Legislation aims to keep local control over new power line projects. Opponents fear higher prices.
MADISON — Wisconsin lawmakers are considering a bill that would limit competition among companies building new power lines — a change opponents fear could lead to rate hikes but backers say would do the opposite while bolstering the state's electric grid.
The legislation would establish a right of first refusal for utilities already doing business in Wisconsin, allowing the owners of transmission lines to build lines that connect to their existing ones without having to compete with out-of-state companies for the projects.
Wisconsin is currently served by three transmission utilities: American Transmission Company (ATC), Xcel Energy and Dairyland Power Cooperative.
Backers of the proposal say it is needed in order to keep decisions on transmission lines under the oversight of the state's Public Service Commission, rather than sending them through a cumbersome bureaucratic bidding process executed by Midcontinent Independent System Operator Inc., the regional grid operator overseen by the Federal Energy Regulatory Commission.
"Without this legislation, Wisconsin will have no say over who gets to build out major projects on the grid, and the current outstanding safety and reliability performance of the system will be at risk," said ATC executive vice president and general counsel Bill Marsan.
If the measure is enacted, Wisconsin would join eight other states on the MISO grid that have passed right-of-first-refusal laws since the FERC implemented a rule known as Order 1000, which eliminated the right in an effort to spur competition and lower the costs of transmission projects.
Two former FERC commissioners testified in favor of the proposal during a state Senate committee hearing Monday.
"Competitive procurement for transmission has not been the magic bullet," said former FERC commissioner Marc Spitzer. "Elimination of the (federal right of first refusal) has led not to more wires but instead bureaucratic morass. In that respect I was mistaken when I supported it."
The proposal is opposed by an unusual collection of groups across the ideological spectrum including Americans for Prosperity, Associated Builders and Contractors of Wisconsin, Clean Wisconsin and the Citizens Utility Board of Wisconsin.
CUB executive director Tom Content referred to the bill as "incumbent monopoly utility protection" legislation, arguing it "undercuts affordability efforts by blocking an opportunity to find cost savings or project improvements when major power lines are built."
"Competition is critical in all sectors of our economy, regardless of how regulated that sector is," said AFP state director Megan Novak. "Eliminating competition in these massive projects … eliminates any incentive to keep project costs down or for the company to even consider lowering this return on equity."
The bill was introduced by Sen. Julian Bradley, R-Franklin, and Rep. Kevin Petersen, R-Waupaca. A previous version had bipartisan support from lawmakers on the legislative committees that oversee utilities. Spokespeople for Democratic Sens. Jeff Smith and Brad Pfaff, who sit on the Senate committee, did not respond to messages seeking their position on the current proposal.
The legislative debate comes a little more than a year after MISO approved a $10.3 billion plan for 18 transmission projects in the Midwest to facilitate shifts toward clean energy generation and strengthen the grid against severe weather disruptions.
This article originally appeared on Milwaukee Journal Sentinel: Legislation would keep local control over power line expansion
