August 28, 2009

MADISON - The Wisconsin Industrial Energy Group and the Citizens Utility Board today filed a lawsuit against the Public Service Commission of Wisconsin (PSC) for ignoring state law in approving a wind power project to be built in Minnesota, owned by Madison-based Wisconsin Power & Light Co. (WPL), and paid for by WPL's Wisconsin customers.

"Electric rates have been rapidly rising so we simply can't afford less stringent regulatory review of new energy projects," said WIEG executive director Todd Stuart. "The cost and need of energy infrastructure can't be ignored, especially right now with the massive job losses in Wisconsin."

On June 6, 2008, WPL submitted an application to the PSC for approval to build and own a 200-megawatt wind farm called Bent Tree, to be located in South Central Minnesota, at an estimated cost of $497 million. WPL's application requested a "certificate of convenience and necessity" or CPCN, which a utility must obtain from the PSC before the utility can build a new power plant of 100 megawatts or more.

Because the project would be built in another state, on November 6, 2008, the PSC issued an order following a 2-1 vote saying that it would review WPL's application as one seeking a "certificate of authority" or CA, rather than under the more stringent requirements for obtaining a CPCN. Commissioner Lauren Azar disagreed and voted against reviewing the project under the CA process; she issued a dissenting opinion in which she asserted that Wisconsin law requires utilities to receive a CPCN, regardless of where the project is located. Earlier, in comments filed in July 2008, both WIEG and CUB urged the PSC to use the CPCN process as required by state law.

On July 31, 2009, the PSC issued an order granting WPL a CA for its Bent Tree Wind Farm, even though both WIEG and CUB had submitted legal briefs in May 2009, again pointing out that state law requires utilities to receive a CPCN before constructing a project like Bent Tree.

In general, a certificate granted under the CPCN process means that the PSC has determined that the project is needed to provide Wisconsin customers with electricity, and that the cost and environmental impacts of the project are reasonable when compared to alternatives.

In filing the lawsuit, WIEG and CUB contend that the PSC ignored Wisconsin law, which states that a utility cannot build a power plant of 100 megawatts or more unless the utility has received a CPCN.

This case is of statewide importance because significantly less review by the PSC is required in granting a CA, and customer groups like CUB and WIEG may have no opportunity to provide testimony and legal opinions regarding a proposed project's appropriateness for providing Wisconsin consumers with electricity at reasonable prices.

"CUB and WIEG are suing the PSC because the agency side-stepped the more thorough CPCN process, which is designed to protect consumers from paying for poorly designed or expensive power plants that can cost hundreds of millions of dollars or more," said Charlie Higley, CUB executive director. "Though CUB believes wind power projects like Bent Tree can play an important role in meeting Wisconsin's electricity needs, the PSC must use the CPCN process to make sure consumer interests are protected."

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The Wisconsin Industrial Energy Group is a nonprofit consumer advocacy trade association that represents most major Wisconsin manufacturing industries including paper, malting, automobile, food processing, chemical, metal casting, and fabricating. WIEG's primary focus is to advocate for reliable and cost effective gas and electric service for Wisconsin energy consumers.

The Citizens Utility Board of Wisconsin is a member-supported nonprofit organization that advocates for reliable and affordable utility service. CUB represents the interests of residential, farm, and small business customers of electric, natural gas, and telecommunication utilities before the Legislature, regulatory agencies, and the courts.