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.

Opening for Wisconsin’s Largest CNG Fueling Station in Oak Creek

EVO CNG™ and its joint venture partner, Trillium CNG™ are pleased to celebrate the Grand Opening of a the largest compressed natural gas (CNG) fueling station in Wisconsin located at 7155 South First Street in Oak Creek.

Wisconsin Governor Scott Walker was the featured guest at the event.
“It’s exciting to be here today to welcome the first EVO CNG and
Trillium CNG refueling station to Wisconsin,” said Governor
Walker. “Over the last three and a half years, we’ve worked
tirelessly to create a business friendly environment that will
encourage companies like EVO CNG and Trillium CNG to
invest in our state. I’m proud to be here today with Wisconsin’s
newest job creator.”  The Oak Creek station is the first for EVO
Trillium CNG.
“We are excited about the future of compressed natural gas as a
transportation fuel in the United States and, more specifically, in
Wisconsin,” said Danny Cuzick, President and CEO of EVO CNG.
“Wisconsin is one of the states on the leading edge of CNG
infrastructure development. EVO CNG is proud to add our name
to the list of CNG stations built specifically for fueling Class 8
tractor-trailers here in the Badger state.”

GOVERNOR’S JOBS SESSION WILL BE FOLLOWED BY NEW RECALL EFFORTS

The Wisconsin Legislature is acting on measures included in Governor Scott Walker’s second special session focusing primarily on job creation. The Governor has proposed a number of legislative initiatives including business and agricultural loan guarantees and investments and tax credits. Of particular interest to utilities and others in the business sector are additional tort reform bills. Following civil liability reforms enacted in an earlier session, the Governor has included four bills in this special session. These affect interest on judgments, immunity for manufacturers and sellers of FDA-approved drugs and devices, determining reasonable attorney fees and trespasser liability. Following the special session, politicians will immediately begin preparing for the second round of recalls expected to include Governor Walker and Republican legislators who were elected in 2010. Under current law, an elected official can only be recalled after their first year in office. Public employee union groups unhappy with Governor Walker’s collective bargaining changes have begun planning for collecting signatures allowing the recalls to move ahead.

WISCONSIN GOVERNOR WALKER SIGNS 2011-2013 STATE BUDGET BILL

On Sunday, June 26, Governor Scott Walker signed AB 40, the 2011-13 Budget Bill, into law. The $66 billion budget
balances the budget and provides a $300 million structural surplus. The governor’s action included fifty vetoes.

WISCONSIN LEGISLATURE MOVES AHEAD ON STATE BUDGET

The State’s Biennial Budget Bill is moving forward after the Joint Committee on Finance completed agency briefings and held public hearings around the state. The committee has been voting on measures in the bill. The Assembly leadership has announced that the house will only be in session during May on the 10th, 11th and 18th. It had previously scheduled other dates but has now scrapped them. Primary focus over the next two months will be on adoption of the budget which is designed to resolve the  state’s $3.6 billion budget deficit. The Republican-dominated Joint Finance Committee is expected to endorse the major items in the Governor’s original proposal, but a number of strictly policy items have been removed for separate action.   The Legislative Fiscal Bureau had released its list of 46 separate non-fiscal policy items contained in the Governor’s bill on April 20. The committee co-chairs also released a memo on April 20 outlining 21 non-fiscal policy items that would be stripped from the budget and not taken up by the Committee. The Committee expects to complete its action on the budget by the end of May, and observers believe that most of the significant changes to the Governor’s budget will be made in committee.

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