No Senate vote, ending fight over electrical projects
New transmission line work to be bid on, rather than being promised to state utilities
Billions of dollars of future electric transmission projects in Wisconsin will be subject to competitive bidding after the state Senate failed to advance a bill that would have given the state’s utilities a virtual monopoly on building and operating such projects.
The Republican-sponsored right of first refusal, or ROFR, bill was among the most heavily lobbied in the Legislative session that ended Tuesday. The bill was passed on a voice vote by the Assembly in February, but failed to come to a vote in the Senate.
The debate heated up in the final days of the session after the Midcontinent Independent System Operator, which oversees transmission in 15 states, released its plan for second of four phases of regional transmission system improvements. Its plan for Wisconsin includes billions of dollars in spending on a massive cross-state transmission line with three times the capacity of existing power lines, and numerous new and upgraded substations. The work aims to improve capacity to better connect new sources of power and increase the system’s reliability.
The state’s three main transmission companies, American Transmission Company, Xcel Energy and Dairyland Power Cooperative, were joined by Wisconsin’s investorowned, municipal and utilities in arguing that the incumbent utilities are best suited to do the work and would be able to do it at a lower long-term cost.
Ellen Nowak, ATC’s vice president for regulatory and government affairs, said opening the door to out-of-state transmission companies raises the specter of a return to the fractured, multi-provider transmission network that plagued the state in the 1990s. ATC was created by the legislature in 2011 to take ownership of electric transmission networks and increase their reliability in eastern and southern Wisconsin.
“Now we are opening up to risk and going back to that fragmented type of grid that we had in the 90s that caused so many problems,” she said. “And, from an economic development perspective, from just a life perspective, we’re a provider of critical services in the state and we don’t want to do things that jeopardize our ability to deliver.”
Megan Novak, state director of Americans For Prosperity-Wisconsin, called the bill a victory for Wisconsin’s electric customers.
“At the end of the day, the state Senate stood strong for ratepayers, especially after $1.5 billion in rate hikes over the last four years that ratepayers had to pay,” she said. “In this case, ratepayers got a win, to include competition to hopefully keep costs down as much as possible going forward.
AFP-Wisconsin was a lead lobbying organization among an unusual coalition of interest groups including consumer advocates, Associated Builders and Contractors of Wisconsin and AARP that lined up in opposition to the bill, arguing that competition would lower construction costs.
Novak said AFP had identified 11 Republican senators who opposed the bill. A handful of Democrats were also opposed she said, making it impossible for supporters to muster the two-thirds vote needed to pull the bill out of committee.
Senate Minority Leader Dianne Hesselbein, D-Middleton, told WisPolitics Tuesday that Republican leaders didn’t ask her whether she had members willing to support a motion to pull the bill out of the Senate’s Natural Resources and Energy Committee, where it had languished since midFebruary.
Eight of 14 MISO states have adopted ROFR laws since the Federal Energy Regulatory Commission opened transmission projects to competition in 2011. However, that rule is under review, and attention in Wisconsin will now turn, at least in part, to Washington.
Nowak said she believes the issue will be revisited by the legislature, especially give the bill’s bipartisan support. ATC prefers a state-level solution, she said.
“We’re committed to this,” Nowak said. “We believe it’s a good policy for electric customers in the entire state, so we’re not stopping.”