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Budget Restores Funding for Citizens Utility Board Advocacy

The Wisconsin state budget, recently signed into law, restores in part a funding cut enacted by the
Legislature in the 2015-17 budget. That cut led to cutbacks at the Citizens Utility Board, a residential
customer advocacy group in existence since 1979.

The Legislature endorsed Governor Scott Walker’s proposal to boost funding for intervenors to $742,500 a year after the Legislature cut the funding from more than $1 million a year to $371,000 per year in 2015. The funding increase was supported by state utilities.

CUB said it was appreciative of the support it received from a variety of energy industry stakeholders and for the testimony of PSC Chair Ellen Nowak before the Legislature’s Joint Finance Committee.

Legislative Update

The 2017-18 Legislature convened its first regular session in January of this year.
In February, Governor Walker introduced his Biennial Budget proposal (AB 64/SB 30)
which governs the state’s taxing and spending for the next two years beginning in July
2017. The Legislature’s Joint Finance Committee has begun its review of the proposal
and the Budget is expected to occupy most of the Legislature’s time and attention until
the bill finally passes in late June.

Of significant interest to utility shareholders, legislation has been introduced by Senator
Stroebel and Representative Ott (SB 115) that will allow the Wisconsin Public Service
Commission (PSC) to retroactively modify or terminate, existing and previously approved,
leased generation contracts. Currently, under such contracts, public utilities are able to
lease electrical generating facilities from their affiliates. This type of financing arrangement
has been used in Wisconsin to facilitate the investment of billions of dollars in new generation
facilities in recent years.

Under current law, the PSC may modify or terminate such contracts only as specified in the
contract itself, or the original order approving the original contract. Under the provisions of
SB115, the Public Service Commission could unilaterally invalidate or modify these contracts
which could significantly impact a utilities rate of return and dividend payout.

The sponsors of the bill believe that modifying these existing contracts will force a
reduction in electric rates. However, the current rates are necessary to generate a fair rate
of return for utility shareholders based on the recent investments Wisconsin utilities have
made in new electric generation.

If this proposal makes investment in Wisconsin utility stock less attractive for many small
investors, it will become more difficult for Wisconsin utilities to raise the necessary capital
to maintain and upgrade our electrical system. In the long run, this hurts consumers
who will have to pay even higher rates to finance the additional borrowing and internally
generated capital needed to replace their equity investment.

Investors seeking stability and reliability have the choice of investing in a wide range
of electric utilities across the country. To the extent that Wisconsin utilities become a
less attractive investment option, shareholders can go elsewhere, while consumers in
Wisconsin are simply left with higher electric rates.

Wisconsin utilities, WUI and many key legislative leaders have already expressed concern
over this bill. You can add your voice of opposition by attending WUI’s Legislative Day in
Madison on May 24, 2017.

Announcing the WUI 2017 Day at the Capitol! Registration Now Open.

 

 

 


Click Here to Register


You’re Invited to
Get Plugged In!

This is your opportunity to let your representatives know what is important to you as a Utility Investor! You will hear from legislative leaders about the current issues affecting your investments, have opportunities to meet with your representatives at the Capitol, and share lunch with your fellow WUI members at the newly renovated Park Inn Hotel (formerly Inn on the Park).

AGENDA:
9:30 am Registration
10:00 am Meeting  & Guest Speaker
11:15  am Scheduled Legislative Meetings
12:30 pm Lunch
12:45 pm Luncheon Speaker
1:20 pm Wrap up & Home

INVITED GUEST SPEAKERS:
Governor Scott Walker
Commissioner Mike Huebsch

YOUR DAY AT THE CAPITOL:
You can drive to Madison or ride one of the comfortable coach buses provided by WUI.  (Click on registration link to learn more.)
Valet parking is available
at the Inn on the Park.

 

2015-16 LEGISLATIVE SESSION FINAL REPORT

The Wisconsin Legislature adjourned the regular 2015-16
Session in mid-March skipping the scheduled April floor
period. The closing days of the session saw a flurry of
activity with literally hundreds of bills passing in the closing
days of the floor period. This included action on a number
of bills of interest to utilities and the energy industry.

Outlined below is a summary of the legislation WUI actively
supported during the session which passed both houses
and were signed into law by the Governor.

Weight Limits, AB 122 – This bill exempts utility vehicles
from seasonal weight limits on Class B highways when they
are being utilized to restore utility power after an outage.
The bill was amended to include utility contractors operating
under the same circumstances.
Natural Gas Easements, AB 319 – This bill will require
local governments to grant easements to property under
their jurisdiction to a natural gas utility if the Public Service
Commission finds it’s in the public interest and issues a
“certificate of authority.” The bill incorporates the same
timelines and arbitration procedures that exist under current
law for electric transmission lines.
Nuclear Moratorium, AB 384 – This bill eliminates the
requirements in current law that,
a) there is an operational nuclear waste disposal facility in
the United States and
b) the PSC finds it to be “economically advantageous” in
order to approve the construction of a proposed nuclear
power plant in Wisconsin. These provisions served as a
virtual moratorium on new nuclear power. Passage of this
bill will allow nuclear power to be considered as an option
in the future.
Environmental Liability, SB 545 – This bill allows the
DNR to grant exemptions from ongoing environmental
liability under the Voluntary Party Liability Exemption
program to site remediation projects where the
contaminants are found in lake or river sediment. Site
remediation of old manufactured gas plants often involve
the clean-up of river sediment.
PSC Reform Bill, AB 804 – This bill will make a number
of technical changes to update obsolete statutes, eliminate
duplicative requirements and generally streamline
procedures.
Specific items of interest to electric utilities include:

Eliminate Double Collections: The bill clarifies that the 1.2
percent of utility revenues collected from customers to fund
Focus on Energy applies to retail electric sales only.

Eliminate Unnecessary Filings: The bill eliminates the
requirement to file an annual SO2 emission compliance plan
with the Public Service Commission and the DNR.

Permit Streamlining: The bill allows the DNR to issue
permits with respect to transmission siting prior to final
approval of the project by PSC; prohibits the DNR from
requiring the relocation of facilities as a permit condition
when granting permits for the purposes of maintaining or
repairing utility facilities; and exempts projects involving
the rebuild of existing transmission lines from the
requirement to obtain a “certification or approval” from
the PSC under certain circumstances.

Digger’s Hotline: The bill shifts enforcement of the
Digger’s Hotline law from local district attorneys to the
Public Service Commission.

WISCONSIN ASSEMBLY COMPLETES WORK IN 2016 SESSION

The Wisconsin Assembly concluded what is expected to be
its final floor session on February 18, 2016. The State
Senate plans to return in mid-March for its last floor session
before adjourning for the year. The frenzy of legislative
activity in February included action on a number of energy
issues.

The Senate approved AB 384 that will lift the so-called
nuclear moratorium in Wisconsin. It had passed the
Assembly earlier this year. This legislation eliminates
significant legal hurdles that would have all but prohibited
the siting of a new nuclear plant in Wisconsin should one
be proposed in the future. The bill is awaiting the
Governor’s signature.

The State Assembly also passed a utility regulatory reform
measure, AB 804, which includes provisions streamlining
transmission siting and certain environmental regulatory
processes. This bill is expected to receive Senate approval
when it reconvenes in mid-March.

On the legal front, the U.S. Supreme Court recently stayed
the implementation of the EPA’s Clean Power Plan,
pending resolution of the underlying legal challenge brought
by 27 states including Wisconsin. This federal regulation
would require utilities to significantly reduce carbon dioxide
emission by 2030.  The State’s challenge is currently
pending before the District of Columbia Circuit Court of
Appeals which is set to hear oral arguments June 2 of this
year. The case is likely to be ultimately decided by the
Supreme Court in 2017 at the earliest.

Legislative and Energy Policy Update by James Buchen, WUI Executive Director

James Buchen, WUI Executive Director

The Wisconsin Legislature is
moving at a frenzied pace to
wrap up the 2015-16 session.
They were originally scheduled
to adjourn in April but the
leadership has indicated they
plan to take final action on
pending bills by the end of
February.  As a result things
are moving quickly by
legislative standards with as
many as a dozen hearings a
day on 40 or more bills.

 

There has been relatively little by way of energy policy
discussed in the Capitol this session. The utilities have
pursued a number of minor policy changes such as
legislation that would allow utility vehicles to exceed
seasonal weight limits on highways when responding to
a power outage and a bill that would extend utility aid
payments to counties and municipalities for 5 years, after
a property tax exempt generating facility is shut down.
There was little opposition to these measures and they
passed both houses and were signed into law by the
Governor.

One issue that has received more attention this session
is a bill that would repeal the virtual moratorium on the
construction of nuclear power plants in Wisconsin. With
concerns over global warming and carbon dioxide emissions
from coal fired power plants growing, there is renewed
interest in nuclear power as a zero emission option.  While
no company has proposed building a nuclear facility in
Wisconsin, passage of this bill would eliminate one legal
hurdle, if such a proposal emerged in the future. The bill
passed the State Assembly in January and is awaiting a
vote in the State Senate.  Perhaps the biggest energy policy
issues facing Wisconsin, as well as the rest of the country,
is implementation of the Federal Clean Power Plan, which
requires Wisconsin utilities to reduce carbon dioxide
emissions by 41 percent by the year 2030. Carbon dioxide
is a natural by-product of burning fossil fuels.  Utility CO2
emissions in 2012 amounted to 1996 lbs. per megawatt
hour of power generation.  As a result, achieving reductions
of this magnitude will be a daunting task.

Under the federal regulation the specific plans on how to
achieve reductions of this magnitude is left to the states.
Wisconsin utilities are looking to the Department of Natural
Resources to develop a plan so they can begin their planning
process to achieve compliance by the various deadlines in
the federal rule. The rule has triggered lawsuits from the
various states and could be affected by the outcome of the
Presidential election. This promises to remain a contentious
energy policy issue in the years ahead.

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