Wisconsin Utility Regulation Report

The SEA identifies, describes, and assesses different aspects of Wisconsin’s electric energy picture for the next seven years. The SEA evaluates the adequacy and reliability of the state’s current and future electrical supply (Wis. Stat. § 196.491(2)(a)). The purpose of this EA is to discuss generic issues presented in the SEA and describe their potential environmental impacts. Copies can be downloaded at http://www.psc.wi.gov.

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From the Executive Summary to the Legislature:

2005 Wisconsin Act 141 § 102(7)(b) directs that no later than July 1, 2008, the Public Service Commission shall submit a report to the governor and chief clerk of each house that consists of its recommendations on whether any component of an energy utility’s revenue requirement should be itemized on ratepayer bills. On March 20, 2008, the Commission issued a Notice of Investigation (NOI) to consider this issue. Commission staff examined bills from various Wisconsin utilities and utilities in other states and sought stakeholder input through the NOI. Based on its review of utility bills and stakeholder comments, Commission staff developed five options to be considered:

(1) Status Quo or leave bills as they currently appear;

(2) Eliminate all non-energy itemizations; (3) Itemize all energy efficiency charges; (4) Itemize specific items for specific customer classes; or

(5) Itemize all charges.

Commission staff developed four key criteria to consider during the analysis:

(1) Does the option provide new, useful information that allows the customer to make choices or take actions regarding their energy usage, timing, rate structure or future considerations?;

(2) What are the expected implementation costs of the option to ratepayers?;

(3) Does the option increase administrative costs for utilities and the PSC?; and

(4) What are the potential “regrets” of implementing the option? Will it impede or complicate upcoming legislative activities?

After analyzing the advantages and disadvantages using the above criteria, the Commission recommends a status quo approach in which bills would remain as they currently appear. However, the Commission has asked PSC staff to evaluate options other than bill itemization that may provide similar information to customers.

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It has been more than a decade since Wisconsin took its first stab at deregulating telecommunications services. This docket will look at changes in the industry since then and attempt to answer questions about what, if any, new legislation is needed to address the ever-changing face of telecommuncations services.

Retail issues are the heart of what the Commission will be looking at in the next couple months. It will attempt to answer questions such as: Does competition exist? How do you measure it? If it does exist, what regulations do we need to change? Who do we apply that to? What kind of a time table do we do that under? And do we consider some kind of a mechanism to re-regulate if competition goes away?

Docket 05-TI-1777.

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Docket 6721-TI-211. Today the Wisconsin Commission denied the ATT motion to dismiss and decided to open a docket to determine whether ATT has violated state law for its refusal to port a Kentucky interconnection agreement (ICA) to Wisconsin. The docket will be held in abeyance for 60 days to give the FCC time to act on ATT’s request for a declaratory ruling.

Sprint claims that AT&T’s failure to allow the port and adoption of the ICA is contrary to its obligations under the FCC ATT and Bell South merger order. AT&T claims it’s not denying the port and adoption; only that Sprint has failed to specify which entities will be parties to the ICA.

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The natural gas and oil fired CT and associated gas supply line will cost about $30 million. The CT is designated as a peaking facility and is expected to operate for about 500 hours per year. The plant should be online for the summer of 2009.

Marshfield Utility is owned by the City of Marshfield, Wood County. The utility serves about 13,000 customers, including the well-known Marshfield Clinic.

Docket 3420-CE-111

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The Commission approved WEPCO’s application for authority to construct wet flue gas desulfurization and selective catalytic reduction facilities and associated equipment for control of sulfur dioxide and nitrogen oxide emissions at its Oak creek power plant units 5, 6, 7, and 8 with the instruction that the order include two alternatives, one without conditions and one with conditions concerning the bag house.

WEPCO states in its application that it proposes this project to meet its obligations under the Clean Air Interstate Rule (CAIR) and the federal 8-hour ozone requirements. In addition, the project would allow WEPCO to comply with a Consent Decree entered by the U.S. District Court for Eastern Wisconsin on September 30, 2007. The consent decree requires the company to install updated technology on the units by December 31, 2012. The Consent decree requires the shut-down of Units 5 and 6 by that date if the equipment is not installed.

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Meyer led the discussion*. He stated AT&T and Verizon are essentially asking to argue to the Commission that it made an error of law in its decision to regulate the VoIP services of Time Warner Cable Information Systems. He noted that AT&T and Verizon did not seek to file those arguments in the original case, even though the Wisconsin State Telephone Association, of which Verizon is a member, was an active and aggressive participant in the proceedings. He said he had two primary reasons for his reluctance to permit these briefs: First, he said, this matter is at the rehearing stage and permitting these filings could delay the conclusion of this case. Second, he said, is there’s no new evidence on the issue in question. Meyer said the request appears to be an opportunity to comment on the original case and not on whether the commission erred in making its determination.

Docket 5911-NC-101

*Callisto recused himself from the discussion.

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The Wisconsin PSCW issued a notice that it will open a
proceeding to determine the amount that Verizon North. Inc. (Verizon),
may increase, or must decrease, its price-regulated rates pursuant to
Wis.Stat. § 196. 196(1)(c) and Wis. Admin. Code § PSC 163.04(1).

Price regulation is an optional method of regulation whereby
companies are allowed flexibility to change prices within specified limits,
regardless of profits. Average prices for basic local services are limited by a
formula based on inflation, minus a productivity offset, plus incentives or
penalties based on performance relating to service quality and infrastructure
investment. Verizon services currently subject to this price-regulation
formula are basic local exchange service and standard business access times and
usage by small businesses with no more than three access lines.
Docket 2180-TI-145.

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The roughly 35-mile long line will run from the Rockdale Substation, Dane County,
Wisconsin, to the Paddock Substation, in Rock County, Wisconsin. The Commission
chosen route is estimated to cost about $132,706,200

This is the first transmission line proposed in Wisconsin primarily for economic
reasons. Historically, transmission lines have been proposed and approved based
upon reliability needs to ensure that the transmission grid remains adequately
robust to survive loss of infrastructure that could otherwise cause blackouts. From
its inception, the Paddock-Rockdale proposal was focused on decreasing the congestion
charges associated with bringing power into Wisconsin.

In its approval the PSC required ATC to test for
stray voltage at all dairy operations along the approved route prior to
construction and again after the project is energized. It also
ordered ATC to work with the distribution utility and farm owner to
rectify any stray voltage problems arising from the construction and
operation of the project.

Docket 137-CE-149

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Last week the Commissioners discussed this matter and both Ebert and Meyer
indicated their approval of the order as it was drafted. Azar, however, suggested several modifications to the order, indicating she would author a concurrence. This week, Ebert took his last opportunity to share his thinking about the need to be cautious in making these changes, given
some of the unintended consequences that could result. Ebert wryly
noted his thoughts could be taken with a grain of salt given his short time remaining as Chair.
Ebert did not discuss his opinion at length at the open meeting. For those
interested, you can find his concurring opinion to the order on the Commission
website under Docket 6690-CE-194 .

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