Clean Wisconsin v. PUBLIC SERVICE COMM'N

• Decision Date: 28 June 2005
• Docket Number: No. 2004AP3179.,2004AP3179.
• Citation: 700 N.W.2d 768,282 Wis.2d 250,2005 WI 93
• Court: Wisconsin Supreme Court
• Parties: CLEAN WISCONSIN, INC. p/k/a Wisconsin's Environmental Decade Institute, Inc., SC Johnson & Son, Inc. and Calpine Corporation, Petitioners-Respondents-Cross-Appellants-Cross-Respondents, TOWN OF CALEDONIA, Petitioner-Cross-Respondent, v. PUBLIC SERVICE COMMISSION OF WISCONSIN and Wisconsin Department of Natural Resources, Respondents-Co-Appellants-Cross-Respondents, WISCONSIN ELECTRIC POWER COMPANY, W.E. Power, LLC and Wisconsin Energy Corporation, Interested Parties-Appellants-Cross-Respondents, DAIRYLAND POWER COOPERATIVE, Interested Party-Cross-Respondent, MADISON GAS & ELECTRIC COMPANY and Wisconsin Public Power, Inc., Interested Parties-Co-Appellants-Cross-Respondents, CITY OF OAK CREEK, Interested Party-Respondent-Cross-Appellant, Robert H. OWEN, Interested Party-Respondent-Cross-Respondent. CALPINE CORPORATION, Petitioner, PUBLIC SERVICE COMMISSION OF WISCONSIN and Wisconsin Department of Natural Resources, Respondents, WISCONSIN ELECTRIC POWER COMPANY, Wisconsin Energy Corporation, W.E. Power, LLC, Dairyland Power Cooperative, Madison Gas & Electric Company, Robert H. Owen, Jr. and City of Oak Creek, Interested Parties. CLEAN WISCONSIN, INC. p/k/a Wisconsin's Environmental Decade Institute, Inc. and SC Johnson & Son, Inc., Petitioners, v. WISCONSIN DEPARTMENT OF NATURAL RESOURCES, Respondent, WISCONSIN PUBLIC POWER, INC., City of Oak Creek, Dairyland Power Cooperative, Madison Gas & Electric Company, Wisconsin Electric Power Company, Wisconsin Energy Corporation and W.E. Power, LLC, Interested Parties. CALPINE CORPORATION, Petitioner, v. WISCONSIN DEPARTMENT OF NATURAL RESOURCES, Respondent, CITY OF OAK CREEK, Dairyland Power Cooperative, Madison Gas & Electric Company, Wisconsin Public Power, Wisconsin Electric Power Company, Wisconsin Energy Corporation and W.E. Power, LLC, Interested Parties. CITY OF OAK CREEK, Petitioner, v. PUBLIC SERVICE COMMISSION OF WISCONSIN, Respondent. TOWN OF CALEDONIA, Petitioner, v. PUBLIC SERVICE COMMISSION OF WISCONSIN, Respondent, WISCONSIN ELECTRIC POWER COMPANY, Wisconsin Energy Corporation, W.E. Power, LLC, Dairyland Power Cooperative, Madison Gas & Electric Company, Robert H. Owen, Jr. and Wisconsin Public Power, Inc., Interested Parties.

282 Wis.2d 250

2005 WI 93

700 N.W.2d 768

CLEAN WISCONSIN, INC. p/k/a Wisconsin's Environmental Decade Institute, Inc., SC Johnson & Son, Inc. and Calpine Corporation, Petitioners-Respondents-Cross-Appellants-Cross-Respondents, TOWN OF CALEDONIA, Petitioner-Cross-Respondent, v. PUBLIC SERVICE COMMISSION OF WISCONSIN and Wisconsin Department of Natural Resources, Respondents-Co-Appellants-Cross-Respondents, WISCONSIN ELECTRIC POWER COMPANY, W.E. Power, LLC and Wisconsin Energy Corporation, Interested Parties-Appellants-Cross-Respondents, DAIRYLAND POWER COOPERATIVE, Interested Party-Cross-Respondent, MADISON GAS & ELECTRIC COMPANY and Wisconsin Public Power, Inc., Interested Parties-Co-Appellants-Cross-Respondents,

CITY OF OAK CREEK, Interested Party-Respondent-Cross-Appellant,

Robert H. OWEN, Interested Party-Respondent-Cross-Respondent.

CALPINE CORPORATION, Petitioner,

PUBLIC SERVICE COMMISSION OF WISCONSIN and Wisconsin Department of Natural Resources, Respondents,

WISCONSIN ELECTRIC POWER COMPANY, Wisconsin Energy Corporation, W.E. Power, LLC, Dairyland Power Cooperative, Madison Gas & Electric Company, Robert H. Owen, Jr. and City of Oak Creek, Interested Parties.

CLEAN WISCONSIN, INC. p/k/a Wisconsin's Environmental Decade Institute, Inc. and SC Johnson & Son, Inc., Petitioners, v. WISCONSIN DEPARTMENT OF NATURAL RESOURCES, Respondent,

WISCONSIN PUBLIC POWER, INC., City of Oak Creek, Dairyland Power Cooperative, Madison Gas & Electric Company, Wisconsin Electric Power Company, Wisconsin Energy Corporation and W.E. Power, LLC, Interested Parties.

CALPINE CORPORATION, Petitioner, v. WISCONSIN DEPARTMENT OF NATURAL RESOURCES, Respondent,

CITY OF OAK CREEK, Dairyland Power Cooperative, Madison Gas & Electric Company, Wisconsin Public Power, Wisconsin Electric Power Company, Wisconsin Energy Corporation and W.E. Power, LLC, Interested Parties.

CITY OF OAK CREEK, Petitioner, v. PUBLIC SERVICE COMMISSION OF WISCONSIN, Respondent.

TOWN OF CALEDONIA, Petitioner, v. PUBLIC SERVICE COMMISSION OF WISCONSIN, Respondent,

WISCONSIN ELECTRIC POWER COMPANY, Wisconsin Energy Corporation, W.E. Power, LLC, Dairyland Power Cooperative, Madison Gas & Electric Company, Robert H. Owen, Jr. and Wisconsin Public Power, Inc., Interested Parties.

No. 2004AP3179.

Supreme Court of Wisconsin.

Oral argument March 30, 2005.

Decided June 28, 2005.

For the respondents-co-appellants-cross-respondents, Public Service Commission of Wisconsin and Wisconsin Department of Natural Resources, there were briefs by David J. Gilles and Edward S. Marion, Madison, and oral argument by Edward S. Marion.

For petitioner-respondent-cross-appellant-cross-respondent, Calpine Corporation, there were briefs by Peter L. Gardon, Bryan K. Nowicki and Reinhart Boerner VanDeuren, S.C., Madison, and oral argument by Peter L. Gardon.

For the petitioners-respondents-cross-appellants-cross-respondents, Clean Wisconsin, Inc. and S.C. Johnson & Son, Inc., there were briefs by Carl A. Sinderbrand and Wickwire Gavin, P.C., Madison (on behalf of S.C. Johnson & Son, Inc.); and Pamela R. McGillivray and Garvey & Stoddard, S.C., Madison (on behalf of Clean Wisconsin, Inc.), and oral argument by Carl A. Sinderbrand.

[282 Wis.2d 290]

For the interested parties-co-appellants-cross-respondents, Wisconsin Public Power, Inc. and Madison Gas & Electric Company, there were briefs by Richard K. Nordeng, Barbara A. Neider and Stafford Rosenbaum LLP, Madison, and oral argument by Richard K. Nordeng.

For the interested parties-appellants-cross-respondents, Wisconsin Electric Power Company, W.E. Power, LLC and Wisconsin Energy Corporation, there were briefs by Larry J. Martin, John A. Casey, Brian D. Winters and Quarles & Brady LLP, Milwaukee; Matthew W. O'Neill and Friebert, Finerty & St. John, SC, Milwaukee; Linda H. Bochert and Michael Best & Friedrich LLP, Madison; R. Ryan Stoll and Skadden, Arps, Slate, Meagher & Flom, LLP, Chicago, IL, and oral argument by R. Ryan Stoll.

For the interested party-respondent-cross-appellant, City of Oak Creek, there were briefs by William J. Mulligan, Tyson A. Ciepluch and Davis & Kuelthau, S.C., Milwaukee; and Lawrence J. Haskin, Oak Creek, and oral argument by William J. Mulligan.

For the interested party-cross-respondent, Dairyland Power Cooperative, there were briefs by Jeffrey L. Landsman, Janet L. Kelly and Wheeler, Van Sickle & Anderson, S.C., Madison.

An amicus curiae brief was filed by Lee Cullen, Kira E. Loehr and Cullen Weston Pines & Bach LLP, Madison, on behalf of the Wisconsin Energy Customers.

An amicus curiae brief was filed by Gerardo H. Gonzalez, J. Manuel Raneda and Gonzalez, Saggio & Harlan, L.L.P., Milwaukee, on behalf of The Hispanic Chamber of Commerce of Wisconsin, The African American Chamber of Commerce, Inc., and The Metropolitan Milwaukee Association of Commerce, Inc.

[282 Wis.2d 291]

An amicus curiae brief was filed by Brady C. Williamson, Jennifer Cotner, and LaFollette Godfrey & Kahn, Madison, on behalf of American Transmission Company, LLC, Wisconsin Manufacturers and Commerce, and Wisconsin Merchants Federation.

An amicus curiae brief was filed by Lisa Madigan, Attorney General, Matthew Dunn, Chief, Environmental Enforcement/Asbestos Litigation Division, Ann Alexander, Assistant Attorney General, Chicago, IL and David C. Bender and Bender Law Offices, Madison, on behalf of the State of Illinois.

An amicus curiae brief was filed by Howard A. Learner, Shannon Fisk, Meleah Geertsma, and Environmental Law & Policy Center, Chicago, IL; and Bruce Nilles and Sierra Club, Madison, on behalf of Clean Air Task Force, Citizens for Responsible Power, Environmental Law and Policy Center, Lake Michigan Federation, Physicians for Social Responsibility of Madison, River Alliance of Wisconsin, Sierra Club, Union of Concerned Scientists, Wisconsin Interfaith Climate and Energy Campaign, and Wisconsin Public Interest Research Group.

An amicus curiae brief was filed by Dennis P. Birke and DeWitt Ross & Stevens S.C., Madison, on behalf of the Wisconsin Utilities Association.

[282 Wis.2d 289]

s 1. JON P. WILCOX, J., DAVID T. PROSSER, J., PATIENCE DRAKE ROGGENSACK, J., and LOUIS B. BUTLER JR., J.

This case is before the court on a motion to bypass, pursuant to Wis. Stat. § (Rule) 809.60 (2001-02).¹ It represents a consolidation of five separate actions seeking judicial review of a final decision and order of the Public Service Commission (PSC) that

[282 Wis.2d 292]

issued a Certificate of Public Convenience and Necessity (CPCN) to Wisconsin Electric Corporation (WEC)² for the construction of two large super-critical, coal-fired electric power plants on the shore of Lake Michigan in the City of Oak Creek. The Dane County Circuit Court, David T. Flanagan, III, Judge, vacated the PSC's order and remanded for further proceedings. Specifically, the circuit court concluded that the PSC erred in determining that WEC's application was complete and that the PSC erred in commencing the CPCN approval process based on that application. Additionally, the circuit court concluded that the PSC erroneously issued its order because the PSC did not comply with an assortment of statutes governing the granting of CPCNs. Finally, the court vacated the PSC's modification of a mitigation payment agreement between the City of Oak Creek and WEC.

s 2. Various parties seek review of the circuit court's decision. We reverse the order of the circuit court and uphold the PSC's final decision and order in all respects.

s 3. We begin our discussion by explaining the historical role of the PSC and setting forth the factual background and procedural posture of this case. We then systematically address the issues presented by the parties in an analysis divided into three principal sections. Due to the complexity of this case, we set forth the following table of contents to aid the reader:³

[282 Wis.2d 293]

Table of Contents

I. The Public Service Commission s 4 II. Factual Background/Procedural Posture s 11 III. Standard of Review s 35 IV. Analysis s 47 A. Completeness of CPCN Application s 48 B. Issuance of the CPCN s 98 1. Wisconsin's Energy Priorities Law s 98 2. The Plant Siting Law s 135 a. Reasonable Needs/Public Interest s 141 b. Adverse Impact on Environmental Values s 163 c. Effect on Wholesale Competition s 169 d. Common Systems Approval s 182 3. Environmental Impact Statement s 187 4. Conditional Issuance of CPCN s 227 C. Mitigation Payments s 263 V. Conclusion s 281

I. THE PUBLIC SERVICE COMMISSION

s 4. As we evaluate the PSC's action in this matter, we find it helpful to consider the historical role of the PSC. Wisconsin's progressive roots made this state a leader in the trend toward increased utility regulation at the dawn of the twentieth century. Under Governor Robert M. La Follette, this state became known for progressive reforms. Paul D. Carrington & Erica King,

[282 Wis.2d 294]

Law and the Wisconsin Idea, 47 J. Legal Educ. 297, 299, 314 (1997). One of the main features of La Follette's "Wisconsin Idea" was the regulation of railroads and other public utilities. Id.

s 5. In 1905 Wisconsin created the Railroad Commission and charged it with the duty of regulating railroad rates.⁴ To this end, the Railroad Commission had the power to "fix and order" rates it determined to be "just and reasonable" if it found a railroad's practices "unreasonable" or its service "inadequate." Wis. Stat. ch. 87, § 1797-12 (1911).

s 6. Two years later, the legislature substantially expanded the Railroad Commission's power.⁵ First, the Railroad Commission was given the power to regulate all "public utilit[ies]," including companies providing telephone service, heat, light, water, or power to the public. Wis. Stat. ch. 87, § 1797m-1(1) (1911). The Commission's power was very broadly defined: "The railroad commission of Wisconsin is vested with power and jurisdiction to supervise and regulate every public utility in this state and to do all things...