July/August 2018 Issue

Also in this issue: The End of Deference to Agency Interpretations of Law in Wisconsin     |     Court of Appeals Rules for City in Town’s Challenge to Annexation Ordinance     |     U.S. Supreme Court Decision Impacts Public Safety Union’s Dues Deductions     |     Wisconsin Supreme Court Extends Building Permit Rule to Land

Court of Appeals Clears the Way for Badger Coulee Project

Richard Heinemann | 08.02.18

The Wisconsin Court of Appeals has upheld a 2015 decision by the Public Service Commission (PSC or Commission) to grant a Certificate of Public Convenience and Necessity (CPCN) for the so-called ​“Badger Coulee Project” (Project), a 345 kilovolt high voltage line co-developed by a group of public utilities comprised of the American Transmission Company LLC (ATC), WPPI Energy, Dairyland Power Cooperative, and several others (the ​“Companies”). The transmission project is intended to improve electric reliability for the City of LaCrosse and its environs, extending to Winona, Minnesota. A substantial portion of the line is located in the Town of Holland (Town), which opposed the project on several grounds, including a lack of need due to the recent construction of another high voltage line in the area (the CapX line).

After the Commission rejected the Town’s request for rehearing, the Town sought judicial review, arguing that the Commission’s Environmental Impact Statement (EIS) was legally insufficient; that the line was unnecessary in view of slow growth trends in the area; and that the line would unreasonably interfere with the Town’s land use and development plans. 

Limiting its review on jurisdictional grounds to the Town’s petition for review of the PSC’s initial decision (rather than on the PSC’s subsequent denial of the Town’s petition for rehearing of that decision), the circuit court affirmed the PSC’s determination of need. However, the circuit court refrained from addressing whether the EIS was legally sufficient because the EIS had not been formally included in the record. Instead, the court remanded the matter to the PSC so that it could complete the record, as well as reevaluate the feasibility of co-locating an eight mile stretch of the Project on the existing CapX line, which the Town had sought in accordance with statutory guidelines requiring that new transmission facilities be sited in existing transmission corridors ​“to the extent feasible”. 

After first determining that the PSC’s decision should be accorded great weight deference under the standards enunciated by the Wisconsin Supreme Court in Clean Wisconsin, Inc. v. Public Service Commission of Wisconsin, 2005 WI 93, 282 Wis. 2d 250, 700 N.W. 2d 768, the court of appeals found a reasonable basis for the Commission’s determination that the Project had met the ​“reasonable needs of the public” under Chapter 196. Citing the Commission’s review of testimony and evidence on a range of relevant factors, including economic benefits and public policy considerations such as the development of alternative power sources, the court of appeals found that the Commission was justified in applying a broader definition of ​“reasonable needs” than the narrower, reliability-based definition advocated by the Town. 

The court of appeals then applied great weight deference again in upholding the Commission’s determination that the EIS was legally sufficient. Noting that the EIS prepared by the PSC was over six hundred pages long, with detailed analysis of all the factors enumerated in Wis. Stat. sec. 1.11(2)(c), the court found the EIS to be a thorough and detailed report, and rejected the Town’s argument that the Commission had merely parroted the positions of the Companies, rather than doing its own independent analysis. 

On the siting issue, the court of appeals disagreed with the circuit court’s finding that the PSC had failed to establish a rational basis for determining that only one mile of the project could be located with the CapX line. The court of appeals found that the Commission had reasonably relied on the Companies’ own analysis, which showed that co-locating the lines had to be limited to a one mile stretch in order to avoid incurring unacceptable service disruption risks. In so holding, the court of appeals invalidated the circuit court’s injunction against further construction on the seven mile portion of the Project at issue. 

Finally, the court of appeals reviewed de novo the issue of whether the circuit court had properly determined that it lacked jurisdiction to review the PSC’s order denying the Town’s request for rehearing. Citing Schwartz v. Wisconsin Department of Revenue, 2002 WI App 255, 258 Wis. 2d 112, the Town argued that the PSC had improperly denied the petition for rehearing because it failed to take into account new evidence regarding growth trends in the area that had not been available prior to the PSC’s decision. The circuit court found that it did not have jurisdiction over the PSC’s denial of the rehearing request because the order denying the request was discretionary, and not based on any factual findings on the record. 

The court of appeals disagreed, concluding that circuit court review was permissible because Wis. Stat. §. 196.41 expressly permits judicial review of PSC orders, as well as decisions, and because the Commission’s stated reasons for denying the petition show that it used the same analysis in reviewing the new information that had been used in reviewing the original record. Rather than remand to the circuit court to determine the rehearing question, the court of appeals applied the ​“substantial evidence” standard under Wis. Stat. § 227.49(3) and concluded that rehearing is not warranted because the PSC had a rational basis for determining that the new evidence was not sufficiently strong to reverse or modify its decision. 

With the appellate court decision, construction on the line can now proceed. According to ATC, the line is expected to be in service by the end of the year. 

— Richard A. Heinemann