in violation of this section may be fined not more than $10,000.

196.525(4) (4) The provisions of this section shall extend to the renewal or extension of existing contracts.

196.525 History History: 1983 a. 53; 1993 a. 496.

196.53 196.53 Franchise, foreign corporation not to have. No license, permit or franchise to own, operate, manage or control any plant or equipment for the production, transmission, delivery or furnishing of heat, light, water or power may be granted or transferred to a foreign corporation. This section does not apply to an independent system operator, as defined in s. 196.485 (1) (d), or an independent transmission owner, as defined in s. 196.485 (1) (dm), that is approved by the applicable federal agency, as defined in s. 196.485 (1) (c), and that controls transmission facilities, as defined in s. 196.485 (1) (h), in this and another state.

196.53 History History: 1985 a. 297; 1993 a. 496; 1997 a. 204.

196.53 Annotation This section does not violate the interstate commerce clause of the U. S. constitution. Alliant Energy Corporation v. Bie, 330 F.3d 904 (2003).

196.54 196.54 Indeterminate permits.

196.54(1) (1) Grants to be indeterminate. Every license, permit or franchise granted after July 11, 1907, to any public utility shall have the effect of an indeterminate permit subject to this chapter and ch. 197.

196.54(2) (2) Franchises made indeterminate. Every license, permit or franchise granted prior to July 11, 1907, by the state or by a municipality authorizing and empowering the grantee to own, operate, manage or control within this state, either directly or indirectly, a public utility or any part of a public utility is altered and amended to constitute and be an indeterminate permit which is subject to this chapter and ch. 197. The license, permit or franchise shall have the same force and effect as a license, permit or franchise granted after July 11, 1907, to any public utility, except as provided under s. 197.02.

196.54(3) (3) Validation of franchises and permits.

196.54(3)(a) (a) No franchise affected by sub. (2) and no indeterminate permit shall be declared invalid if:

196.54(3)(a)1. 1. The franchise or permit was not obtained by fraud, bribery or corrupt practices.

196.54(3)(a)2. 2. When the franchise or permit was granted, no officer of the municipality granting the franchise or permit was directly or indirectly interested in the franchise or permit or in the corporation obtaining the franchise or permit.

196.54(3)(b) (b) Any franchise affected by sub. (2) and any indeterminate permit is valid if:

196.54(3)(b)1. 1. The corporation having the franchise or permit, prior to surrendering of the franchise or at the beginning of its public service under the permit, in good faith has purchased or constructed any public utility, or any part of a public utility authorized by the franchise.

196.54(3)(b)2. 2. The corporation, in obtaining the franchise or permit, has substantially complied with the requirements provided by law for obtaining the franchise or permit.

196.54(4) (4) Grants after July 11, 1907; consent to municipal purchase. If a public utility accepts or operates under any license, permit or franchise granted after July 11, 1907, the public utility shall be deemed to have consented under its indeterminate permit to a future purchase of its property actually used and useful for the convenience of the public by the municipality in which the major part of it is situated for the compensation and under the terms and conditions determined by the commission. The public utility shall be deemed to have waived the right to require that the necessity of taking be established by the verdict of a jury, and any other remedy or right relative to condemnation, except any remedy or right under this chapter and ch. 197.

196.54(5) (5) Municipal purchase invalidates permit. An indeterminate permit shall be invalid if a municipality exercises its option to purchase the public utility being operated under the permit or if the permit is otherwise terminated according to law.

196.54(6) (6) Applicability. This section does not apply to a telecommunications utility.

196.54 History History: 1981 c. 390; 1983 a. 53 ss. 69 to 73; 1983 a. 192; 1993 a. 496.

196.58 196.58 Municipality to regulate utilities; appeal.

196.58(1g) (1g) In this section, “municipal regulation” has the meaning given in s. 182.017 (1g) (bm).

196.58(1r) (1r) The governing body of every municipality may:

196.58(1r)(a) (a) Determine by municipal regulation the quality and character of each kind of product or service to be furnished or rendered by any public utility within the municipality and all other terms and conditions, consistent with this chapter and ch. 197, upon which the public utility may be permitted to occupy the streets, highways or other public places within the municipality. The municipal regulation shall be in force and on its face reasonable.

196.58(1r)(b) (b) Require of any public utility any addition or extension to its physical plant within the municipality as shall be reasonable and necessary in the interest of the public, and designate the location and nature of the addition or extension, the time within which it must be completed, and any condition under which it must be constructed, subject to review by the commission under sub. (4).

196.58(1r)(c) (c) Provide a penalty for noncompliance with the provisions of any municipal regulation adopted under this subsection.

196.58(4) (4) 

196.58(4)(a) (a) Upon complaint made by a public utility or by any qualified complainant under s. 196.26, the commission shall set a hearing and if it finds a municipal regulation under sub. (1r) to be unreasonable, the municipal regulation shall be void.

196.58(4)(b) (b) Notwithstanding any provision of this chapter, upon complaint by a telecommunications provider, including an alternative telecommunications utility, or a video service provider, the commission shall set a hearing and, if it finds to be unreasonable any municipal regulation relating to any product or service rendered by any such provider within a municipality or relating to the terms and conditions upon which such provider occupies the streets, highways, or other public places within the municipality, the municipal regulation shall be void.

196.58(4)(c) (c) Notwithstanding s. 182.017 (2), a municipal regulation is unreasonable under par. (a) or (b) if it requires a public utility, telecommunications provider, or video service provider to pay any part of the cost to modify or relocate the public utility’s, telecommunications provider’s, or video service provider’s facilities to accommodate an urban rail transit system, as defined in s. 182.017 (1g) (ct).

196.58(5) (5) The commission shall have original and concurrent jurisdiction with municipalities to require extensions of service and to regulate service of public utilities. Nothing in this section shall limit the power of the commission to act on its own motion to require extensions of service and to regulate the service of public utilities.

196.58(6) (6) No public utility furnishing and selling gaseous fuel or undertaking to furnish or sell gaseous fuel in a municipality where the fuel has not been sold previously to the public shall change the character or kind of fuel by substituting for manufactured gas any natural gas or any mixture of natural and manufactured gas for distribution and sale in any municipality, or undertake the sale of natural gas in any municipality where no gaseous fuel was previously sold, unless the governing body of the municipality, by authorization, passage or adoption of appropriate municipal regulation, approves and authorizes the change in fuel or commencement of sale. No municipal regulation enacted under this subsection may be inconsistent or in conflict with any certificate granted under s. 196.49.