Wis. Indus. Energy Grp., Inc. v. Pub. Serv. Comm'n of Wis.

• Decision Date: 11 July 2012
• Docket Number: No. 2010AP2762.,2010AP2762.
• Parties: WISCONSIN INDUSTRIAL ENERGY GROUP, INC. and Citizens Utility Board, Petitioners–Appellants, v. PUBLIC SERVICE COMMISSION of Wisconsin, Respondent–Respondent, Wisconsin Electric Power Company and Wisconsin Power and Light Company, Intervenors–Respondents, Wisconsin Public Service Corporation, Intervenor.
• Court: Wisconsin Supreme Court

342 Wis.2d 576

819 N.W.2d 240

2012 WI 89

WISCONSIN INDUSTRIAL ENERGY GROUP, INC. and Citizens Utility Board, Petitioners–Appellants,

v. PUBLIC SERVICE COMMISSION of Wisconsin, Respondent–Respondent,Wisconsin Electric Power Company and Wisconsin Power and Light Company, Intervenors–Respondents,Wisconsin Public Service Corporation, Intervenor.

No. 2010AP2762.

Supreme Court of Wisconsin.

Argued April 17, 2012.

Decided July 11, 2012.

For the petitioners-appellants there were briefs by Kira E. Loehr and Citizens Utility Board, Steven A. Heinzen, P. Duncan Moss and Godfrey & Kahn, S.C., Madison, and oral argument by Kira E. Loehr.

For the respondent-respondent there were briefs by Cynthia Smith, Justin W. Chasco, Steven Levine and Public Service Commission of Wisconsin and oral argument by Justin W. Chasco.

For the intervenors-respondents there were briefs by Brian D. Winters, Joseph Orion Wilson and Quarles & Brady LLP, Milwaukee, Michael Greiveldinger, Arshia Javaherian, and Wisconsin Power and Light Company, and oral argument by Michael S. Greiveldinger and Joseph Orion Wilson.

PATIENCE DRAKE ROGGENSACK, J.

[342 Wis.2d 582]¶ 1 This case comes before us by certification from the court of appeals, pursuant to Wis. Stat. § 809.61 (2009–10).¹ We are asked to decide whether the Public Service Commission of Wisconsin (PSC) correctly concluded that Wisconsin Power and Light's (WPL) application to construct a large, out-of-state, electric generating facility was properly reviewed under Wis. Stat. § 196.49(3), the “Certificate of Authority”(CA) statute, ² or whether Wis. Stat. § 196.491(3), the “Certificate of Public Convenience and Necessity” (CPCN) statute, should have been applied.

¶ 2 Applying due weight deference, we conclude that the PSC's interpretation of the CPCN law as applying exclusively to in-state facilities and its decision to analyze WPL's application under the CA law were reasonable, and that there is not a more reasonable interpretation of the laws. The PSC examined the language, purpose, and context of both the CA and the CPCN laws and concluded that the CA law governed WPL's application to construct an out-of-state facility. Additionally, the PSC concluded that applying the CPCN law to an out-of-state facility would exceed the jurisdiction of Wisconsin laws and lead to unreasonable results. Based on our review of these statutes and the corresponding administrative rules, we conclude that there is not a more reasonable interpretation of the CA and the CPCN laws. Accordingly, we affirm the circuit court's order,³ which affirmed the PSC's November 6, 2008, Interim Order in PSC Docket No. 6680–CE–173.

I. BACKGROUND

¶ 3 On June 6, 2008, WPL filed an application with the PSC for the construction of a 200–megawatt wind-powered electric generating facility in Freeborn County, Minnesota, to be known as the Bent Tree Wind Project. The application was entitled “Application for Certificate of Public Convenience and Necessity” and was filed “pursuant to the requirements of Wis. Stat. §§ 196.49, 196.491 ... and any other rule or law deemed applicable by the [PSC].”

¶ 4 In response to WPL's application, the PSC issued a Notice of Proceeding and Request for Comments, seeking public comment on whether WPL's application should be reviewed under the CPCN or the CA law. Petitioners here, Wisconsin Industrial Energy Group, Inc. and Citizens Utility Board (collectively, WIEG), filed comments in response to the PSC's Notice, arguing that the PSC was statutorily required to apply the CPCN law because Bent Tree exceeded the CPCN law's 100–megawatt threshold, thereby triggering that law's more demanding review procedures. The PSC held an open meeting at which it deliberated on the issue.

[342 Wis.2d 584]¶ 5 On November 6, 2008, the PSC issued an Interim Order wherein it concluded that the CA law was the appropriate statute under which to review WPL's Bent Tree application. In its Interim Order, the PSC acknowledged that neither the CA nor the CPCN law explicitly addressed whether either law applied to out-of-state facilities. However, the PSC ultimately concluded that the CA law could validly be applied to such facilities, based on the language, context, and historical application of that law.

¶ 6 Additionally, the PSC noted that the procedures for reviewing applications under the CA law afforded ample ratepayer protections, such that the CPCN did not need to be stretched to apply to out-of-state facilities in an attempt to better protect ratepayers. Rather, the PSC concluded that applying the CPCN law to an out-of-state facility would present problems because multiple provisions in the CPCN law would be unreasonable or absurd if applied to applications for out-of-state facilities.

¶ 7 The PSC noted the “ ‘elementary principle[ ] that the laws of one State have no operation outside of its territory, except so far as is allowed by comity,’ ” quoting Pennoyer v. Neff, 95 U.S. 714, 722, 24 L.Ed. 565 (1877). Additionally, the PSC recognized that Wisconsin law specifically contemplates a limitation based on the state's physical boundaries, citing Wis. Stat. § 1.01 (“[t]he sovereignty and jurisdiction of this state extend to all places within the boundaries declared in article II of the constitution.”).

¶ 8 The PSC discussed multiple provisions of the CPCN law that, if applied to an out-of-state facility, could require the PSC to assert regulatory authority beyond the state's borders. Such effect, the PSC concluded, could interfere with the host state, while affordingno benefit to Wisconsin residents. The PSC rejected the possibility of narrowly construing certain provisions of the CPCN law to make that law more reasonable as applied to out-of-state facilities; instead, the PSC decided that the most reasonable approach was to interpret the CPCN law as applying exclusively to facilities within the state.

¶ 9 The PSC noted that its conclusion was supported by the legislative history of the CPCN law, which included a statement from the Legislative Reference Bureau's (LRB) analysis of the bill. The LRB analysis stated that the CPCN law “establishes a method whereby the development of major electric generating and transmission facilities in this state is subject to scrutiny by the public ... and to approval by [the PSC and the DNR].” (Emphasis in Interim Order.) The PSC found this helpful because the LRB's analysis was “ ‘printed with and displayed on the bill when it [was] introduced in the legislature,’ ” quoting Dairyland Greyhound Park, Inc. v. Doyle, 2006 WI 107, ¶ 32, 295 Wis.2d 1, 719 N.W.2d 408.

¶ 10 Finally, the PSC concluded that it could reasonably apply the CA law to review out-of-state construction projects, with no need to sever or modify any of that law's provisions. The PSC noted that it had previously applied the CA law to review public utilities' applications for out-of-state projects, and that the relevant rules, e.g.,Wis. Admin. Code § PSC 112.05(2) (May 2008), ⁴ expressly contemplated such applications. Accordingly, the PSC concluded the most reasonable course was to evaluate WPL's Bent Tree application under the CA law.

[342 Wis.2d 586]¶ 11 Commissioner Lauren Azar dissented from the Interim Order. She agreed with WIEG's primary argument that the more demanding application and hearing procedures under the CPCN law were mandatory whenever a construction project was proposed that exceeded the 100–megawatt threshold under the CPCN, regardless of location. She relied on the notion that the CPCN law was intended to afford greater ratepayer protections, and therefore allowing applications for large facilities to be processed under the CA law could erode such protections.

¶ 12 After entry of the PSC's Interim Order, the PSC held a hearing and open meetings on WPL's Bent Tree application, and considered both in-person and pre-filed testimony. On July 30, 2009, the PSC granted WPL a Certificate of Authority for the Bent Tree project.

¶ 13 On August 27, 2009, WIEG petitioned for judicial review of the PSC's decision in the Dane County Circuit Court, pursuant to Wis. Stat. § 196.41 and Wis. Stat. § 227.52. The circuit court concluded that, although de novo review applied to the PSC's decision to apply the CA rather than the CPCN law, the PSC's decision was correct. WIEG appealed, and the court of appeals then certified the question to this court. We accepted the certification.

II. DISCUSSION

A. Standard of Review

¶ 14 This is a review of an administrative agency's decision under Wis. Stat. § 227.52. When an administrative agency's decision is challenged in the circuit court under § 227.52, an appellate court reviews the decision of the agency, not that of the circuit court. Cnty. of Dane v. LIRC, 2009 WI 9, ¶ 14, 315 Wis.2d 293, 759 N.W.2d 571. We are asked to review whether the PSC properly concluded that the CA law was the correct standard under which to review WPL's Bent Tree application, or whether the CPCN law should have been applied. The interpretation of statutes and their application to undisputed facts are questions of law, which we review independently. Id.

¶ 15 Statutory interpretation begins with the language of the statute at issue. Watton v. Hegerty, 2008 WI 74, ¶ 14, 311 Wis.2d 52, 751 N.W.2d 369. “If the meaning of the statute is plain, we ordinarily stop the inquiry.” Id. (quoting State ex rel. Kalal v. Circuit Court for Dane Cnty., 2004 WI 58, ¶ 45, 271 Wis.2d 633, 681 N.W.2d 110). The plain meaning of a statute can be discerned from the words used, as well as the context in which those words are used. Id. Additionally, statutory purpose is helpful in a plain meaning analysis; courts will favor an interpretation of statutory language that fulfills the statute's purpose. See State v. Hanson, 2012 WI 4, ¶ 17, 338 Wis.2d 243, 808 N.W.2d 390. Statutory purpose can be stated expressly or it may be discerned from context and structure. Id. Moreover, statutory language is not interpreted in...