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Town of Holland v. Public Service Commission of Wis.

Court of Appeals of Wisconsin, District IV

May 30, 2018

Town of Holland, Plaintiff-Appellant-Cross-Respondent,
v.
Public Service Commission of Wis., Defendant-Respondent-Cross-Appellant, Midcontinent Independent System Operator, Inc. and City of Onalaska, Intervenors, American Transmission Company LLC, Northern States Power Company, Dairyland Power Cooperative, WPPI Energy, SMMPA Wisconsin LLC and ATC Management, Inc., Intervenors-Respondents-Cross-Appellants. Town of Holland, Plaintiff-Appellant-Cross-Respondent,
v.
Public Service Commission of Wis., Defendant-Respondent-Cross-Appellant, Wppi Energy, SMMPA Wisconsin LLC, Dairyland Power Cooperative, Northern States Power Co. And American Transmission Company LLC, Intervenors-Respondents-Cross-Appellants.

          APPEAL and CROSS-APPEALS from orders of the circuit court for La Crosse County, Cir. Ct. Nos. 2015CV219, 2015CV379 TODD W. BJERKE, Judge. Affirmed in part, reversed in part, and cause remanded with directions.

          Before Brennan, P.J., Brash and Dugan, JJ.

          BRASH, J.

         ¶1 The Town of Holland (the "Town") appeals an order of the circuit court, as changed and modified by a supplemental order, regarding a decision of the Public Service Commission of Wisconsin ("PSC") relating to the construction of a high voltage transmission line in the La Crosse area. The circuit court affirmed the PSC's decision that the transmission line was necessary to provide an adequate supply of electricity to the La Crosse area. The circuit court further held, contrary to the Town's assertion, that the Environmental Impact Statement ("EIS") the PSC prepared was not legally insufficient.

         ¶2 However, the circuit court found that the PSC had not provided a rational basis for its determination that it was not practicable to utilize an existing transmission line for a seven-mile portion of the proposed new line located in the Town. The court therefore remanded the matter to the PSC for reevaluation of the siting of that seven-mile portion. The court initially enjoined the continuation of work on that contested portion, but subsequently stayed that injunction in its supplemental order pending the resolution of this appeal.

         ¶3 The Town also appeals the circuit court's determination that it did not have jurisdiction to review the PSC's order denying a petition for rehearing on its decision.

         ¶4 The PSC cross-appeals on whether the circuit court properly remanded the issue regarding the contested seven-mile portion, and whether the court erred in enjoining work in that specific area. The companies involved in the construction of the transmission line, which are intervenors in this matter, also cross-appeal on that issue: American Transmission Company LLC; Northern States Power Company; Dairyland Power Cooperative; WPPI Energy; SMMPA Wisconsin LLC; and ATC Management, Inc. (collectively the "Companies").[1]

         ¶5 We conclude that the PSC properly determined that construction of the new transmission line is necessary, and that the EIS prepared by the PSC was not legally insufficient. We therefore affirm the circuit court on those issues.

         ¶6 However, we find that the PSC did provide a rational basis for its determination relating to the contested seven-mile portion of the transmission line, and therefore we reverse the circuit court's order to remand that issue to the PSC. Consequently, we remand this matter to the circuit court to vacate the injunction.

         ¶7 Additionally, we determine that the PSC's order denying the petition for rehearing is judicially reviewable, contrary to the circuit court's determination that it did not have jurisdiction to review that order. We therefore reviewed the denial order by the PSC, and hold that the PSC properly denied the petition for rehearing.

         Background

         ¶8 In October 2013, the Companies applied to the PSC for a Certificate of Public Convenience and Necessity ("CPCN") to construct and operate a 345 kilovolt high voltage transmission line known as the Badger Coulee Project.[2] The purpose of the Project is to improve the reliability of electrical power for the City of La Crosse and its surrounding area, extending to Winona, Minnesota. Substantial portions of the Project are located in the Town.

         ¶9 The Town, among others, was opposed to the Project, and intervened in the proceedings with the PSC. The Town asserted that the Project was not necessary because transmission lines had recently been constructed in the same general area, and additional lines were not warranted due to slow growth projections for that area. The Town also cited concerns relating to potential health impacts from the new transmission lines, as well as the condemnation of private property for transmission line easements. The Town further contended that construction of the Project would adversely impact its land use plan. Due to this opposition, the proceedings surrounding the CPCN application were considered to be a Class 1 contested case, requiring the PSC to hold public hearings on the application and to provide the opposing parties with the opportunity to present and rebut evidence. See Wis. Stat. § 227.44 (2015-16). See also Wis. Stat.[3] §§ 227.01(3)(a) and 196.491(3)(b).

         ¶10 In the meantime, the PSC, upon receiving the CPCN application from the Companies, was statutorily required to prepare an EIS to determine the potential effects of the Project on the "quality of the human environment." See Wis. Stat. § 1.11(2)(c). A draft of the EIS for the Project as prepared by the PSC was published in August 2014; the PSC accepted comments on the draft EIS for forty-five days after its publication. The PSC reviewed the comments its received and incorporated additional information based on those comments. In November 2014 it released the finalized EIS, which contained over six hundred pages.

         ¶11 After the release of the EIS, the PSC held a hearing on the CPCN application over several days in January 2015. At that time, the intervening parties, who had pre-filed written briefs and exhibits, were permitted to present and rebut expert testimony. Prior to that, in December 2014, the PSC held a number of hearings regarding the Project, taking both oral and written testimony from the public. Public comments were also accepted on the PSC's website.

         ¶12 The PSC released its final decision on the matter on April 23, 2015. It found that "[a]pproval of the [P]roject is in the public interest and is required by the public convenience and necessity." Accordingly, the PSC issued the CPCN authorizing the Companies to commence construction of the Project.

         ¶13 Two petitions for rehearing and a request for clarification were filed in May 2015. The rehearing petition at issue here was brought by Citizen's Energy Task Force, Inc. and Save Our Unique Lands of Wisconsin, Inc.[4] The petition asserted that there was newly-discovered evidence relating to growth trends that was not available at the time that the PSC made its decision. The PSC denied that petition.[5]

         ¶14 The Town subsequently filed a petition for judicial review of the PSC's decision. In that petition, the Town argued that the EIS was legally insufficient because it failed to "study, develop and describe" alternatives to the Project as statutorily required. See Wis. Stat. § 1.11(2)(e). The Town further asserted that the Project was "unreasonably in excess of probable future requirements" for energy use based on growth trends, and therefore is not necessary and not in the public interest. Additionally, the Town contended that the Project will "unreasonably interfere with the orderly land use and development plans" for the Town.

         ¶15 On review, the circuit court first addressed jurisdictional issues. It found that although it did have jurisdiction over the Town's petition for review of the PSC's final decision, it did not have jurisdiction to review the PSC's denial of the petition for rehearing. The court reasoned that the denial was a discretionary decision on the part of the PSC and thus was not reviewable, citing Village of Prentice v. Transportation Commission of Wisconsin, 123 Wis.2d 113, 121, 365 N.W.2d 899 (Ct. App. 1985).

         ¶16 Next, the circuit court found that the PSC had "properly determined that [the] Badger[]Coulee Project … was needed to provide an adequate supply of energy to the La Crosse area." However, the court pointed out that the EIS was not included in the record, and it therefore could not address its sufficiency. Thus, the matter was remanded to the PSC to rectify the incomplete record. The PSC subsequently supplemented the record by submitting the EIS, which the circuit court found to be legally sufficient, resolving that remanded issue.

         ¶17 The circuit court also remanded this matter for reevaluation of an issue relating to the use of an existing transmission line for a portion of the Project. That existing line is known as "CapX, " and had been approved for the La Crosse area a few years earlier; it also runs through the Town. Use of the CapX line for this Project would require triple-circuiting to accommodate the overlap. The Town identified an eight-mile portion of the Project that it asserted could be located with the CapX line, and asserted that this would be the proper course of action under Wis.Stat. § 1.12(6), which requires electric transmission facilities to be sited in existing utility corridors "to the greatest extent feasible" before establishing new corridors. Id.

         ¶18 In its final decision, the PSC found that only one mile of the existing line could be triple-circuited under standards set forth by the North American Electric Reliability Corporation (NERC), as opposed to the entire eight-mile portion proposed by the Town. However, the circuit court found that the PSC's determination was not supported by the NERC standards upon which it had relied. Without that support, the court found that the PSC had not established a rational basis for limiting the overlap with the existing transmission line to one mile. As a result, the court ordered the PSC "to reevaluate the siting of the Project through the seven-mile portion of the Project" that the Town proposed be sited with the CapX line.

         ¶19 Furthermore, the circuit court initially issued an injunction that precluded any work on that contested seven-mile portion from continuing until that issue was rectified by the PSC to the satisfaction of the court. However, the PSC moved for relief from that order, citing the excessive costs associated with delays in the completing the Project. The court then stayed the injunction, pending an appeal. This appeal follows.

         Discussion

         I.Standard of Review and Level ...


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