Brief

Electric power line legislation would favor in-state companies as grid expands

By: - October 11, 2023 5:10 am
Utility companies are spending billions building out transmission and distribution lines around the country, leading some to call for an independent monitor to protect customers. Photo by Robert Zullo.

Power transmission lines cross a Midwestern landscape (Robert Zullo | States Newsroom)

Wisconsin lawmakers are considering legislation that would give in-state power transmission companies first dibs on new interstate power lines in Wisconsin — a measure that advocates contend would hold down costs while opponents charge it would drive up the price of electricity.

The bill, AB-470/SB-481, revolves around an arcane question that might be far from the minds of electricity customers: Who should get to build new interstate transmission lines as the need for electricity increases in the state?

The answer to that question, however, could make a difference in how much those customers pay each month on their electricity bills. Supporters and critics of the bill agree as much; they differ on which choice would be more costly.

Currently in Wisconsin, decisions about siting new interstate power line projects and which companies will own and operate them fall to the Midcontinent Independent System Operator (MISO). The operator is a multi-state private company that controls the regional electric grid and is regulated by the Federal Energy Regulatory Commission (FERC). 

Until a 2015 FERC order, power line operators had a “right of first refusal” to take on projects in their state. The new order assigned the task of selecting operators for new interstate lines to regional networks such as MISO, which select operators through competitive bidding. 

The legislation would reinstate the right of first refusal in Wisconsin. In-state transmission companies could accept interstate projects without bidding if the measure is enacted. An attempt to pass a similar bill in the 2021-22 legislative session failed.

Public hearings on the legislation were held in the Senate on Monday and the Assembly on Tuesday. 

The bill is backed by American Transmission Co. (ATC), the principal power line operator in Wisconsin, as well as by the electric utilities with the largest footprint in the state. A handful of power company cooperatives have stated that while they oppose the bill as written, they’d switch their stance to supporting it if it is amended to allow all current power line owners in Wisconsin the same ability to take on new transmission lines without bidding.

A diverse coalition opposes the bill, including the Citizens Utility Board of Wisconsin, a consumer watchdog organization; AARP, the lobbying organization for people 50 and older; the environmental group Clean Wisconsin; and Americans for Prosperity, the libertarian organization associated with the Koch Brothers political and funding network.

The authors of the bill contend that by favoring in-state companies it will ensure greater reliability. 

The FERC order “has the effect of encouraging non-Wisconsin companies to get involved in our state’s power grid, even if those companies have not proven they can be reliable in their construction, operation and maintenance of transmission lines,” wrote Sen. Julian Bradley (R-Franklin) and Rep. Kevin Peterson (R-Waupaca) in their memo seeking cosponsors. “The Order also has the effect of encouraging non-Wisconsin companies to get involved in our state’s power grid, even if those companies have not proven they can be reliable in their construction, operation and maintenance of transmission lines.”

In testimony submitted for a Senate public hearing Monday, ATC Chief Financial Officer Mike Hofbauer asserted that the way regional transmission project costs are allocated makes it cheaper for customers if an in-state utility builds the project rather than an out-of-state contractor.

At the same hearing, CUB Executive Director Tom Content urged lawmakers to reject the legislation. “This  bill undercuts affordability efforts by blocking an opportunity to find cost savings or project improvements when major power lines are built,” Content stated. “Consumer advocates and customer groups across the country have mobilized in the name of cost savings to support competitive bidding for projects as part of an expected multi-billion-dollar expansion of the Midwest and national power grid.”

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Erik Gunn
Erik Gunn

Deputy Editor Erik Gunn reports and writes on work and the economy, health policy and related subjects, for the Wisconsin Examiner. He spent 24 years as a freelance writer for Milwaukee Magazine, Isthmus, The Progressive, BNA Inc., and other publications, winning awards for investigative reporting, feature writing, beat coverage, business writing, and commentary.

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