|
COURT OF
APPEALS DECISION DATED AND
RELEASED May
23, 1996 |
NOTICE |
|
A party may file with the Supreme Court a petition to review an
adverse decision by the Court of Appeals.
See § 808.10 and Rule
809.62, Stats. |
This opinion is subject to further editing. If published, the official version will appear in the bound
volume of the Official Reports. |
No. 95-1249
STATE OF WISCONSIN IN
COURT OF APPEALS
DISTRICT IV
93 CV
4628 (Dane)
POLSKY
ENERGY CORPORATION,
Petitioner,
v.
PUBLIC
SERVICE COMMISSION OF
WISCONSIN,
Respondent.
_________________________________________
94 CV
215 (Dane), 94 CV 783 (Milwaukee),
94 CV
720 (Dane), 94 CV 2173 (Dane),
94 CV
2574 (Milwaukee), 94 CV 2977 (Dane)
ENERTRAN
TECHNOLOGY COMPANY,
Petitioner,
v.
PUBLIC
SERVICE COMMISSION OF
WISCONSIN,
Respondent.
_________________________________________
94 CV
2176 (Dane)
CITIZENS'
UTILITY BOARD, INC.,
Petitioner,
v.
PUBLIC
SERVICE COMMISSION OF
WISCONSIN,
Respondent.
_________________________________________
93 CV
1446 (Outagamie)
REPAP
WISCONSIN, INC.,
Petitioner-Appellant,
v.
PUBLIC
SERVICE COMMISSION OF WISCONSIN
AND LS
POWER CORPORATION,
Respondents-Respondents.
APPEAL
from an order of the circuit court for Dane County: JACK F. AULIK, Judge. Affirmed.
Before
Dykman, Sundby and Vergeront, JJ.
VERGERONT,
J. Repap Wisconsin, Inc., a paper company, appeals from a trial
court order affirming a Public Service Commission (PSC) order which denied the
application of Wisconsin Electric Power Company (WEPCO) to build a new electric
generating facility. There are two
primary issues on appeal:
(1) whether the PSC erred in denying Repap's request for a
contested case hearing under § 227.42, Stats.,
on the PSC's decision to deny WEPCO's application; and (2) whether the PSC
erred in denying WEPCO's application without holding a public hearing under
§ 196.491(3)(b), Stats. We resolve both issues in favor of the PSC
and affirm.
BACKGROUND
WEPCO
is a public utility that provides electricity to the public. On May 22, 1992, WEPCO filed an application
for a Certificate of Public Convenience and Necessity (CPCN) with the PSC to
build a 210 megawatt cogeneration facility at Repap's paper mill in the Village
of Kimberly.[1] The proposed facility, referred to as the
Kimberly Cogeneration Facility, would supply electrical energy to the WEPCO
system and thermal energy in the form of steam for Repap's papermaking
process. WEPCO intended to own the
facility and Repap intended to operate it.
The application stated that the purpose of the proposed project was to
provide additional generating capacity for WEPCO's system and to replace
Repap's aging boiler system.
Under
§ 196.491(3), Stats., the
builder of a large electric generating facility such as the Kimberly Cogeneration
Facility must apply for and receive a CPCN from the PSC prior to
construction. Traditionally, only
electric utilities constructed new electric generating facilities and the CPCN
process involved PSC review of a single proposed project. This involved a consideration of alternate
sources of supply and alternate designs and locations for the proposed
facility. However, the Public Utility
Regulatory Policies Act of 1978 (PURPA), 16 U.S.C. § 824a-3, imposed
restrictions on the ability of utilities to construct their own facilities
without considering cogeneration facilities proposed by independent
(non-utility) power producers (IPPs).
Congress' intent was to encourage energy efficiency and promote
competition in the power generation industry.
FERC v. Mississippi, 456 U.S. 742, 750-51 (1982). PURPA allowed IPPs to break into the
electric generation monopoly by giving a qualifying facility[2]
an enforceable right to sell power to a utility if the qualifying facility can
provide power at or below the sum the electric utility would have to pay if it
produced the power itself or had to purchase the power from another source. 16 U.S.C. § 824a-3.
At
the time WEPCO filed its CPCN application, the PSC was in the process of
examining its responsibilities under PURPA and attempting to devise an
appropriate method for including competing IPP projects in the CPCN process
under § 196.491, Stats. This process was expedited when the PSC
received notice that a number of IPPs were interested in meeting WEPCO's power
needs through the construction of their own cogeneration facilities. As neither § 196.491(3) or PURPA
addressed how to deal with multiple competing projects, each with its own size,
timing, cost, operating characteristics and environmental aspects, the PSC was
forced to modify its traditional CPCN review procedure.
In
a Notice of Opportunity to File Alternative Projects (Bidding Notice), the PSC
proposed a two-stage CPCN review process.
In the first stage, the PSC would use a competitive bidding scheme in
order to identify and evaluate alternative projects to the Kimberly
Cogeneration Facility and to select the best project to supply needed
electrical power to WEPCO's system.
This included the use of a computer model to help determine which of the
competing proposals would be the least-cost supply plan for WEPCO. In the second stage, the PSC would address
the environmental effects of the winning bid and hold a public hearing in the
area affected by the winning bid, as required by § 196.491(3)(b), Stats.[3]
The
PSC received nine letters of intent to submit project bids from other utilities
and IPPs vying to replace the Kimberly Cogeneration Facility as the next
facility in WEPCO's system. Each bidder
was asked to submit information regarding its project costs, schedules,
operating characteristics, contract terms and environmental factors associated with
its proposed facility. Under protective
orders issued by the PSC, all of the filed information was made available to
all of the bidders (with certain exceptions not relevant to this appeal). Confidential materials, including the PSC's
comments on each bid, were not made available to non-bidders.[4] In order to evaluate the bids in stage one,
the PSC's staff used a computer model which allowed a direct comparison of the
long-term costs of supply options which varied as to size, type of capacity,
fuel type, capacity factor, dispatchability and in-service date.
On
August 11, 1993, the PSC circulated its Preliminary Modeling Results. The results provided an initial ranking of
the competing bids in the order of the least system cost. The bidders were asked to comment on the
preliminary results, the modeling process, unmodeled costs and the intangible
factors of the competing bids. On
September 3, 1993, the PSC's staff reviewed these comments and submitted its
final staff report to the PSC with the final modeling results and reviews of
the proposals. On the same date, the
PSC circulated a non-confidential portion of the final staff report to all
parties, with exhibits showing the project rankings based on the final computer
modeling. A confidential portion of the
final staff report was circulated to the bidders which summarized the bidders'
confidential comments and the staff's assessment of the bids and comments. The parties were again asked to make written
comments and given until September 13, 1993, to request a hearing. Only one bidder, Polsky Energy Corporation,
requested a hearing prior to September 13, 1993, and that request was
later withdrawn.
On
September 16, 1993, the PSC denied WEPCO's CPCN application and selected a
project proposed by LS Power Corporation to proceed to stage two. The Kimberly Cogeneration Facility finished
in second place and was permitted to proceed to stage two in the event LS Power
failed to proceed, provided WEPCO make certain modifications to its bid.
On
September 28, 1993, Repap asked the PSC for a contested case hearing under §§
196.491(3)(b) and 227.42, Stats. In an order dated November 4, 1993, the PSC
denied this request as untimely and memorialized its September 16, 1993
rulings.
Following
the selection of LS Power in stage one, the PSC conducted a full environmental
review of LS Power's bid in stage two.
This included a public hearing under § 196.491(3)(b), Stats., held in Whitewater, Wisconsin,
the area affected by LS Power's facility.
The PSC issued a CPCN for the LS Power project on March 6, 1995. The events of stage two are not a subject of
this appeal.
STANDARD OF REVIEW
We review the decision
of the PSC, not the decision of the trial court. See Barakat v. DHSS, 191 Wis.2d 769, 777,
530 N.W.2d 392, 395 (Ct. App. 1995).
Nonetheless, we value the opinion of the trial court, particularly
where, as here, the court has provided a very thorough, lengthy and
well-reasoned decision. See Scheunemann
v. City of West Bend, 179 Wis.2d 469, 475-76, 507 N.W.2d 163, 165 (Ct.
App. 1993).
Whether
the PSC erred in denying Repap's motion for a contested case hearing under
§ 227.42, Stats., involves
the application of the law to an undisputed set of facts. This presents a question of law. We are not bound by an agency's conclusions
of law. See Kelley Co. v.
Marquardt, 172 Wis.2d 234, 244, 493 N.W.2d 68, 73 (1992). However, in some cases, it is appropriate to
give deference to an agency's conclusions.
Local No. 695 v. LIRC, 154 Wis.2d 75, 82, 452 N.W.2d 368,
371 (1990). As the PSC is not charged
with administering ch. 227 and does not claim to have any particular expertise
in applying § 227.42, we review this issue de novo.
Whether
the PSC erred in failing to hold a public hearing under § 196.491(3)(b), Stats., before denying WEPCO's CPCN
application involves the construction of a statute. This also presents a question of law. We recognize that the PSC is charged with administering ch. 196, Stats., and has experience, technical
competence and specialized knowledge in processing applications for CPCNs. Moreover, the PSC has broad discretion to
manage its own docket. See Friends
of the Earth v. PSC, 78 Wis.2d 388, 409, 254 N.W.2d 299, 307 (1977)
("Unquestionably, the PSC possesses broad discretion in managing the
progress of cases on its docket provided it does so in good faith");
§ 196.02(1), Stats. (the PSC
may do "all things necessary and convenient to its
jurisdiction"). However, the
parties agree that this case, including the issue of when to hold the public
hearing under § 196.491(3)(b) was one of first impression for the PSC,
involving the harmonization of § 196.491(3) and its obligations under
PURPA. Also, while the PSC had
promulgated administrative rules to implement § 196.491(3) when a single
utility proposes a facility, it had not promulgated rules regarding the
two-stage CPCN procedure used when there are multiple competitors. See Richland Sch. Dist. v.
DILHR, 174 Wis.2d 878, 894, 498 N.W.2d 826, 832 (1993) (the promulgation
of rules indicates the agency has gained experience and expertise in
interpreting a statutory provision).
Accordingly, we also review the public hearing issue de novo.
HEARING UNDER
§ 227.42, Stats.
Repap
contends that the PSC erred in denying its request for a contested case hearing
under § 227.42, Stats., as
untimely.[5] We disagree and conclude that Repap waived
its right to a hearing under § 227.42 by not requesting one within ten days of
the PSC's September 3, 1993 memo.
The
PSC's memo was circulated to all of the parties on September 3, 1993. Attached to the memo was a portion of the
staff's final report containing the project rankings based on the final
computer modeling. A confidential
portion of the staff's final report, summarizing the competitors' confidential
comments and the staff's assessment of the parties' respective bids and
comments, was also attached to the copies of the PSC memo sent to the bidders,
including WEPCO. The PSC memo asked the
parties to "comment on this staff mailing and if desired, to comment on
the other parties' prior comments by Monday, September 13, 1993." The PSC memo also notified the parties that
its decision on the matter was scheduled for September 16, 1993. The non-confidential portion of the final
staff report stated:
The parties have
also been given an opportunity to respond to the staff report. These supplemental comments will be routed
to you [the PSC] separately. If any
party wishes to ask for hearing on some aspect of this analysis, the request
should be included with these comments.
Any such request should be explicit as to precisely which issues require
hearing in the requester's view.
(Emphasis added.)
Repap
does not dispute that the PSC has the authority to establish a deadline to
request a contested case hearing.
Rather, Repap contends that a deadline was not actually set because the
ten-day deadline to request a hearing was explained in the staff's final
report, not in the PSC memo to which it was attached. We reject this argument.
The PSC memo asked the parties to comment within ten days on the staff
mailing. The staff mailing referred to
was the staff's final report and that report expressly refers to requests for a
hearing. A reasonable person reading
the PSC memo in conjunction with the staff's final report would understand that
all comments and any requests for a hearing must be made within ten days of the
PSC memo.
Repap
next contends that it believed that a contested case hearing would be held
automatically after the PSC selected the winning bid in stage one. This argument is not persuasive. When the two-stage CPCN procedure was
announced in the bidding notice, it did not contain any provision for a
contested case hearing. Repap did not
raise any objections to this proposed procedure. When several of the competing IPPs requested more formal
contested-case hearing procedures than were proposed, Repap objected to these
requests. Repap specifically stated
that it "is most concerned that the proceeding be administered in an
efficient way which does not delay any longer the consideration of, and
decision on, the [Kimberly Cogeneration Facility] CPCN application." In response to the requests for more formal
contested-case hearing procedures by the competing bidders, the PSC informed
the parties by letter dated June 17, 1993, that a hearing in stage one was not
planned. The letter provided:
Although it is possible that hearing may be appropriate
at the "intangibles"[6]
stage of the process, (See Notice of Opportunity to File issued May 19, 1993)
it is not apparent at this point whether hearing will be necessary to resolve
disputes, or whether the matters that may arise are more appropriate for
comment or brief.... Consequently, the Commission will not establish any
hearing schedule or requirement at this time in stage one of this case.
(Emphasis added; footnote added.)
In
light of this record, Repap's assertion that it believed a contested case
hearing would automatically be held after the winning bid was selected in stage
one was unreasonable.
Repap
also takes the position that the staff's final report invited hearing requests
only on the confidential staff analysis, to which it did not have access, and
that regardless of whether it waived its right to a hearing on the confidential
staff analysis, it had a right to a contested case hearing on the PSC's
decision to deny WEPCO's application and to select LS Power's proposed
facility. We disagree. First, Repap misreads the PSC memo. The memo provided the parties with the
opportunity to comment and request hearings on the "staff
mailing." The staff mailing
referred to was the staff's final report.
All parties, including Repap, received the portion of the staff's final
report containing the project rankings based on the final computer
modeling. The invitation for hearing
requests was not directed solely to the confidential portion of the staff's
analysis. Second, as we have already
stated, it was clear from the announcement of the bifurcated CPCN procedure set
out in the bidding notice that if a hearing were held at all in stage one, it
would be at the intangibles stage, not after the winning bid was selected.
PUBLIC
HEARING UNDER § 196.491(3)(b), Stats.
Repap
contends the PSC erred in denying WEPCO's CPCN application without holding a
public hearing under § 196.491(3)(b), Stats. We conclude that the PSC's decision to hold
the public hearing in stage two satisfies the requirement of the statute.[7]
Section
196.491(3)(b), Stats., provides
in relevant part: "The Commission
shall hold a public hearing on the application in the area affected pursuant to
s. 227.44." Neither the statute
itself or any case law describes the purpose of the hearing. However, the fact that the public hearing
must be held "in the area affected" indicates that the legislature
was concerned that local citizens have the opportunity to comment on how the
proposed facility will affect them.
Further, since the CPCN review process consisted of the PSC's evaluation
of a single proposed facility when this statute was enacted, it is reasonable to
construe the purpose of the public hearing as an opportunity for local citizens
to voice their criticisms of, or opposition to, the proposed project.
The
PSC's decision to conduct the public hearing under § 196.491(3)(b), Stats., in stage two is in keeping with
the statute's purpose. With multiple
competing projects, the PSC could not know what the "area affected"
would be until it selected the winning bid in stage one. Moreover, holding a public hearing in the
area affected by each competing project would be burdensome and confusing to
the public since only one of the bids was likely to succeed. As the PSC stated in its November 4, 1993
order:
The existing CPCN review process is not designed to
handle multiple competing projects, each with possible alternate sites and each
with its own size, timing, cost, operating characteristics, environmental
aspects and other elements. The
necessary full environmental review of all the possible projects would expend
considerable amounts of valuable time and resources, and would create delays
that could jeopardize reliable electric service.
Repap
contends that the PSC must hold a public hearing under § 196.491(3)(b), Stats., in stage one to address
"alternative sources of supply."
We are not persuaded. It is true
that part of the PSC's review of a CPCN application must involve the
consideration of alternative sources of supply. Section 196.491(3)(d)3 provides that a CPCN application
shall be approved if, among other factors, "[t]he design and location or
route is in the public interest considering alternative sources of supply,
alternative locations or routes, individual hardships, engineering, economic,
safety, reliability and environmental factors." (Emphasis added.) The
parties agree that, in this case, the alternative sources of supply were the
proposals submitted by competitors of the Kimberly Cogeneration Facility. However, there is no indication in
§ 196.491(3) that the PSC's consideration of alternative sources of supply
must be a subject of the public hearing under § 196.491(3)(b). Rather, as stated above, the purpose of
§ 196.491(3)(b) is to provide an opportunity for local citizens to voice
their criticisms of, or opposition to, the proposed facility. Repap provides no support for its assertion
that the public hearing was intended to give the public an opportunity to
participate in evaluating competing alternative projects throughout the state,
particularly in light of the fact that when the statute was created, there was
no competition between alternative projects.
MODIFICATIONS OF
WEPCO'S SECOND-PLACE BID
In
its November 4, 1993 order denying WEPCO's CPCN application and selecting LS
Power as the project to proceed to stage two, the PSC also determined that
WEPCO's bid was the second-place bid, subject to conditions. The PSC stated that WEPCO's bid could
proceed if the LS Power project failed to proceed, as long as WEPCO corrected
some "weaknesses" in its bid concerning the proposed site of the
facility and certain accounting practices.
In an order dated February 4, 1994, the PSC approved WEPCO's proposal to
change the Kimberly Cogeneration Facility site and WEPCO's modification of its
accounting practices.
The
trial court determined that the PSC improperly allowed WEPCO to make a material
change to its bid. The court stated
that, "The PSC clearly implied [in its November 4, 1993 order] that the
failure to cure would result either in the disqualification of the proposal or
in a lower ranking," and that "[n]othing in the PSC's order explains
why such a right to cure was permitted and the principle of `a bid is a bid'
overlooked." The court vacated
that part of the PSC's order which placed WEPCO's bid in second place and
remanded with directions to the PSC to provide an adequate explanation as to
why WEPCO was allowed to make the modifications to its bid.
Repap
asks us to reverse the trial court's February 4, 1994 order and affirm the
PSC's determination that WEPCO's modifications did not constitute a material
change to its bid. We decline to do so
because we conclude the issue is moot.
The PSC's November 4, 1993 order provided that WEPCO's second-place bid
could proceed only if LS Power failed to proceed. On March 6, 1995, the PSC approved LS Power's CPCN
application. Since LS Power has
completed the CPCN process, the issue of which bidder was properly in second
place is no longer an issue.
By
the Court.—Order affirmed.
Not recommended for
publication in the official reports.
No. 95-1249(D)
SUNDBY,
J. (dissenting). In this appeal, we construe
§ 196.491(3), Stats.,
requiring a person wishing to construct and operate an electric generating
facility to obtain a certificate of public convenience and necessity from the
public service commission. The parties
agree that this presents a question of law which we review de novo. See City of Brookfield v.
Public Service Comm'n, 186 Wis.2d 129, 134, 519 N.W.2d 718, 721 (Ct.
App. 1994).
Section
196.491(3), Stats., provides in
part:
(a) No
person may commence the construction of a facility unless such person has
applied for and received a certificate of public convenience and necessity from
the commission as provided in this section.... Within 10 days after filing the application, the commission shall
send a copy of the application to the clerk of each municipality and town in
which the proposed facility is to be located and to the main public
library in each such county....
(b) The
commission shall hold a public hearing on the application in the area
affected pursuant to s. 227.44. A
class 1 notice, under ch. 985, shall be given at least 30 days prior to the
hearing.
(d) ...
[T]he application for a certificate of public convenience and necessity
shall be approved if the commission determines that:
....
6. The
proposed facility will not unreasonably interfere with the orderly land use and
development plans for the area involved.
....
(hm)
The commission and the department shall schedule as many hearings under
this subsection as practicable at a time and place reasonably convenient to
the majority of persons in the area of the facility.
....
(j) Any person whose substantial rights may be
adversely affected or any county, municipality or town having jurisdiction over
land affected by an advance plan or certificate of public convenience and
necessity may petition for judicial review, under ch. 227, of any decision of
the commission regarding the advance plan or the certificate.
(Emphasis added.)
"Facility"
includes the cogeneration plant which was the subject of WEPCO's application to
the commission. In an early order, the
commission stated: "The existing
[public convenience and necessity] review process was not designed to handle
multiple competing projects...."
The commission designed a review process to handle multiple competing
projects, without seeking statutory authorization for such process. An administrative agency has only such
powers as are expressly delegated to it by the legislature or are necessarily
implied from such delegation. Wisconsin
Patients Compensation Fund v. Wisconsin Health Care Liability Ins. Plan,
No. 95-0865, slip op. at 10 (Wis. May 8, 1996). Because the review process fashioned by the commission failed to
follow important provisions of the existing public convenience and necessity
review process, the commission cannot claim that § 196.491(3), Stats., gave implicit authority to
fashion the procedure followed in this case.
"Any reasonable doubt as to the existence of an implied power in an
agency should be resolved against the exercise of such authority." Wisconsin Patients at 11 (quoting Kimberly-Clark
Corp. v. Public Service Commission, 110 Wis.2d 455, 462, 329 N.W.2d
143, 146 (1983)). While the commission
undoubtedly acted in good faith, the effect of its new process was to deny the
right to be heard in the selection process to local communities and
local residents in the area affected.
One need only recall the furor over construction of the Lake Koshkonong
nuclear plant to realize how important the legislature regards input of local
communities and local citizens into the public convenience and necessity review
process.[8]
The
majority concludes that the public hearing which the commission held after
the facility had already been selected satisfied § 196.491(3)(b), Stats.
It is undisputed that the commission did not hold a public hearing in the
first stage of the bidding and selection process. The commission concedes, and the majority finds, that the
commission used the first stage to "identify and evaluate alternative
projects to the Kimberly Cogeneration Facility and to select the best project
to supply needed electrical power to WEPCO's system." Maj. op. at 5 (emphasis added). The commission had no power to select
"the best project" without following the existing certificate of
public convenience and necessity procedure.
The alternative process adopted by the commission may have been
practical, may have been efficient, may have been fair to the competing
facilities, but it suffers from an irredeemable fault: It is not authorized by law.
It
is undisputed that only WEPCO applied to the commission under
§ 196.491(1), Stats., for a
certificate of public convenience and necessity. The certificate of public convenience and necessity process is
triggered only by the filing of an application for a certificate from
the commission. The entire procedure
follows from the application. It is
that application which the commission must process, and it must do so by
following the requirements of sub. (3), particularly the public hearing
requirements. It is also undisputed
that no hearing was ever held on WEPCO's application. WEPCO's application was summarily dismissed after the
commission selected the project proposed by LS Power Corporation in lieu of the
Kimberly Cogeneration Facility.
The
importance of public input in the public convenience and necessity process is
demonstrated by the outpouring of support for the requests of Repap and
EnerTran for a hearing under § 227.42(1), Stats. These requests
were supported by the Department of Natural Resources, the Citizens' Utility
Board, numerous federal and state elected officials, the Village of Kimberly
and other local governments and economic development organizations, the
Wisconsin Paper Council, the Wisconsin Manufacturers and Commerce Association,
several unions, and petitions signed by almost 6,000 residents of the Fox River
Valley.
Plainly,
the local communities, businesses and residents in an area to be affected by an
electrical generating facility cannot be expected to understand the intricacies
of operation of such facilities. But
they do understand and have an intense interest in the creation of jobs and the
economic and environmental impact of a proposed facility upon the area in which
the facility is proposed to be located.
The legislature has responded to these interests by providing for local
input on an application for a certificate of public convenience and
necessity. When the legislature has
provided for the input of local communities, businesses and other persons, it
is not our function to rewrite the statutes to preclude a fair hearing for the
public in deciding whether a particular facility serves the public convenience
and necessity. The majority suggests
that the public hearing requirement of § 196.491(3)(b), Stats., was satisfied by the hearing
the commission held in stage 2 in Whitewater, Wisconsin, where LS Power
Company's facility is located. Thus, a
public hearing was never held in the area affected by WEPCO's application.
The
commission does not claim that § 196.491(3), Stats., is ambiguous.
The majority does not hold that the statute is ambiguous. However, such a finding is necessary before
a court may decline to apply the plain and unambiguous language of a
statute. See State ex rel.
Girouard v. Jackson Circuit Court, 155 Wis.2d 148, 155-56, 454 N.W.2d
792, 795 (1990). If we confine
ourselves to the language of the statute, as I believe we must, we would
construe the statute as follows. First,
no person may begin construction of a large electric generating facility unless
such person has applied for and received a certificate of public convenience
and necessity from the commission "as provided in this section [sub. 3]." Section 196.491(3)(a) (emphasis added). The commission "shall hold a public
hearing on the application in the area affected ...." Section 196.491(3)(b) (emphasis added). The "application" can only refer
back to the application filed under para. (a).
The only applicant in this case is WEPCO. "[T]he area affected" must refer to the area which is
the subject of the application. Any
other construction is unreasonable. To
find "the area affected" we refer back to the application under para.
(a). That area is the area in which
WEPCO proposed to construct the Kimberly Cogeneration Facility at Repap's
papermill in Kimberly, Wisconsin. Under
sub. (3)(d), "the application" shall be approved if the commission
makes the determinations required thereunder.
A denial of an application is subject to judicial review under ch. 227, Stats.
Further, any person whose substantial rights are adversely affected by
the commission's decision or any county, municipality or town having
jurisdiction over land affected by a certificate of public convenience and
necessity may petition for judicial review of the commission's decision under
ch. 227.
That
is how the statute reads, and if we apply its plain language, the only
permissible conclusion is that the commission has arrogated to itself the
powers of the state legislature. The
commission decided questions of policy which are best left to the
legislature.
The
majority concludes that we should not give a literal interpretation to
§ 196.491(3)(b), Stats.,
because "when the statute was created, there was no competition between
alternative projects." Maj. op. at
16. However, the history of public
utility law has been to allow but regulate competition. The Public Utilities Law was created by ch.
499, Laws of 1907. At that time, the
legislature was concerned with resolving conflicts between existing utilities
and other utilities seeking to compete in the same area. See § 1797m-74, Stats., 1911. The utility seeking to compete had to obtain from the railroad
commission a declaration "after a public hearing of all parties
interested, that public convenience and necessity require such second public
utility." Id.
A
certificate of public convenience and necessity will not be granted if the
proposed facility duplicates existing electric facilities, § 196.495, Stats., and an applicant must show that
a second public utility providing the same service is necessary, § 196.50,
Stats. See Adams-Marquette E. Coop. v. Public Service
Comm'n, 51 Wis.2d 718, 188 N.W.2d 515 (1971) (dispute between a utility
and a cooperative concerning rights to provide electric service to be resolved
under § 196.495(1), Stats.).
Section
196.491, Stats., was created specifically
to require long-range planning for electric generating facilities, including
greater public participation in the planning and siting process. Subsection (2) requires each electric
utility to file an advance plan with the commission every two years to describe
its needs and identify and describe existing and planned programs and
policies. These advance plans are to be
given wide dissemination and are subject to written comments by any county,
municipality, town or person affected thereby.
The commission must also hold a hearing on these advance plans. At least 120 days prior to the filing of an
application for a certificate of public convenience and necessity, the
applicant shall notify the department of natural resources and the commission of
its intention to apply, showing the location and describing the facility,
including the major components thereof having significant air, water and solid
waste pollution potential, and the description of the anticipated effects of
such facility on air and water quality.
Section 196.491(2m). These
statutes are in pari materia with sub. (3). Subsection (3) is to be construed to effect
the intention of the legislature. It
would be unreasonable to construe the application and permitting procedure as
optional with the commission depending on its own assessment of the exigencies.
I
conclude that when § 196.491(3), Stats.,
is construed with those statutes which are in pari materia, the
conclusion is inescapable that the procedure adopted by the commission is not
consistent with the procedure clearly prescribed by the statute. Therefore, the decision of the circuit court
should be reversed and the cause remanded to the commission with directions
that it complete the certificate of public convenience and necessity review
process on WEPCO's application. I
dissent.
[1] A cogeneration facility is one that produces
both electric energy and steam or some other form of useful energy, such as
heat. FERC v. Mississippi,
456 U.S. 742, 750 n.11 (1982).
[2] A qualifying facility is defined by PURPA
regulations as either an independently-owned cogeneration facility that
produces electricity and sells its waste heat for some other useful purpose,
such as paper production, or an independently-owned small power plant that uses
renewable resources. See 18 CFR
292.101(b)(1), 18 CFR 292.202(c), 18 CFR 292.203(a) and 18 CFR 292.206.
[3] Section 196.491(3)(b), Stats., provides:
The commission
shall hold a public hearing on the application in the area affected pursuant to
s. 227.44. A class 1 notice, under ch.
985, shall be given at least 30 days prior to the hearing.
[4] Repap was not a bidder, but rather the
operator of WEPCO's proposed facility.
Consequently, although Repap had access to the non-confidential portions
of all materials, it did not have access to the confidential submissions until
the trial court granted it access on December 16, 1994. Repap made no objection to WEPCO's
representation of the Kimberly Cogeneration Facility in the confidential
portion of the case at the time the bidding notice was circulated, or at any
time until after the PSC denied WEPCO's CPCN application.
[5] Section 227.42(1), Stats., provides:
In addition to any
other right provided by law, any person filing a written request with an agency
for hearing shall have the right to a hearing which shall be treated as a
contested case if:
(a) A substantial interest of the person is injured
in fact or threatened with injury by agency action or inaction;
(b) There is no evidence of legislative intent that
the interest is not to be protected;
(c) The injury to the person requesting a hearing is
different in kind or degree from injury to the general public caused by the
agency action or inaction; and
(d) There is a dispute of material fact.
In
denying Repap's request for a contested case hearing under § 227.42, Stats., the PSC did not question
Repap's entitlement to such a hearing if one had been timely requested.
[6] The PSC's November 4, 1993 order described
the intangible factors as follows: site
control, environmental concerns, financial security performance and
construction guarantees, and fuel supply.
The intangible factors were considered by the staff prior to issuing its
final report.