Clean Wisconsin, Inc. v. Public Service Commission of Wisconsin

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2005 WI 93 SUPREME COURT CASE NO.: OF WISCONSIN 2004AP3179 COMPLETE TITLE: Clean Wisconsin, Inc. p/k/a Wisconsin's Environmental Decade Institute, Inc., SC Johnson & Son, Inc. and Calpine Corporation, Petitioners-Respondents-CrossAppellants-Cross-Respondents, Town of Caledonia, Petitioner-Cross-Respondent, v. Public Service Commission of Wisconsin and Wisconsin Department of Natural Resources, Respondents-Co-Appellants-CrossRespondents, Wisconsin Electric Power Company, W.E. Power, LLC and Wisconsin Energy Corporation, Interested Parties-AppellantsCross-Respondents, Dairyland Power Cooperative, Interested Party-Cross-Respondent, Madison Gas & Electric Company and Wisconsin Public Power, Inc., Interested Parties-Co-AppellantsCross-Respondents, City of Oak Creek, Interested Party-Respondent-CrossAppellant, Robert H. Owen, Interested Party-RespondentCross-Respondent. __________________________________ Calpine Corporation, Petitioner, v. 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. ON BYPASS FROM THE COURT OF APPEALS OPINION FILED: SUBMITTED ON BRIEFS: June 28, 2005 ORAL ARGUMENT: March 30, 2005 SOURCE OF APPEAL: COURT: COUNTY: JUDGE: Circuit Dane David T. Flanagan, III JUSTICES: CONCURRED: DISSENTED: NOT PARTICIPATING: BUTLER, JR., J., concurs (opinion filed). BRADLEY, J., dissents (opinion filed). ABRAHAMSON, C.J., joins the dissent. CROOKS, J., did not participate. ATTORNEYS: 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-crossrespondents, 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. 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. 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. 2005 WI 93 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 2004AP3179 (L.C. No. 03 CV 3478/3731 & 04 CV 133/149/530/533) STATE OF WISCONSIN : IN SUPREME COURT Clean Wisconsin, Inc. p/k/a Wisconsin's Environmental Decade Institute, Inc., SC Johnson & Son, Inc. and Calpine Corporation, Petitioners-Respondents-CrossAppellants-Cross-Respondents, Town of Caledonia, Petitioner-Cross-Respondent, v. Public Service Commission of Wisconsin and Wisconsin Department of Natural Resources, FILED JUN 28, 2005 Respondents-Co-Appellants-CrossRespondents, Wisconsin Electric Power Company, W.E. Power, LLC and Wisconsin Energy Corporation, Interested Parties-AppellantsCross-Respondents, Dairyland Power Cooperative, Interested Party-CrossRespondent, Madison Gas & Electric Company and Wisconsin Public Power, Inc., Cornelia G. Clark Clerk of Supreme Court Interested Parties-CoAppellants-Cross-Respondents, City of Oak Creek, Interested Party-RespondentCross-Appellant, Robert H. Owen, Interested Party-RespondentCross-Respondent. __________________________________ Calpine Corporation, Petitioner, v. 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. APPEAL from an order of the Circuit Court for Dane County, David T. Flanagan, III, Judge. ¶1 JON P. WILCOX, J., Reversed. DAVID T. PROSSER, J., PATIENCE DRAKE ROGGENSACK, J., and LOUIS B. BUTLER JR., J. This case is before pursuant to represents a the court Wis. Stat. § (Rule) on a 809.60 motion to bypass, (2001-02).1 It consolidation of five separate actions seeking judicial review of a final decision and order of the Public Service Commission (PSC) that 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 1 All subsequent references to the Wisconsin Statutes are to the 2001-02 version unless otherwise indicated. 2 WEC owns Wisconsin Electric Power Company (WEPCO), another party in this suit. In this opinion, we refer to both interchangeably. No. 2004AP3179 Creek. The Dane County Circuit Court, David T. Flanagan, III, Judge, vacated proceedings. the PSC's order and remanded for further 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. ¶2 decision. Various parties seek review of the circuit court's We reverse the order of the circuit court and uphold the PSC's final decision and order in all respects. ¶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 Table of Contents I. The Public Service Commission ¶4 II. Factual Background/Procedural Posture ¶11 III. Standard of Review 3 Attached at the compiling the relevant opinion. ¶35 end of this opinion is an terms and acronyms utilized 2 appendix in this No. 2004AP3179 IV. Analysis ¶47 A. Completeness of CPCN Application ¶48 B. Issuance of the CPCN ¶98 1. Wisconsin's Energy Priorities Law ¶98 2. The Plant Siting Law ¶135 a. Reasonable Needs/Public Interest ¶141 b. Adverse Impact on Environmental Values ¶163 c. Effect on Wholesale Competition ¶169 d. Common Systems Approval ¶182 3. Environmental Impact Statement ¶187 4. Conditional Issuance of CPCN ¶227 C. Mitigation Payments ¶263 V. Conclusion ¶281 I. ¶4 THE PUBLIC SERVICE COMMISSION 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, Law and the Wisconsin Idea, 47 J. Legal Educ. 297, 299, 314 (1997). "Wisconsin One of the main features of La Follette's Idea" was public utilities. the regulation Id. 3 of railroads and other No. ¶5 2004AP3179 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). ¶6 Two years later, the legislature expanded the Railroad Commission's power.5 Commission was given the power to substantially First, the Railroad regulate all "public utilit[ies]," including companies providing telephone service, heat, light, water, or power to the public. § 1797m-1(1) (1911). defined: Wis. Stat. ch. 87, The Commission's power was very broadly "The railroad commission of Wisconsin is vested with power and jurisdiction to supervise and regulate every public utility in convenient 4 See comprised Wis. Stat. railroad Wis. Stat. all public this in the state and to do exercise of such all things power and necessary and jurisdiction." ch. 62, Laws of 1905. The Railroad Commission was of three commissioners, as is the PSC today. ch. 87, § 1797(1) (1911). The Act required every to "furnish reasonably adequate service," ch. 87, § 1797(3) (1911), as current law requires of utilities. Cf. Wis. Stat. § 196.03(1). 5 Chapter 499, Laws of 1907. One of the principal drafters of the law was Professor Eugene Gilmore of the University of Wisconsin Law School who celebrated the bill's passage by proclaiming it "the consummation of the movement towards a more effective control of public service companies." Paul D. Carrington & Erica King, Law and the Wisconsin Idea, 47 J. Legal Educ. 297, 325-26 (1997). Gilmore hoped that the law would spur privately owned utilities with monopolies to provide better service. Id. 4 No. Wis. Stat. ch. public utility service." ¶7 87, § 1797m-2 was required (1911) to (emphasis furnish 2004AP3179 added). "reasonably Every adequate Wis. Stat. ch. 87, § 1797m-3 (1911).6 In Wis. Stat. ch. 87, § 1797m-60(2) (1911), the legislature reiterated that if the Commission determined that any "service is inadequate or that any service which can reasonably be demanded cannot be obtained, the commission shall determine and declare and by order fix reasonable . . . service to be furnished . . . in the future . . . ."7 ¶8 In 1931 the legislature faced a crisis caused by the confluence of the Great Depression and the "electrification" of Wisconsin farms. Paul W. Glad, The History of Wisconsin Volume 6 The primary duties of the Railroad Commission were set out in Wis. Stat. ch. 87, § 1797m-46(2) (1911): If [the Commission finds] any . . . service complained of is . . . insufficient . . . or if it be found that any service is inadequate or that any reasonable service cannot be obtained, the commission shall have power to substitute therefor such other regulations, measurements, practices, service or acts and to make such order respecting, and such changes in such regulations, measurements, practices, service or acts as shall be just and reasonable. 7 One commentator noted that because of this legislation, "[c]redit for the first development of the public service commission type of control is shared jointly by Wisconsin and New York." William E. Mosher & Finla G. Crawford, Public Utility Regulation at 22 (Harper & Bros. 1933). Between 1907 and 1914, 27 other states followed Wisconsin's lead, and nearly every state had a public service commission by 1920. Robert L. Swartwout, Current Utility Regulatory Practice from a Historical Perspective, 32 Nat. Res. J. 289, 301 (1992). Most of the laws authorizing public service commissions in other states are modeled on Wisconsin's law. Id. 5 No. V: 2004AP3179 War, a New Era, and Depression, 1914-1940 at 382 (State Historical responded Society by of Wisconsin, broadening the 1990). Commission's The legislature ratemaking authority and renaming it the "Public Service Commission of Wisconsin." § 2, ch. 183, Laws of 1931; Wis. Stat. § 195.01(9) (1931). The new PSC retained the authority of the Railroad Commission to require utilities to upgrade inadequate service. Wis. Stat. § 196.37(2) (1931). ¶9 issue The legislature also gave the PSC the authority to "conditional, orders." temporary, Wis. Stat. § 196.395 construed this authorization emergency (1931). to and supplemental Later, include the this power court to temporary and emergency rates under certain circumstances. set See, e.g., Friends of the Earth v. PSC, 78 Wis. 2d 388, 401, 254 N.W.2d 299 (1977). ¶10 In 1977 some of the PSC's auxiliary functions related to transportation regulation were assigned to other agencies, making the utilities.8 Railroad PSC's primary focus the regulation of public Today, 100 years after the establishment of the Commission, the PSC retains much of the form and authority of the original Commission, especially the power to "make any just and reasonable order" to ensure that utilities provide adequate service. II. Wis. Stat. § 196.37(2). FACTUAL BACKGROUND AND PROCEDURAL POSTURE 8 See § 1291m, ch. 29, Laws of 1977 (creating Chapter 189, authorizing the Transportation Commission). 6 No. ¶11 2004AP3179 Wisconsin utilities must provide "reasonably adequate service and facilities" to the public. Wis. Stat. § 196.03(1). The utility PSC must "reasonably determine adequate reasonable whether service" order" and to Wis. Stat. § 196.37(1)-(3); a may make correct Weyauwega is providing "any just the Tel. Co. and problem. v. PSC, 14 Wis. 2d 536, 550 n.5, 111 N.W.2d 559 (1961).9 ¶12 To ensure that it satisfies this requirement, an electric utility must plan ahead. statutory Due to the long lead time associated with constructing new power generation facilities, the PSC recommends planning at least five years into the future. In the late 1990s, sharply increased energy demands led both WEC and regulatory agencies to identify "a need for new baseload [power] generation after 2007." WEC determined that its peak customer demand would grow from a peak rate of 5764 megawatts (MW) in 2002 to 7612 MW in 2011 an annual growth rate of 2.9 percent. ¶13 WEC subsequently determined that it could not satisfy this need without a "substantial increase in electric generation resources." Accordingly, it designed a plan styled "Power the Future" (PTF). WEC planned to implement PTF in two stages. In the first stage, (PTF-I), WEC proposed to construct two 545 MW gas-fueled units at its site in Port Washington, Wisconsin. 9 In In this opinion, we need not attempt to fully define the phrase "reasonably adequate service" or delineate its scope. It seems plain enough that to provide "reasonably adequate service," an electric utility must amass and maintain the capacity to provide reliable electric service to its customers. 7 No. the second coal-fired stage, units (PTF-II), (two 615 WEC MW proposed units and to 2004AP3179 construct one 600 MW three unit), described as its Elm Road Generating Station (ERGS), near its existing facility in Oak Wisconsin.10 Creek, WEC filed a combined CPCN application for both phases of PTF on January 31, 2002.11 ¶14 deadlines WEC's filing triggered and substantive several requirements review of CPCN applications. statutory relating to the time PSC's Within 30 days of such a filing, the PSC must determine whether an application is "complete." Wis. Stat. § 196.491(3)(a)2. Essentially, the PSC must determine whether an application contains all the information required in Wis. Admin. Code § PSC 111.53 (June, 2000)12("CPCN applications for large electric generating facilities."). ¶15 the PSC After it determines that an application is "complete," has 180 days to Wis. Stat. § 196.491(3)(g). approve The or PSC reject may the application. petition the Dane 10 WEC's PTF-II application proposed two Super-Critical Pulverized Coal (SCPC) electric generating units one Integrated Gasoline Combined-Cycle (IGCC) unit. 11 After submitting this application to the PSC, WEC negotiated an agreement with the PTF-II host municipality, the City of Oak Creek, under which WEC would make mitigation payments to offset the impacts of the project on the City. With certain minor exceptions, the parties agreed that the agreement would "not [become] effective until, and [would become effective] only so long as, the PSCW issues the CPCN for the New Facilities in the City . . . ." 12 All subsequent references to Wis. Admin. Code § PSC 111 are to the June 2000 version unless otherwise indicated. 8 No. 2004AP3179 County Circuit Court to extend that deadline by an additional 180 days. Id. If the PSC does not act within that time limit, the CPCN is issued by operation of law. ¶16 of the Id. During the review period, the PSC must comply with all requirements expressed in Wis. Stat. § 196.491(3)(d), known as the Plant Siting Law, and must make certain express findings regarding a project. For example, the PSC must find that a proposed facility "satisfies the reasonable needs of the public for an adequate supply of electric energy,"13 that "the design . . . is in the public interest,"14 that "[t]he proposed facility will not have values,"15 on . . . environmental undue and adverse impact "[t]he proposed that facility will not have a material adverse impact on competition in the relevant wholesale electric service market."16 Its approval decision must also take the legislative policy embodied in Wisconsin's Energy Wis. Stat. § 1.12(4). ¶17 Priorities Law (EPL) into account. See also Wis. Stat. § 196.025(1). Simultaneously, the PSC must prepare an Environmental Impact Statement (EIS) pursuant to Wis. Stat. § 1.11(2) and Wis. 13 Wis. Stat. § 196.491(3)(d)2. 14 Wis. Stat. § 196.491(3)(d)3. In making this determination, the PSC must consider a variety of factors, including "alternative sources of supply, alternative locations or routes, individual hardships, engineering, economic, safety, reliability and environmental factors . . . ." Id. 15 Wis. Stat. § 196.491(3)(d)4. 16 Wis. Stat. § 196.491(3)(d)7. 9 No. Admin. Code § PSC 4.30 (June, 2000).17 2004AP3179 Generally, an EIS must "inform the [PSC] and the public of significant environmental impacts of a reasonable proposed methods action of environmental effects." and avoiding its or alternatives, minimizing and adverse Wis. Admin. Code § PSC 4.30(1)(a). The PSC may prepare the EIS in conjunction with the Department of Natural Resources (DNR). ¶18 After See Wis. Admin. Code § 4.60(3). undertaking this analysis, the PSC may ultimately issue a CPCN authorizing the applicant to construct the facility. ¶19 In this case, the PSC split WEC's application into two parts, one covering PTF-I and the other covering PTF-II. WEC's PTF-II application is before us.18 asked WEC November to 15, application was submit 2002, additional the complete. PSC Several times, the PSC information. determined Clean Only Finally, that Wisconsin, the Inc. and on PTF-II S.C. Johnson & Son, Inc. challenged the PSC's interim order declaring WEC's application to be complete. The PSC issued an order on April 18, 2003, rejecting the challenge and refusing to reopen its determination. 17 All subsequent references to Wis. Admin. Code § PSC 4 are to the June 2000 version unless otherwise indicated. 18 After WEC made several additional PTF-I filings at the PSC's request, the PSC deemed the PTF-I application complete on April 25, 2002. On December 20, 2002, the PSC mailed its final decision and order conditionally approving the CPCN application for PTF-I. That decision is not before us. 10 No. ¶20 2004AP3179 The PSC's "completeness" determination triggered the statutory provision judgment on requiring the the PSC application Wis. Stat. § 196.491(3)(g). to issue within its 180 final days. Eventually, the PSC exercised its option to petition the Dane County Circuit Court for a 180-day extension to this time period. See id. granted the extension on April 29, 2003. The circuit court Accordingly, the PSC had until November 10, 2003, (360 days after the November 15, 2002 completeness determination) to make its final decision. ¶21 During the PSC's evaluation, Calpine Corporation (Calpine) entered the case in opposition to the project, arguing that it could economically than meet WEC's WEC's power proposal. generation S.C. needs Johnson more & also Son intervened, alleging that the WEC proposal was not in the public interest and was not the least cost alternative. ¶22 2003. The The PSC mailed PSC made its 14 final findings decision of on fact, November 10, including the following: 1. Energy conservation, renewable resources, or other energy priorities listed in Wis. Stat. §§ 1.12 and 196.025, or their combination, are not costeffective or technically feasible alternatives to the projects proposed in this docket. . . . . 3. Part II of PTF . . . satisfies the reasonable needs of the public for an adequate supply of electric energy. 4. The public convenience and necessity require WEC to construct the two [615 MW] units, subject to the conditions specified in this final decision. 11 No. 2004AP3179 5. The two [615 MW] units are reasonable and in the public interest after considering alternative sources of supply, individual hardships, engineering, economic, safety, reliability, and environmental factors. The [600 MW] unit does not meet this standard. . . . . 7. The two [615 MW] units will not have undue adverse impact on other environmental values. . . . . 9. The two [615 MW] units will not have a material adverse impact on competition in the Wisconsin Upper Michigan System (WUMS) wholesale electric service market. . . . . 12. The conditions attached to the CPCN for the two [615 MW] units, as described in this Final Decision, are reasonable. ¶23 The PSC's decision concluded: "W.E. Power LLC . . . may commence construction of two 615 MW Super-Critical Pulverized Coal (SCPC) electric generating units, as described in WEC's project application . . . ." However, the PSC listed 26 conditions and instructions relevant to its CPCN approval, including the following: 1. W.E. Power LLC and its subsidiaries may construct [the two 615 MW units] . . . subject to the conditions specified in this Final Decision. Although the application to construct [the 600 MW unit] is denied, W.E. Power LLC and its subsidiaries may construct common facilities with the [615 MW] units to accommodate up to 3000 MW of generation at this site. . . . . 26. This Final Decision takes effect on the day after it is mailed. The CPCN for the ERGS facility only takes effect when the DNR issues all permits and 12 No. 2004AP3179 approvals that it identified, pursuant to Wis. Stat. § 196.491(3)(a)3.a., as being required prior to construction of the facility. ¶24 reduce In the a split amount decision, of its the PSC ordered payment mitigation also to WEC the to host municipality, Oak Creek, in light of increased shared revenue payments that were available to Oak Creek under 2003 Wis. Act 31. See generally Wis. Stat. § 79.04. ¶25 S.C. Johnson (hereinafter & collectively Son, joined referred to by as Clean Clean Wisconsin Wisconsin), Calpine, and Oak Creek sought review of the PSC's decision in the Circuit Court for The Wis. Stat. § 227.52.19 Dane circuit County, court pursuant to consolidated the actions and issued an order dated November 29, 2004, vacating the PSC's order. ¶26 alleged In its order, the court addressed various points of error concluded that in the the PSC application "complete." conclusion: PSC's decision.20 erred when it First, deemed the court WEC's CPCN The court gave three reasons for this 1) the application did not contain at least two 19 "Administrative decisions which adversely affect the substantial interests of any person, whether by action or inaction, whether affirmative or negative in form, are subject to review as provided in this chapter . . . ." Wis. Stat. § 227.52. 20 We are cognizant that "the focus of our review is the PSC's Order . . . , not the circuit court's decision." Responsible Use of Rural and Agricultural Land (RURAL) v. PSC, 2000 WI 129, ¶20, 239 Wis. 2d 660, 619 N.W.2d 888. However, the circuit's court's order frames many of the parties' arguments in this court, and so we recite the court's conclusions. 13 No. 2004AP3179 proposed "sites," pursuant to Wis. Stat. § 196.491(3)(d)3. and Wis. Admin. Code § PSC 111.53(1)(e); 2) the application did not contain the regulatory approvals required by Wis. Admin. Code § PSC 111.53(1)(f)1.; and 3) the application did not contain certain information about transmission line facilities required by Wis. Admin. Code § PSC 111.53(1)(f)4. ¶27 Second, although it approved parts of the PSC's order issuing the CPCN, the circuit court ultimately determined that the PSC erroneously approved WEC's CPCN application. reached the following conclusions in this regard: The court 1) The PSC properly determined that there was a reasonable need for the power to be modeling produced system by the project; appropriately 2) examined the the PSC's effects computer of the project; 3) the PSC did not sufficiently consider the necessity for associated power transmission facilities "integral and necessary to the planned generation plant"; 4) the PSC did not adhere to Wisconsin's Energy Priority Law; 5) the PSC improperly authorized WEC to construct certain "common systems" that would be used both potentially, approved the applicable by by the future CPCN DNR approved generation generation equipment; before the applicant permits, in equipment and had 6) and, the PSC received all violation of Wis. Stat. § 196.491(3)(e). ¶28 combined Third, the court held that the EIS, prepared by the efforts of the PSC and the requirements in Wis. Stat. § 1.11(2)(c). 14 DNR, satisfied the No. ¶29 2004AP3179 Fourth, the court held that the PSC's finding that "the proposed facility will not have a material adverse impact on competition in the relevant wholesale electric service market," see Wis. Stat. § 196.491(3)(d)7., was not erroneous. ¶30 Fifth, the court held that the PSC had no authority to modify the mitigation agreement between WEC and Oak Creek; the PSC's authority, the court stated, is limited to simply approving or rejecting such agreements. ¶31 Various parties petitioned for review of the circuit court's decision, and we granted WEC and PSC's motion to bypass the court of appeals. We summarize arguments on appeal as follows. PSC's initial complete. determination Clean the parties' Clean Wisconsin challenges the that WEC's and Wisconsin respective CPCN Calpine application also challenges to the PSC's issuance of the CPCN. raise was various Finally, the City of Oak Creek challenges the PSC's decision to reduce mitigation payments that WEC agreed to pay in exchange for Oak Creek agreeing to host the proposed plants. ¶32 After considering these arguments, we hold as follows. First, we uphold the PSC's determination that WEC's application was "complete." In reaching this conclusion, we hold: PSC's determination of that the PSC completeness reasonably is concluded judicially that WEC's that the reviewable; application contained two distinct site alternatives; that WEC's application contained all necessary information relating to DNR permits; and that WEC's application contained all relating to transmission line agreements. 15 necessary information No. ¶33 2004AP3179 Second, we conclude that the PSC's approval of WEC's CPCN application was not contrary to law or unreasonable. When it approves an application for a power-generating facility like the one WEC proposed, the PSC must interpret, harmonize, and apply the provisions (Wis. Stat. § 1.12(4)),21 of Wisconsin's the (Wis. Stat. § 196.491(3)(d)),22 and Policy Act Energy Plant the (Wis. Stat. § 1.11).23 Priority Siting Wisconsin Applying Law Law Environmental a deferential standard of review, we find that the PSC reasonably performed all these tasks in issuing the CPCN. We also conclude that the PSC did not exceed its authority in conditionally issuing the CPCN. ¶34 Third, we conclude the PSC did not exceed its authority or act irrationally when it reduced the mitigation payments from WEC to the City of Oak Creek, as we conclude this 21 The Energy Priorities Law requires agencies to consider energy sources in a particular order, to the extent costeffective and technically feasible. Wis. Stat. § 1.12(4). Wisconsin Stat. § 196.025 provides that § 1.12(4) applies to the PSC. 22 The Plant Siting Law requires the PSC to make a variety of findings concerning the impact of the proposed facility, including that the project satisfies the needs of the public for an "adequate supply of electric energy," that the project will have no undue adverse environmental impacts, and that the project will not have a negative effect on wholesale competition. 23 The Wisconsin Environmental Policy Act requires the PSC to prepare an Environmental Impact Statement (EIS) to aid in evaluating the environmental impacts of the proposed facility. 16 No. decision was a proper exercise of the PSC's 2004AP3179 ratemaking authority. III. STANDARD OF REVIEW ¶35 This is a Wis. Stat. § 227.52. review The of issue an agency this decision court must under decide is whether the PSC erroneously approved WEC's application for a CPCN. It is not the function of this court to determine this state's energy policy. Nor is it this court's place to decide whether the construction of the power plants at issue in this case is in the public interest. These are legislative determinations that the legislature has assigned to the PSC. See Wis. Stat. § 196.491(3)(d)3. Whether a given decision is in the public interest "is a matter of public policy and statecraft and not in any sense a judicial question." Westring v. James, 71 Wis. 2d 462, 473, 238 N.W.2d 695 (1976). This court "cannot substitute its judgment for that of an administrative agency determining a legislative matter within its province." City of Beloit v. Town of Beloit, 37 Wis. 2d 637, 647, 155 N.W.2d 633 (1968). ¶36 This is the philosophy with which we approach review of the PSC's decision under Wis. Stat. § 227.52. our The scope of our review is limited, pursuant to Wis. Stat. § 227.57, to whether the PSC erroneously approved WEC's CPCN application. As such, we will not substitute our judgment for that of the PSC. court, Although we must ultimately affirm or reverse the circuit when an agency's action is challenged on appeal, we review the decision of the agency and not that of the circuit 17 No. court. 2004AP3179 Responsible Use of Rural and Agricultural Land (RURAL) v. PSC, 2000 WI 129, ¶20, 239 Wis. 2d 660, 619 N.W.2d 888. ¶37 The parties dispute whether the PSC properly interpreted and applied a number of statutes relating to the issuance of a CPCN. three levels of This court has historically applied one of deference application of statutes: to an agency's interpretation and great weight deference, due weight deference, or no deference (de novo review). Hutson v. Wis. Pers. Comm'n, 2003 WI 97, ¶31, 263 Wis. 2d 612, 665 N.W.2d 212. ¶38 The level of deference accorded to such decisions depends on a number of factors including "the extent to which the 'administrative agency's experience, technical competence, and specialized knowledge aid the agency in its interpretation and application of the statute[]'" and "'the comparative institutional capabilities and qualifications of the court and the administrative agency[.]'" Id. (quoting Kelley Co. v. Marquardt, 172 Wis. 2d 234, 244, 493 N.W.2d 68 (1992) and State ex rel. Parker v. Sullivan, 184 Wis. 2d 668, 699, 517 N.W.2d 449 (1994)). ¶39 Great weight deference, the highest level deference, is appropriate where: "'(1) the agency was charged by the legislature with the duty of administering the statute; (2)[] the interpretation of the statute is one of long-standing; (3)[] the agency employed its expertise or specialized knowledge in forming the interpretation; and (4)[] the agency's interpretation will provide uniformity and consistency in the application of the statute.'" 18 of No. 2004AP3179 Id., ¶32 (quoting UFE, Inc. v. LIRC, 201 Wis. 2d 274, 284, 548 N.W.2d 57 (1996)(in turn quoting Harnischfeger Corp. v. LIRC, 196 Wis. 2d 650, 660, 539 N.W.2d 98 (1995))). ¶40 However, deference is presenting the not the appeal . . . ." whether the precise test agency facts for has raised great weight "decided by [the a case present] Va. Sur. Co. v. LIRC, 2002 WI App 227, ¶13, 258 Wis. 2d 665, 654 whether agency the appropriate N.W.2d 306. "'has Rather, experience the in particular statutory scheme'" at issue. correct test interpreting is [the] Honthaners Rests., Inc. v. LIRC, 2000 WI App 273, ¶12, 240 Wis. 2d 234, 621 N.W.2d 660 (quoting Town of Russell Volunteer Fire Dep't. v. LIRC, 223 Wis. 2d 723, 733-34, 589 N.W.2d 445 (Ct. App. 1998)). ¶41 Additionally, interpretation when we the should "'legal defer question to is an agency intertwined with factual determinations or with value or policy determinations'" and the agency involved "'has primary determination of fact and policy.'" ¶32 (quoting Sauk County v. WERC, responsibility for Hutson, 263 Wis. 2d 612, 165 Wis. 2d 406, 413, 477 N.W.2d 267 (1991)(in turn quoting West Bend Educ. Ass'n v. WERC, 121 Wis. 2d 1, 12, 357 N.W.2d 534 (1984))). Under the great weight standard, we will uphold an agency's interpretation of a statute so long as it is reasonable, even if a more reasonable interpretation exists. ¶42 Id. This court applies an intermediate level of deference, "known as 'due weight' or 'great bearing[,]'" id., ¶33 (quoting Kelley Co., 172 Wis. 2d at 244), where "'the agency has some 19 No. 2004AP3179 experience in an area, but has not developed the expertise which necessarily places it in a better position to make judgments regarding the interpretation of the statute than a court.'" (quoting UFE, 201 Wis. 2d at 286). Id. This intermediate standard of review is based on recognition that the legislature entrusted application of the particular statute to the agency and not on the agency's expertise. Id. Under the due weight deference standard, we will uphold an agency's interpretation of a statute so long as it is reasonable and the court finds that no other more reasonable interpretation is available. ¶43 Finally, de novo review, under Id. which an agency's interpretation of a statute is "given no weight at all," id., ¶34, is applied "when the issue is 'clearly one of first impression' for the agency or 'when an agency's position on an issue has been so inconsistent [such that it] provide[s] no real guidance.'" Id. (quoting UFE, 201 Wis. 2d at 285). However, regardless of the level of deference given, this court "will not uphold an agency's interpretation of a statute if it is contrary to the clear meaning of a statute." Bosco v. LIRC, 2004 WI 77, ¶19, 272 Wis. 2d 586, 681 N.W.2d 157. ¶44 As this review implicates the PSC's interpretation and application of several statutes, we will discuss the appropriate standard of deference in our discussion of each respective statutory provision. ¶45 This review also implicates the PSC's interpretation and application of its own administrative rules governing the issuance of CPCNs. "This court has frequently held that great 20 No. weight should be given to administrative the 2004AP3179 agency's interpretation and application of its own rules, unless plainly erroneous or inconsistent with the regulation so interpreted. This is especially so in an area calling for special expertise." Vonasek v. Hirsch & Stevens, Inc., N.W.2d 815 (1974)(citation omitted). 65 Wis. 2d 1, 7, 221 See also Trott v. DHFS, 2001 WI App 68, ¶4, 242 Wis. 2d 397, 626 N.W.2d 48 (accord). ¶46 Finally, this review findings made by the PSC. implicates various factual Pursuant to Wis. Stat. § 227.57(6), a court will not disturb an agency's factual findings unless they are not supported by "substantial evidence." An agency's findings are supported by substantial evidence if a reasonable person could arrive at the same conclusion as the agency, taking into account all the evidence in the record. RURAL, 239 Wis. 2d 660, ¶20. IV. ¶47 case ANALYSIS As noted, the challenges to the PSC's order in this fall into three general categories: 1) the PSC's determination that WEC's application was complete; 2) the PSC's decision to grant the CPCN; and 3) the PSC's decision to reduce the mitigation payments to the City of Oak Creek. A. Completeness of CPCN Application ¶48 As discussed supra, the initial step process is filing an application with the PSC: in the form and containing the in the CPCN "An application information required by commission rules for such certificate shall be filed with the commission not less than 6 months prior to the commencement of 21 No. 2004AP3179 construction of a facility." Wis. Stat. § 196.491(3)(a)1. turn, 111.53 Wis. contents Admin. Code of facilities. CPCN § PSC applications for sets large forth the electric In required generating Of particular importance to the present case, the regulation requires, in part: (e) At least two proposed sites for the proposed facility, including a description of the siting process and a list of the factors considered in choosing the alternatives. (f) Site related information for each proposed power plant site, including all of the following: 1. The regulatory approvals required construction and operation of the facility. for 2. The construction schedule and timeline, showing construction activities and permitting expectations from the beginning of construction to the in service date. . . . . 4. Any required transmission line construction, agreements for use of the transmission system to deliver plant power, transmission losses, and effects on system reliability. If a certificate of authority under s. 196.49, Stats., is required to construct the transmission line, the location of termini, length in miles, and voltage for each transmission line. 5. Other auxiliary facilities, storage and water storage. including fuel . . . . Wis. Admin. Code § PSC 111.53(1)(e)-(f). ¶49 determine After an application is filed, the PSC has 30 days to whether the application 22 is "complete." No. Wis. Stat. § 196.491(3)(a)2.24 application provide is reasons incomplete, for its If it the must PSC notify determination. 2004AP3179 determines applicant an Id. an and However, an applicant may refile an application previously determined to be incomplete, and there is no application may be refiled. limit Id. as to how many times an If the PSC fails to make a completeness determination within 30 days after the application is filed, the application is rendered complete by operation of law. Id. PSC must Once an application is determined to be complete, the hold a public hearing on the application. Wis. Stat. § 196.491(3)(b). Following the public hearing, the PSC the must statutory determine whether requirements proposed set facility meets forth the in Wis. Stat. § 196.491(3)(d)2.-7. before the CPCN may be issued. Wis. Stat. § 196.491(3)(d). 24 Wisconsin Stat. § 196.491(3)(a)2. provides: The commission shall determine whether an application filed under subd. 1. is complete and, no later than 30 days after the application is filed, notify the applicant about the determination. If the commission determines that the application is incomplete, the notice shall state the reason for the determination. An applicant may supplement and refile an application that the commission has determined to be incomplete. There is no limit on the number of times that an applicant may refile an application under this subdivision. If the commission fails to determine whether an application is complete within 30 days after the application is filed, the application shall be considered to be complete. 23 No. ¶50 As noted supra, after determining 2004AP3179 that WEC's application was incomplete on a number of occasions, the PSC issued a letter on November 15, 2002, advising WEC that the PSC had determined its application to be complete in light of its latest supplement. The letter stated: The Commission has reviewed [WEC's] supplement to the application to construct the facilities described above as required by Wis. Stat. § 196.491(3)(a)2 and Wis. Admin. Code § PSC 111.53. The DNR also reviewed appropriate application materials for completeness purposes. Based on this review, the Commission determines that the application is complete . . . . However, the letter also indicated that the PSC expected WEC to provide further environmental information concerning items that were identified as being deficient in the PSC's previous review. ¶51 Clean that WEC's review the Wisconsin application PSC's challenged was interim complete the PSC's by completeness filing determination a petition determination on to the ground that the WEC application did not meet the "alternative sites" requirement of Wis. Admin. Code § PSC 111.53(1)(e). Specifically, Clean Wisconsin argued that WEC's application was not complete because WEC's alternative sites for the proposed plants were all located on the grounds of WEC's existing Oak Creek Generating Plant. Clean Wisconsin argued that in order to comply with the regulation, WEC's application must contain at least one site that is at a location other than the existing Oak Creek facility. ¶52 reopen In an order dated April 18, 2003, the PSC declined to its determination that 24 WEC's CPCN application was No. complete. 2004AP3179 Following the PSC's final decision and order issuing the CPCN to WEC, Clean Wisconsin renewed its argument concerning the PSC's completeness determination in the circuit court. In addition to arguing that the application was incomplete because it failed to satisfy the "alternative site" requirement, Clean Wisconsin asserted that the application was incomplete because it did not contain required regulatory approvals under Wis. Admin. Code § PSC 111.53(1)(f)1. and did not contain sufficient information concerning transmission line facilities as required by Wis. Admin. Code § PSC 111.53(1)(f)4. ¶53 The circuit court agreed, concluding that WEC's application did not meet the "alternative site" requirement in § PSC 111.53(1)(e) because all of the listed alternatives were different configurations of the same plant located on the same 1000 acre parcel of land. The circuit court also ruled that it was error for the PSC to deem the application complete because § PSC 111.53(1)(f)1. requires a CPCN application to contain all regulatory permits that are necessary before the facility can be built and WEC's application approvals from the DNR. did not contain the required Finally, the circuit court ruled that the PSC erred in determining that the application was complete because § PSC 111.53(1)(f)4. requires a CPCN application to contain agreements for transmission lines that will be utilized, and WEC's application did not contain any such agreements. ¶54 Clean Wisconsin again argues before this court that it was legal error for the PSC to determine that WEC's application was complete. It again argues that WEC's application failed to 25 No. 2004AP3179 satisfy the "alternative site" requirement and that it failed to contain the necessary transmission line agreements. Further, it contends that the PSC erred in determining that the application was complete because its completeness letter indicated that the application was incomplete. However, Clean Wisconsin does not argue before this court that WEC was required to include all necessary regulatory permits in its CPCN application. ¶55 The PSC argues that it correctly determined that WEC's application met the "alternative site" requirement and that its conclusion that the requirement was satisfied is entitled to great weight deference. The PSC further asserts that the application contained all the necessary information pertaining to regulatory permits and transmission line agreements and that requiring a CPCN application to contain the actual regulatory permits required for construction of the facility and the actual transmission line agreements would be inconsistent with its own rules and related statutes. Additionally, the PSC argues that its request for additional information in its November 15, 2002, completeness letter did not undermine its ultimate conclusion that the application was complete. same arguments Cooperative as the PSC. (Dairyland),25 in WEC makes substantially the Furthermore, addition to Dairyland making the Power same arguments as the PSC and WEC, asserts that § 196.491 gives the PSC the power to conclusively 25 determine whether a CPCN Dairyland is a not-for-profit generation and transmission electric cooperative that is an interested party in this litigation. 26 No. 2004AP3179 application is complete and that the PSC's determination that the CPCN application was complete is not reviewable. ¶56 We begin by addressing Dairyland's argument that the PSC's determination that a CPCN application is complete is not reviewable. that a According to Dairyland, a determination by the PSC CPCN § 196.491 application does determining not that is require an complete is unreviewable the to provide PSC application is complete because reasons and deems for an application complete as a matter of law if the PSC takes no action. Further, Dairyland argues that § 196.491(3)(d), governing the final issuance of a CPCN, makes no reference to the completeness of a CPCN application as a prerequisite to the issuance of the CPCN. Finally, Dairyland argues that § 196.491(3)(a)1. allows the PSC to determine what information is necessary for an application to be complete and provides no standards for reviewing the PSC's completeness determination. ¶57 We reject Dairyland's argument for three reasons. First, as noted by Clean Wisconsin, Wis. Stat. § 196.491(3)(j) explicitly provides that "[a]ny person whose substantial rights may be adversely convenience and affected . . . by necessity may a certificate petition for of judicial public review, under ch. 227, of any decision of the commission regarding the certificate." the CPCN (Emphasis added.) application and the As discussed, the filing of PSC's determination that the application is complete are the first two steps in the process leading up to the ultimate issuance of the CPCN. application cannot move forward 27 to the public As the CPCN hearing stage No. 2004AP3179 without the PSC first determining that it is complete, the PSC's determination that an application is complete clearly qualifies as a "decision of the commission regarding the certificate." Wis. Stat. § 196.491(3)(j). ¶58 Second, although the PSC's decision that a CPCN application is complete is not itself a final decision, case law establishes that it is nonetheless subject to judicial review. In Friends of the Earth, 78 Wis. 2d at 410, this court held that a PSC interim order regarding ratemaking was reviewable in connection with the final order in the case, even though the interim order was not immediately subject to judicial review. See also Cities & Villages of Algoma v. PSC, 91 Wis. 2d 252, 265, 283 N.W.2d 261 (Ct. App. 1978)("[J]udicial review of the PSC's action on the interim order may be had upon judicial review of the final order so as to protect the interests of the ratepayer."). applicable We here, see no reason particularly in why this light of reasoning the is not aforementioned language in Wis. Stat. § 196.491(3)(j). ¶59 Finally, we relevant statutes provide completeness reject no determination Dairyland's standards may be assertion by which that the reviewed. the PSC's Section 196.491(3)(a)1. requires that every CPCN application be in the form required by the PSC and contain "the information required by commission rules for such certificate[.]" In turn, Wis. Admin. Code § PSC 111.53(1) sets forth the information that a CPCN application must contain before complete. 28 it is considered to be No. ¶60 2004AP3179 It is this rule that provides the standards by which a court reviews a PSC determination that a CPCN application is complete. Thus, while § 196.491(3)(a)1. does not itself provide such standards, it specifically states that an application must contain the information required by PSC rules. promulgated a list application must of items contain in before § PSC it is The PSC has 111.53(1) considered that an complete; therefore, the PSC is not free to ignore those requirements in making its completeness determination. ¶61 the Having determined completeness of a judicial review, appropriate when we CPCN now frequently held administrative that PSC's application a is indeed level what PSC decision of determination regarding subject to deference is that a CPCN As noted previously, "[t]his court has great agency's the address reviewing application is complete. that weight should interpretation and be given application to the of its own rules, unless plainly erroneous or inconsistent with the regulation so interpreted. calling for special (citation omitted). This is especially so in an area expertise." Vonasek, 65 Wis. 2d at 7 No one disputes that the PSC has special expertise in determining whether a CPCN application is complete. ¶62 complete The PSC's "represents determination its that conclusion a that CPCN application is the requirements of [Wis. Admin. Code § PSC 111.53(1)] have been met on the facts before it with respect to the application under consideration. It is thus an application or interpretation of law . . . entitled to great weight deference from a reviewing 29 No. court." 2004AP3179 Citizens' Util. Bd. v. PSC, 211 Wis. 2d 537, 552, 565 N.W.2d 554 (Ct. App. 1997). ¶63 Clean determination contain Wisconsin on the information 111.53(1) and requirements. that challenges ground that required the by PSC the the PSC's completeness application various failed provisions to § PSC interpreted erroneously of these Whether the PSC's interpretations of the various provisions of § PSC 111.53(1) at issue are entitled to great weight deference will be discussed below. As we conclude that the PSC's interpretation of each relevant provision is given great weight deference, its application of those provisions and ultimate conclusion that the application was complete will be upheld if it is reasonable. Harnischfeger, 196 Wis. 2d at 661; Citizens' Util. Bd., 211 Wis. 2d at 552. As we conclude that great weight deference is appropriate, it is Clean Wisconsin's burden to demonstrate that there is no rational basis for the PSC's completeness determination. 1. Id. at 553. Alternative Site Requirement ¶64 Wisconsin Admin. Code § PSC 111.53(1)(e) requires a CPCN application for a large electric generating facility to contain information concerning "[a]t least two proposed sites for the proposed facility, including a description of the siting process and a list of the factors considered in choosing the alternatives." Clean Wisconsin argues that WEC's application failed to satisfy this requirement because it contained only alternative configurations of the proposed plants on the same site rather than two distinct alternate proposed sites. 30 No. ¶65 at the 2004AP3179 Clean Wisconsin argues that alternative configurations same site described in Wisconsin also whether Wis. an are allowed Admin. argues only under the circumstances Code § PSC 111.53(2)(b). the PSC's test that application proposes for Clean determining sufficiently different alternatives is contrary to the plain meaning of Wis. Admin. Code § PSC 111.53(1)(e) and that even if the PSC's test is appropriate, WEC's application clearly failed to meet that test. ¶66 No one disputes that § PSC 111.53(1)(e) requires an applicant to submit information concerning proposed alternative sites. The distinct must two sites." The text question. the PSC's complete, threshold question proposals of the be is really to qualify regulation does how as not different or "alternative answer this In rejecting Clean Wisconsin's initial challenge to determination the PSC that explained WEC's how CPCN it application evaluates "alternatives": The Commission's standard for reviewing site alternatives in a CPCN application is based upon both the rule of reason and the principle that alternatives must serve the public purpose underlying the issuance of a CPCN. The Commission first reviews a CPCN application to determine that each proposed site is "reasonable," i.e. is a feasible location for the project that would not directly conflict with any of the criteria for granting a CPCN expressed in Wis. Stat. § 196.491(3). In addition, the Commission's practice is to require that the sites are sufficiently distinct to offer different packages of costs and benefits, and thus present the Commission with a choice. 31 was site No. 2004AP3179 The fact that alternative sites may be geographically close to each other does not render them unreasonable. The Commission has accepted CPCN applications for several projects where the alternative sites were close together or even adjacent to each other. ¶67 We cannot conclude that the PSC's interpretation of its own rule in this instance is inconsistent with the text of the rule. As noted, the rule itself provides no indication as to when different proposals are sufficiently distinct so as to constitute "alternative sites." The pertinent dictionary definition of "alternative" is "[a]llowing or necessitating a choice between Dictionary two of Additionally, the "site" or more things." English is The Language defined as American 55 (3d "[t]he ed. place Heritage 1992). where a structure or group of structures was, is, or is to be located." Id. at 1688. Thus, the "alternative site" provision requires a CPCN applicant to provide information regarding locations where the proposed power plants are to be located sufficient to present the PSC with a choice. ¶68 The PSC's interpretation of its rule is not inconsistent with these definitions, as it requires "that the sites are sufficiently distinct to offer different packages of costs and choice." benefits, While and Clean thus present Wisconsin the argues Commission that WEC's with a proposal contained only different configurations on the same site, this argument is merely a matter of semantics and begs the ultimate question of how distinct the locations of the proposed plants must be to qualify as "alternative sites." 32 No. ¶69 basis 2004AP3179 The PSC's interpretation differentiates "sites" on the of whether they offer sufficiently distinct costs and benefits so as to allow the PSC to make an actual choice between the two. This interpretation comports with the statutory scheme governing the issuance of CPCNs. overall One of the criteria for granting a CPCN is that the proposed facility "is in the public locations . . . ." interest considering . . . alternative Wis. Stat. § 196.491(3)(d)3. By requiring that an applicant present information concerning "sites [that] are sufficiently distinct to offer different packages of cost and benefits, and thus present the commission with a choice[,]" the PSC ensures that it is able to evaluate whether the proposed facility "is in the public considering . . . alternative interest locations . . . ." Wis. Stat. § 196.491(3)(d)3. ¶70 As the PSC's interpretation of its own rule is not contrary to the text of the rule, we accord it great weight deference. Thus, the PSC's determination that a CPCN application has met the "alternative sites" requirement will not be disturbed unless it is without a rational basis. ¶71 proposed WEC's CPCN sites that application were originally described in the contained PSC's final three order approving the CPCN: The North Site is in the City of Oak Creek in Milwaukee County at the east end of Elm Road, north of the existing OCPP [Oak Creek Power Plant] units. The South Site would place the generating units on a portion of the OCPP property south of existing Units 5-8, in the town of Caledonia in Racine County. The 33 No. 2004AP3179 South Site Exp is a variation on the South Site, placing the SCPC units in the same location but with the IGCC facility on a federal/state-owned shooting range (land that WEC would need to purchase). ¶72 In its decision rejecting Clean Wisconsin's original challenge to its completeness determination, the PSC applied its interpretation of § PSC 111.53(1)(e) to WEC's application and reasoned: At least two of the three sites WEC has included in its CPCN application meet the Commission's standards. The petitioners allege that 11 or more different characteristics of these sites are functionally identical, but this situation is difficult to avoid when searching for locations to install a new coal-fired plant where generation already exists. The similarities highlight the fact that each site alternative is relying on existing infrastructure at a brownfield generating site, and the Commission has encouraged the use of such locations because they tend to make electric generation projects less expensive and less environmentally damaging. The Commission also noted two significant distinctions among the sites WEC is proposing. The primary site is located in the city of Oak Creek, Milwaukee County, while the alternative sites are found in the town of Caledonia, Racine County. In addition, construction at the primary site would require WEC to cut and fill 10 million cubic yards of earth, while at Alternative Site A it would only need to move 7.3 million cubic yards. The site alternatives WEC is proposing are "different enough" to meet the Commission's requirements in Wis. Admin. Code § PSC 111.53(1)(e). ¶73 Clean Wisconsin asserts that there is no difference between the "alternatives" WEC proposed because their cost is the same and there are no distinct benefits that distinguish the alternatives from one another. Clean Wisconsin also notes that the information WEC provided as to its proposed alternatives was 34 No. sparse in comparison to the information 2004AP3179 provided for the primary, preferred location. ¶74 The PSC noted that while there were many similarities between the proposed sites, this was unavoidable because of the type of facility that was being proposed and because the PSC prefers applicants to choose sites that are located on brownfields, so as to minimize any adverse environmental impacts of the facility.26 proposed The PSC also stated that the proposed sites were located in different cities and counties. While Clean Wisconsin argues these facts have no relevance, the record indicates different that physical reasonably the alternate attributes determine that from the proposed which proposals locations the PSC offered had could competing packages of benefits and costs. ¶75 For instance, the proposed South Site would require a different coal conveyor system and possible adaptation of onsite haul roads. would require wallboard In addition, the South Site and South Site-Exp the plant. relocation The South of a planned Site-Exp commercially-owned would require WEC to purchase 70 acres of land from the federal government that is currently used as a shooting range. The South Site-Exp is located closer to Lake Michigan than the other proposed sites, and it would therefore allow equipment requiring cooling to be 26 Brownfields are abandoned industrial sites, some of which have actual or perceived environmental contamination. Their use is encouraged so as to reduce building on greenfields (pristine, undisturbed land). See U.S. Envtl. Prot. Agency, Brownfields Fact Sheet, EPA Publication No. 500-F-00-241 (Oct. 2000). 35 No. located closer to the lake. 2004AP3179 Additionally, the South Side-Exp would require less bluff removal than the other two sites and would allow certain facilities to be more accessible. all three sites would require a significant amount Although of earth removal, there is a difference of 2.7 million cubic yards of earth that would need to be removed among some of the alternate sites. ¶76 Furthermore, the fact that the proposed alternatives were located in different communities is not inconsequential. It is reasonable to assume that a project the size of the one being proposed may garner different levels of public support depending upon the community in which it is located. It is reasonable to assume that an entity proposing to build a project the size of the one at issue here might have varying degrees of difficulty obtaining necessary permits depending upon in which community the project is located and that different communities may desire different levels of mitigation payments.27 ¶77 In sum, we cannot say that the PSC's ultimate conclusion that WEC's CPCN application satisfied the "alternate site" requirement was without a rational basis, particularly in light of the environmental PSC's impacts stated of goal the of proposed 27 reducing project. the adverse While an The parties argue about whether the environmental impacts of the various proposals, as stated in the EIS, sufficiently distinguish the sites proposed by WEC. Because this environmental impact information was not before the PSC when it made its completeness determination, we do not consider it in our analysis. 36 No. opposite conclusion on the facts before us might 2004AP3179 be equally reasonable or even more reasonable, the PSC's determination must stand under our deferential standard of review.28 2. Regulatory Permits ¶78 In addition to requiring information about alternative sites for the proposed facility, § PSC 111.53(1)(f) requires an applicant to submit "[s]ite related information proposed power plant site, including . . . 1. approvals required facility." various for construction and for each The regulatory operation of the WEC attached to its CPCN application a table listing potential permits construction of ERGS. and approvals required for The table included 17 different permits from ten different agencies, described the permits required, and set forth the applicable governing statutes. ¶79 The incomplete requires circuit because an court it applicant ruled that concluded that to file the WEC's application § PSC regulatory was 111.53(1)(f)1. permits and approvals themselves, not merely list and describe the permits needed before construction begins. Specifically, the circuit court concluded that WEC's application was incomplete because it failed to include necessary DNR permits. This issue was not raised before the PSC, and none of the parties supporting the 28 While Clean Wisconsin takes issue with the amount of information WEC provided relative to each proposed site, it is not the function of this court to dictate the quantity of information that must be filed with the PSC. All that is required is for the applicant to file sufficient material so as to allow the PSC to make a rational completeness determination. 37 No. 2004AP3179 circuit court's decision defend its ruling on this issue before this court. Although we review the PSC's decision and not that of the circuit court and no party adverse to the PSC's decision has pursued this issue on appeal, we nonetheless address this issue because WEC, the PSC, and Dairyland devoted significant portions of their briefs to this issue, the issue is one of great public affect our importance, discussion and of an analysis whether WEC of was this issue required will to file transmission line agreements with its CPCN application. ¶80 The PSC has interpreted § PSC 111.53(1)(f)1. as requiring a CPCN applicant to submit only information concerning the required permits and not the actual permits. Wisconsin Admin. Code § PSC 111.53(1)(f) requires an applicant to submit "[s]ite-related information for each proposed power plant site, including . . . . [t]he regulatory approvals construction and operation of the facility." required for (Emphasis added.) We conclude that the PSC's interpretation of this regulation is not inconsistent with the text of the regulation or plainly erroneous for several reasons. ¶81 First, if one considers the regulatory permits themselves to be "information," and that the regulation requires the actual permits to be filed, other portions of the regulation will be rendered absurd. applicant must auxiliary facilities," "natural resources 111.53(1)(f)6., supply and at Among under Wis. each the § PSC Admin. "information" 111.53(1)(f) Code site," "[a]esthetics[,]" 38 other § PSC Wis. Wis. is an "[o]ther 111.53(1)(f)5., Admin. Admin. Code § PSC Code § PSC No. 111.53(1)(f)8. 2004AP3179 Wis. Citizens Concerned for Cranes and Doves v. DNR, 2004 WI 40, ¶6, 270 Wis. 2d 318, 677 N.W.2d 612 (statutes and regulations appear). must be read in the context in which they If all the items listed in § PSC 111.53(1)(f) were themselves required to applicant would "auxiliary facilities," application. be Such be submitted required a and to as file "natural "aesthetics" reading of the "information," an resources," themselves regulation with is the absurd. Trott, 242 Wis. 2d 397, ¶14 (regulations should be interpreted to avoid unreasonable or absurd results). ¶82 Second, 111.53(1)(f)1. is 111.53(1)(f)2., construction activities and the PSC's consistent which interpretation with requires schedule and permitting Wis. the expectations construction to the in-service date." § PSC Code § PSC file "[t]he Admin. applicant timeline, of to showing from the construction beginning (Emphasis added.) of If the permits themselves need to be filed under § PSC 111.53(1)(f)1., then the language concerning the "permitting expectations" of the applicant in § PSC 111.53(1)(f)2. is rendered superfluous or is in conflict with § PSC 111.53(1)(f)1. Wis. 2d 539, 546, 312 N.W.2d 483 Basinas v. State, 104 (1981)(regulations should be interpreted to avoid conflict among different provisions and so as to avoid rendering provisions superfluous). ¶83 Additionally, 111.53(1)(f)1. is the consistent issuance of a CPCN. PSC's with interpretation the statutes of § PSC governing the Bosco, 272 Wis. 2d 586, ¶19 (valid agency interpretation of its regulations cannot be contrary to statute 39 No. governing agency). § PSC Specifically, the PSC's interpretation of 111.53(1)(f)1. requiring regulatory permits 2004AP3179 to be only information filed comports with the about statute setting forth the process and timeline for obtaining regulatory permits from 111.53(1)(f)1. the that DNR, whereas requires the an interpretation actual permits to of § PSC be filed before a CPCN application is complete would conflict with the statute.29 29 Wisconsin Stat. § 196.491(3)(a)3. provides: a. At least 60 days before a person files an application under subd. 1., the person shall provide the department with an engineering plan showing the location of the facility, a description of the facility, including the major components of the facility that have a significant air, water or solid waste pollution potential, and a description of the anticipated effects of the facility on air and water quality. Within 30 days after a person provides an engineering plan, the department shall provide the person with a listing of each department permit or approval which, on the basis of the information contained in the engineering plan, appears to be required for the construction or operation of the facility. b. Within 20 days after the department provides a listing specified in subd. 3.a. to a person, the person shall apply for the permits and approvals identified in the listing. The department shall determine whether an application under this subd. 3.b. is complete and, no later than 30 days after the application is filed, notify the applicant about the determination. If the department determines that the application is incomplete, the notice shall state the reason for the determination. An applicant may supplement and refile an application that the department has determined to be incomplete. There is no limit on the number of times that an applicant may refile an application under this subd. 3.b. If the 40 No. ¶84 Wisconsin Stat. § 196.491(3), the governing 2004AP3179 procedure for issuing a CPCN, also describes the process and timeline for obtaining necessary regulatory permits from the DNR. before a person files a CPCN application, he Sixty days must file an engineering plan with the DNR describing the proposed facility. Wis. Stat. § 196.491(3)(a)3.a. Thirty days after the engineering plan is filed (30 days prior to the filing of the CPCN application), the DNR must provide the applicant with a list of the necessary permits. Wis. Stat. § 196.491(3)(a)3.a. The applicant then has 20 days from the time the DNR provides a list of the necessary permits (up until 10 days prior to filing the CPCN application) to apply for the permits. Wis. Stat. § 196.491(3)(a)3.b. ¶85 The DNR must determine whether the permit application is complete within 30 days after the person applies for the permits (20 days after the CPCN application is filed and 10 days before the PSC must determine Wis. Stat. § 196.491(3)(a)3.b. if If the the CPCN permit is complete) application is incomplete, the applicant may supplement the application, again triggering the 30-day time period. department fails to determine whether an application is complete within 30 days after the application is filed, the application shall be considered to be complete. The department shall complete action on an application under this subd. 3.b. for any permit or approval that is required prior to construction of a facility within 120 days after the date on which the application is determined or considered to be complete. 41 No. Wis. Stat. § 196.491(3)(a)3.b. 2004AP3179 After the DNR permit application is determined to be complete, the DNR then has another 120 days (140 days after the CPCN application is filed and 110 days after the PSC must determine whether the CPCN application is complete) to determine whether to issue the permits. Wis. Stat. § 196.491(3)(a)3.b. ¶86 Therefore, interpreting § PSC 111.53(1)(f)1. to require a CPCN applicant to file the actual regulatory approvals before the CPCN application can be deemed to be complete would clearly conflict with Wis. Stat. § 196.491(3)(a)3.a.-b. the statute, the earliest the DNR can issue the Under required regulatory permits is 140 days after the CPCN application is filed and 110 completeness days after the PSC determination. is Thus, required the to statute make its expressly contemplates that a CPCN applicant will not have the required DNR permits in hand at the time the PSC must render its completeness determination. ¶87 Furthermore, § PSC 111.53(1)(f) requires site-related information for "each proposed power plant site." sufficient for a CPCN applicant to merely file If it is not information concerning the required permits, then the applicant would need to obtain a set of permits for each "proposed power plant site." This, in turn, would require, at a minimum, two sets of permit applications to be filed with the DNR. In addition, the DNR would be required to issue permits for at least one site that will not ultimately be the site at which the power plant is built. Such a result would be absurd and in conflict with the 42 No. purpose of § 196.491, which is certificate application process. ¶88 not to provide a 2004AP3179 streamlined RURAL, 239 Wis. 2d 660, ¶31. As the PSC's interpretation of § PSC 111.53(1)(f)1. is inconsistent with the text of the regulation and is consistent with the statutes governing the issuance of the CPCN and regulatory approvals, we accord it great weight deference. WEC filed a detailed table listing: 1) the permits that would be required for ERGS; 2) the activity for which each permit was needed; 3) the agency responsible for issuing each permit; and 4) the statute or code provision pursuant to which each permit would be issued. determination required that under We the § PSC cannot conclude application that contained 111.53(1)(f)1. was the without the PSC's information a rational basis. 3. Transmission Line Agreements ¶89 person Wisconsin filing information a Admin. CPCN for including . . . . § PSC application each 4. Code to proposed Any 111.53(1)(f) provide power required requires a "[s]ite-related plant transmission site, line construction, agreements for use of the transmission system to deliver plant power, transmission losses, and effects on system reliability." Although this issue was not raised before the PSC, it was raised in the circuit court, and the circuit court determined that WEC's CPCN application was incomplete because it failed to include the actual transmission line agreements. Clean Wisconsin renews its argument concerning the transmission 43 No. line agreements before this court. 2004AP3179 There is no dispute that WEC's application did not contain such agreements. ¶90 For the reasons discussed supra, in regard to the need to obtain regulatory permits, the PSC's interpretation of § PSC 111.53(1)(f), as requiring listed is entitled items only to information great concerning weight deference. the As previously discussed, actually requiring an applicant to file the items listed in § PSC 111.53(1)(f) would be absurd. ¶91 This is 111.53(1)(f)4. particularly If, as Clean true with regard Wisconsin to contends, § PSC a CPCN applicant is required to obtain and file the actual "agreements for use of the transmission system to deliver plant power," then the applicant transmission must line 111.53(1)(f)4. Under PSC's information about necessarily construction[.]" This the line also or construction[]" Wis. interpretation interpretation, concerning and file Admin. simply an "[a]ny information "[a]ny makes applicant required about or required Code § PSC no sense. must file transmission concerning "agreements for use of the transmission system to deliver plant power[.]" ¶92 Wis. Admin. Code § PSC 111.53(1)(f)4. Furthermore, as previously noted, § PSC 111.53(1)(f) requires an applicant to file information regarding the listed items "for each proposed power plant site." If Clean Wisconsin's interpretation of § PSC 111.53(1)(f)4. were correct, then an applicant would be required to obtain transmission line agreements for (at a minimum) two separate proposed sites, one of which will not be built upon. 44 Clean Wisconsin fails to No. explain how a utility is to obtain agreements 2004AP3179 for the construction of transmission lines for a power plant whose CPCN application has yet to be approved or a plant whose site is uncertain. ¶93 Therefore, we accord the PSC's interpretation of § PSC 111.53(1)(f)4. great weight deference. of information relating document entitled prepared by the to "Generation American WEC filed over 100 pages transmission lines, Interconnection Transmission including Study Company a Report" (ATC)30 and a document entitled "Power of the Future (PTF) Facilities Study: Transmission Assessment of Proposed Generator Additions." These documents contain very detailed assessments of the effects of ERGS on existing transmission, required transmission improvements, upgrades, and modifications; detailed breakdowns of the estimated costs for the improvements; and technical schematics for the transmission upgrades. detailed The PSC determined that these filings were sufficient to satisfy § PSC 111.53(1)(f)4. We cannot conclude that this determination was without a rational basis.31 30 According to the parties' submissions, transmission assets in eastern Wisconsin. 31 ATC owns all Although Clean Wisconsin also makes passing reference to Wis. Admin. Code § 111.53(1)(f)9. in its brief, a reviewing court need not address arguments insufficiently developed. Barakat v. DHSS, 191 Wis. 2d 769, 786, 530 N.W.2d 392 (Ct. App. 1995). 45 No. 4. 2004AP3179 Other required information ¶94 PSC's Clean Wisconsin's final argument with regard to the completeness determination is that the PSC erred in determining that WEC's CPCN application was complete because it specifically acknowledged that it was not complete in regard to certain wetland information. The language in the PSC's November 15, 2002, letter to which Clean Wisconsin refers, states: While the application is determined to be complete at this time, our determination is, in part, based on [WEC's] commitment to supply additional information related to items 6, 7, and 18 of the Commission's October 7, 2002, incompleteness letter. Substantial amounts of information relative to items 6 and 7 have been provided and will allow our review of the wetland delineations to begin. Based on the information contained in Supplement 4 and conversations with [WEC's] staff, it is my understanding that the remaining information relative to items 6 and 7, consisting of final wetland reports from the Southeast Regional Planning Commission, will be available approximately in two weeks. In addition, the information relative to subsurface drilling, sampling and testing survey, the wave/environmental climate state survey and the aquatic/benthic environmental lake bottom characterization survey in item 18 will be available on the time line set out as answer 5-SUP-021 of Supplement 4. While I fully expect to receive the remaining information on the established time frames, failure by [WEC] to submit the information in a timely manner will likely delay the CPCN process as this information is necessary in order to complete our review of the proposed project and issue a joint PSCW/DNR Environmental Impact Statement. Prior to receipt and review of the necessary information, it would be extremely difficult to schedule hearings. . . . is Please be aware that application information that considered adequate now may require further 46 No. development later process. . . . ¶95 in the Commission's 2004AP3179 review Contrary to Clean Wisconsin's suggestion, this letter does not state that WEC's application is being determined to be complete even though the wetland information is incomplete. The letter clearly states that WEC filed information sufficient to "allow [the PSC's] review of the wetland delineations to begin." The letter also discusses the information is to be received. "application require information further for when additional Further, it specifically states that development timeline is considered later in the adequate now Commission's may review process." ¶96 In acknowledged other that words, WEC's the PSC's application completeness contained information for the PSC to begin its review. letter sufficient The PSC stated that WEC may be required to file additional information in the future. Nothing in the letter suggests that WEC's application was lacking information necessary for the PSC to determine that the application was complete. We see nothing unreasonable in the PSC determining an application to be complete yet requesting further information application. Given to assist that the in its PSC's review of the completeness CPCN letter acknowledges that WEC had filed sufficient information for it to begin its review of the CPCN application, Clean Wisconsin has failed to persuade us that completeness is unreasonable. Id. 47 the PSC's determination of No. ¶97 We next examine the parties' arguments 2004AP3179 concerning whether the PSC erroneously issued the CPCN for the two ERGS. B. Issuance of the CPCN 1. Wisconsin's Energy Priorities Law ¶98 The PSC is Priorities Law (EPL), for large required and electric gives comply Wis. Stat. § 1.12, Wis. Stat. § 196.025(1). policy to generating The agencies EPL and with when the Energy approving CPCNs facilities. states See governmental Wisconsin's units a energy list of energy source options and the priority in which they should be considered when making decisions. raise numerous arguments that the Clean Wisconsin and Calpine PSC violated the EPL approving the CPCN for ERGS. ¶99 The relevant part of the EPL states: (4) Priorities. In meeting energy demands, the policy of the state is that, to the extent costeffective and technically feasible, options be considered based on the following priorities, in the order listed: (a) Energy conservation and efficiency. (b) Noncombustible renewable energy resources. (c) Combustible renewable energy resources. (d) Nonrenewable in the order listed: 1. 2. than 1%. 3. combustible energy resources, Natural gas. Oil or coal with a sulphur content of less All other carbon-based fuels. 48 by No. 2004AP3179 (5) Meeting Energy Demands. (a) In designing all new and replacement energy projects, a state agency or local governmental unit shall rely to the greatest extent feasible on energy efficiency improvements and renewable energy resources, if the energy efficiency improvements and renewable energy resources are cost-effective and technically feasible and do not have unacceptable environmental impacts. (b) To the greatest extent cost-effective and technically feasible, a state agency or local governmental unit shall design all new and replacement energy projects following the priorities listed in sub. (4). ¶100 Wisconsin Stat. § 196.025(1) specifically PSC with the duty to implement these priorities: charges the "To the extent cost-effective, technically feasible and environmentally sound, the [PSC] shall implement the priorities under s. 1.12 (4) in making all energy-related decisions and orders, including advance plan, rate setting and rule-making orders." ¶101 ERGS would use high-sulfur coal as its fuel, which is the lowest-priority fuel under the EPL. Calpine has proposed an alternative facility to be fueled by natural gas, which is the highest priority nonrenewable combustible energy option. ¶102 Before the discussing PSC's interpretation forth the relevant summarize the the and portions reasoning parties' application of the given for arguments of PSC's the the Final PSC's concerning EPL, we set Decision and conclusions regarding the EPL, as it is the reasoning in the PSC's decision that frames the parties' arguments on appeal. ¶103 We begin by noting that the PSC clearly recognized that the EPL was applicable to its decision: 49 No. 2004AP3179 Another important legal and policy issue this Commission must decide is whether or not there is enough energy conservation, renewable resources, or a cleaner burning fuel to cancel or delay the construction approvals sought for the SCPC units in this proceeding. State law provides guidance to the Commission in carrying out the state's energy policy. Our obligations are set forth in Wis. Stat. § 1.12. ¶104 The PSC then discussed the opposition to ERGS and the argument that alternative discretion consider the EPL presented in its applying mandates by Calpine. the obligations selection EPL under and the The that of the PSC it Plant natural-gas stated was it required Siting Law applying the EPL: This [EPL], however, is not a mandate to state agencies that must be mechanically applied to achieve a specific outcome. In the Prefatory Note to 1993 Wis. Act 414, which enacted this law, the Legislature declares that it "does not want to create inflexible mandates or deprive decision makers of the discretion needed to respond appropriately to the circumstances surrounding energy-related decisions." The Legislature explains that this law uses "a combination of directives and encouragement, while reserving substantial discretionary authority to the decision maker." Such discretion must be applied in this case, to harmonize the directives of the [EPL] with those of the Power Plant Siting Law. The statutory framework for analyzing whether approving a CPCN project would be in the public interest involves a number of factors, beyond those specified in the [EPL]. The Commission must consider the extent to which a proposal may cause individual hardships, as well as concerns about its engineering, economics, safety, reliability, environmental impacts, interference with local land use plans, and impact upon wholesale competition. The Commission is required to balance all of these competing elements, which frequently lead in different directions; no single primary factor is the measure of a CPCN project. Thus, the Commission is responsible for harmonizing the [EPL] and the Power 50 had to when No. 2004AP3179 Plant Siting Law, in order to determine what is in the public interest. ¶105 The PSC then began its analysis under the EPL by addressing the first listed priority, energy conservation and efficiency: "The applicants' and Commission staff's estimates of achievable energy efficiency do not demonstrate that energy efficiency could substitute, or reliably postpone, or the cost-effectively SCPC units." serve However, the to PSC concluded that "a moderate level of intervention in the energy efficiency market would produce at least 55 MW of cost-effective and technically feasible energy efficiency in WEPCO's service territory by 2008." Therefore, the PSC ordered WEPCO to submit a plan to the PSC for capturing at least 55 MW through energy efficiency programs. ¶106 The PSC next discussed renewable resources and identified wind power and biomass energy as the resources most likely to be cost-effective. It noted that WEPCO had issued two requests for proposals considering 200 MW of wind power and 25 MW of biomass resources power, are not but concluded cost-effective, that these "renewable technically feasible alternatives." ¶107 The PSC then considered natural-gas power, stating: "No gas-fired, baseload facilities were presented as either a cost-effective record."32 or technically feasible alternative in this The PSC explained that it was critical that WEPCO address the need for new baseload facilities immediately: 32 A baseload facility provides power "effectively on a constant basis, not less than 70% of the time, day in day out." 51 No. 2004AP3179 A critical part of the Commission s ultimate preference for coal-fired generation over gas-fired generation rests heavily on the discretion accorded to the Commission under the [EPL] and the Power Plant Siting Law. More significantly, the crux of this case is really about the appropriate timing to construct new baseload generation. A fundamental policy choice presented in this case is whether the Commission believes that WEPCO needs to take steps now to address needs for new baseload facilities over the next decade. The Commission believes that the applicants should take those steps now to ensure these facilities are in service in 2009 and 2010. ¶108 The PSC's decision that coal-fired baseload generation was appropriate was, in part, based on Electric Generation Expansion Analysis System (EGEAS) computer modeling projections33 that demonstrated energy priority alternatives "[could not] replace the need for new baseload, coal-fired units to serve WEPCO." The PSC further stated that the factors in the Plant Siting Law supported its conclusion: There are qualitative factors set forth in Wis. Stat. § 196.491(3)(d) that also support the Commission s conclusion that new coal-fired generation is in the public interest and that ERGS is the most cost-effective and technically feasible way to address WEPCO's baseload needs. The Commission's decision to approve SCPC 1 and 2 balances its obligations under the [EPL] and the Power Plant Siting Law. It also reflects the Commission's policy judgment that while 33 EGEAS is "a modular production-costing, generationexpansion software tool that is used to find least-cost generation system expansion plans by comparing all combinations of multiple generation options to meet forecasted system load." The inputs used included "forecasted energy and demand, the economic and engineering characteristics of existing and possible new generation units, fuel price forecasts, known or expected energy purchases or sales, desired reserve margin, and the forecasted cost of emission allowances." The complexity of this tool is readily apparent. 52 No. 2004AP3179 natural gas-fired generating facilities may be better suited for peak and intermediate load generation, coal-fired generation provides the most practical means to serve WEPCO's needs for baseload capacity. The evidence in this proceeding demonstrates the advantages of using cleaner burning coal technologies like SCPC as a baseload resource over gas-fired generation. The need for new baseload generation is the critical factor that distinguishes this decision from the Port Washington order. The Port Washington order addressed WEPCO s need for new intermediate capacity. The Commission has not approved construction of any new baseload, coal-fired generation in Wisconsin since 1980. The evidence presented reflects the fact that WEPCO s existing fleet of baseload plants is aging. WEPCO s aging baseload resources may be asked to maintain or even increase their historical production as older facilities are retired over the next decade and transmission constraints within WUMS continue to limit the ability of Wisconsin load-serving entities to import electricity. In fact, in Phase I of PTF the Commission approved the retirement of 320 MW of existing baseload, coal-fired generation at Port Washington. The record in this docket demonstrates that WEPCO needs more baseload capacity. ¶109 The PSC then examined environmental factors and stated that as part of the proposed plan, WEPCO would install technology to reduce emissions on the existing plants at the site. Finally, it noted that the policy preferences set forth in the EPL are actualized in "the overall pattern of decisions made by each agency," and that since its enactment, the PSC had authorized more than 6,900 MW of natural-gas fueled plants. The PSC emphasized that "[t]he total mix of energy sources that the Commission has approved over this time period shows a pattern of decisions for baseload, intermediate and peaking generating facilities that complies with the state s energy policy." 53 No. 2004AP3179 ¶110 The dispute regarding the EPL centers on the PSC's focus on the need for "baseload" capacity and its conclusion that the natural gas option was not technically feasible for this project. in interpreting and applying the cost-effective and The PSC concluded that EPL, it was required to consider its obligations under the Plant Siting Law and type of project being proposed. Clean Wisconsin and Calpine argue that the PSC's interpretation of the EPL was erroneous because the concept of "baseload" capacity is not part of the EPL and because the factors in the Plant Siting Law have no bearing on the requirements of the EPL. ¶111 As discussed supra, this court applies varying degrees of deference to an agency's interpretation of statutes. and Clean Wisconsin argue that this court should Calpine give no deference to the PSC's interpretation of the EPL, asserting that it satisfies none of the four requirements for granting great weight deference discussed supra. application of the statute has They assert that the PSC's never been used in a CPCN determination concerning a high sulfur, coal-fueled facility and that the baseload concept is contrary to the plain language of the EPL. In contrast, the PSC contends that great weight deference is appropriate, citing its "substantial experience in processing certificate applications." ¶112 We agree with the PSC and conclude that great weight deference is appropriate. The PSC satisfies the first requirement for great weight deference because it is clearly charged by the legislature with applying the EPL in its CPCN 54 No. determinations. 2004AP3179 Second, the PSC has frequently and consistently interpreted the EPL in light of its obligations under the Plant Siting Law and the particular requirements of the project being proposed. ¶113 For example, in Application of Madison Gas & Elec. Co., No. 05-CE-121 (Wis. PSC Oct. 9, 2003), the PSC examined a proposal to build a natural-gas-powered facility on the campus of the University project was to of Wisconsin-Madison. provide electric power The for purpose Madison of the Gas and Electric Company and to provide steam and chilled water to the university. In its application of the EPL, the PSC discussed wind power, a higher priority energy than natural gas. Final Decision stated: "Although there are additional The wind resources available, the Commission finds that wind resources are neither technically feasible nor cost-effective options to displace the need for a project the size and scope presented in this application." Id. at 13 (emphasis added). ¶114 Likewise, in Application of Wis. Elec. Power Co., No. 05-CE-117 (Wis. PSC Dec. 20, 2002) [hereinafter Port Washington Order], where the PSC made its determination regarding Part I of the proposal that is the subject of this litigation, the PSC applied the cost effective and technically feasible standards in the context of the Plant Siting Law requirements concerning the proposed natural-gas-fired plants. In its application of the EPL, the PSC discussed energy efficiency and renewable resources but concluded that both were "neither technically feasible nor 55 No. 2004AP3179 cost effective options to displace the need for a project the size and scope presented in these applications." Id. at 16. ¶115 In Application of Wis. Pub. Serv. Corp., No. 6690-CE187 (Wis. decision PSC Oct. following situation very 7, 2004) [hereinafter this case, the similar to the PSC Weston Order], a EPL a applied case. present the That to decision concerned a 515 MW coal baseload unit proposed by the Wisconsin Public Service Corporation. There, corporation to submit a plan to efficiency, but came to the same the capture PSC ordered the 32 MW of energy conclusion as the Final Decision in the present case that natural gas was not a costeffective or technically baseload plant. feasible alternative to coal for a Id. at 16-17. ¶116 Contrary to the assertion of Calpine and Clean Wisconsin, it is irrelevant that the present case is the first time the PSC has applied its interpretation of the EPL to a high-sulfur coal facility. The correct test for great weight deference agency is whether the has prior experience in interpreting the statutory section at issue, not whether it has previously applied that presented on appeal. interpretation to the precise facts Honthaners Rests., 240 Wis. 2d 234, ¶12. Therefore, we conclude that the PSC's interpretation of the EPL meets the second requirement for great weight deference. ¶117 Next, we conclude that the third requirement for great weight deference is met because the PSC's interpretation of the EPL requires it to interpret the phrases "cost effective" and "technically feasible," which in turn calls for the PSC to rely 56 No. 2004AP3179 on its expertise of highly technical subjects such as economic forecasting and industrial technology. The PSC must use its expertise to determine what is "cost effective" in any given situation or what is "technically feasible." ¶118 Finally, by interpreting the provisions of the EPL in light of the requirements under the Plant Siting Law, the PSC has provided an interpretation of the EPL that will promote uniformity in the application of the EPL as it relates to CPCN determinations. As such, we conclude that the fourth requirement for great weight deference is satisfied. ¶119 Clean Wisconsin and Calpine also argue that we cannot give great weight deference Wis. Stat. § 1.12(4) to because the the PSC's PSC interpretation cannot interpret of the statute for all the other agencies that must also apply this provision. We reject this argument because the PSC's interpretation of the EPL pertains only to CPCN determinations under the Plant Siting Law. Other agencies are free to apply the EPL in the contexts of other determinations that they are authorized to make. Accordingly, we give great weight deference to the PSC's interpretation of the EPL and will not substitute our interpretation of the statute unless the PSC's interpretation is irrational. ¶120 Clean interpretation Wisconsin of the and EPL Calpine cannot be contrary to the plain text of the EPL. argue upheld that the because PSC's it is Additionally, Calpine asserts that the determination that gas-powered plants could not support baseload needs is an invalid, unpromulgated "rule" that 57 No. 2004AP3179 the PSC adopted in this case, bypassing the proper procedures for creating rules set out in Wis. Stat. § 227.10(1). ¶121 We conclude that the PSC's interpretation of "cost effective and technically feasible" must be harmonized with the Plant Siting Law because the EPL is to be applied as the PSC makes energy-related decisions under both statutes. Without consideration of the various statutes an agency is charged with administering, there is no context in which to gauge whether an option is cost effective or technically feasible. ¶122 The EPL itself states that the priorities are to be applied "[i]n meeting energy demands." Wis. Stat. § 1.12. Wisconsin Stat. § 196.025(1) states the priorities of § 1.12(4) are to be applied "in making all energy-related decisions and orders." Plant When the PSC makes a determination on a CPCN under the Siting Law, it applies the EPL in the context determining whether to approve the requested plant siting. question the PSC should ask is thus: of The Given the requirements of the Plant Siting Law, what is the highest priority energy option that is also cost effective and technically feasible?34 Therefore, the PSC's interpretation of the EPL is not contrary to the text of the statute. ¶123 We also reject Calpine's argument that the use of "baseload" terminology and the determination that natural gas was not cost effective and technically feasible amounted to an 34 If an agency makes an energy determination under a different statute, it would interpret "cost effective and technically feasible" in concert with the provisions of that statute. 58 No. invalid, unpromulgated "rule." 2004AP3179 The term "baseload" is a way of defining the type of project at issue. The determination that natural gas was not an appropriate alternative was the PSC's conclusion after it analyzed the various alternatives through EGEAS computer modeling and other techniques. The term "baseload" is not a "regulation, standard, statement of policy, or general order," as "rule" is defined under Wis. Stat. § 227.01. ¶124 The discussion of the need for "baseload" facilities in the present case is part of the PSC's explanation of the size and scope of the project it has before it. If the PSC determines under the Plant Siting Law that a project of this size and scope (i.e. a baseload plant) is "in the public interest" and is necessary to "satisf[y] the reasonable needs of the public for an adequate supply of electric energy," then it must apply the EPL and choose the highest priority energy option that is both cost effective and technically feasible in the context of that need. ¶125 In sum, we cannot conclude that the PSC's interpretation of the EPL is contrary to the text or the statute or is in any way irrational. As such, we turn now and discuss the challenges Clean Wisconsin and Calpine raise to the PSC's general application of the EPL in this case. ¶126 Clean Wisconsin and Calpine raise numerous intertwined claims regarding the PSC's general application of the EPL. Clean Wisconsin first argues that the PSC erroneously determined that the EPL did not bind the agency to accept higher priority 59 No. 2004AP3179 alternatives that are cost effective and technically feasible. It relies on language in the Final demonstrates the PSC believes it Decision could that approve it ERGS argues even if higher priority alternatives are at the same cost or lower than high-sulfur coal: S.C. Johnson asserts that it is not enough that ERGS be close in price to other higher priority options and that the applicants in the present proceeding must prove a "compelling reason" not to abide by the energy priorities described in [EPL]. Under this reasoning, the Commission would be obligated to select a higher priority fuel option unless the applicants have demonstrated that the proposed units at ERGS will be provided at a substantially lower cost than available higher energy priorities. This [EPL], however, is not a mandate to state agencies that must be mechanically applied to achieve a specific outcome. ¶127 Clean Wisconsin also relies on comments from the commissioners at their October 29, 2003, meeting to demonstrate that the commissioners did not feel bound by the EPL. It cites comments by Chairperson Burneatta Bridge that she did not "feel constrained to choose gas in any scenario in which it is the least expensive," by Commissioner Ave Bie that the legislature did not mean for these priorities to be "literal" and by Commissioner Bert Garvin that "the energy priorities themselves are directory and not mandatory as a matter of law." ¶128 Clean Wisconsin also argues that the Final Decision incorrectly relies on language in the prefatory note of the Act that created the EPL to defeat the plain meaning of the statute. It argues that there are no ambiguities in the EPL allowing the 60 No. PSC to consider legislative history such as 2004AP3179 the prefatory comment, and that even if one does look at the comment, it gives the PSC discretion to determine only whether energy options are cost effective and technically feasible. It also contends there are no conflicts between the EPL and the Plant Siting Law. ¶129 Calpine also argues the EPL does not require that alternate proposals completely displace the need for projects like ERGS. Calpine concludes that proper application of the EPL mandates selection of their natural-gas powered alternative. ¶130 The bulk of the parties' disagreements on the PSC's application of the EPL relates to the language "to the extent cost-effective and technically feasible." determination technically that natural feasible on its gas is not coordinate The PSC based its cost effective determination that and in this instance, the baseload power needs of the public could not be met by any option other than high-sulfur coal. As the Final Decision stated, "the key question in this docket is not whether additional coal-fired baseload generation should be approved, but when it should be installed." ¶131 To the extent the respondents cite to language in the Final Decision and comments by the commissioners that suggest the PSC did not consider the EPL to be binding, we disagree. The PSC did apply the EPL as we described above and simply came to a conclusion favoring coal over natural gas. We also note that the commissioners clearly explained their decision-making process under the EPL and Plant above. Commissioner Garvin stated, "The best cost effective and 61 Siting Law as we described No. technically feasible solution will depend need must be met." 2004AP3179 . . . on what type of Chairperson Bridge stated: In addition to the energy priority law, the PSC has responsibilities under the CPCN law. And as I mentioned, these include assuring reliability and assuring an adequate supply of energy. And my approach to the energy priority law is to rank the options that also meet the criteria of the CPCN law. The Final Decision and the entire transcript of the commissioners' discussion of the EPL demonstrate that the PSC did not disregard the priorities listed in Wis. Stat. § 1.12(4), but rather applied the priorities within the context of the requirements of the Plant Siting Law. ¶132 To respond to other arguments by the respondents concerning the interplay between the EPL and the Plant Siting Law, we agree that there is no "conflict" between the two laws. The two statutes work together to provide a framework in which the PSC is to make energy decisions. The respondents assert that the PSC used the discretion discussed in the Prefatory Note of the EPL However, we to bypass conclude the any unambiguous discretion statutory employed priorities. by the PSC in making its determination was necessary to determining whether alternatives clear were requirement cost of effective and technically Wis. Stat. § 1.12(4). The feasible, PSC did a not bypass the priorities of the EPL. ¶133 Relying on the PSC's decision in the Weston Order, Calpine also argues that the PSC has interpreted the EPL as not requiring that higher priority alternatives must completely displace the need for a lower priority source project in order 62 No. to be approved.35 2004AP3179 This argument is misleading, however, because the higher priority alternative added to the plan in that case, as was the case here, was "energy efficiency," which is not a tangible source to provide designed to save energy. energy, but rather, a program As we discussed above, the Weston Order actually applied identical reasoning to that employed in the PSC's Final Decision in the present case. ¶134 After the PSC's considering general the application parties' of the arguments EPL in this concerning case, we conclude that the PSC's determination that coal was the only 35 Calpine relies on the following language from the PSC's decision in the Weston Order: Wis. Stat. § 1.12(4) does not expressly provide that conservation or renewable resources must displace or delay a proposed project; the statute requires that such alternatives be considered if shown to be costeffective and technically feasible. The plain language of the Energy Priorities Law together with the directive in Wis. Stat. § 196.025, require the Commission to maximize the overall use of the preferred options to the extent possible, even in incremental amounts. This is consistent with the obvious objective of the law, which is to deploy the more environmentally preferable options first when meeting Wisconsin's need for energy. The record in this proceeding demonstrates that other options such as conservation and renewable resources do not displace the need for Weston 4. However, as discussed below, this record also establishes a basis to require implementation of additional options that are "cost effective, technically feasible, and environmentally sound" consistent with the Energy Priorities Law. Weston Order, at 11-12. 63 No. 2004AP3179 available cost-effective, technically feasible energy option for the baseload needs of the public in this instance was a rational one, and we therefore decline to substitute our own judgment for that of the PSC. 2. The Plant Siting Law ¶135 In addition to challenging the PSC's general application of the EPL, Clean Wisconsin and Calpine argue that the PSC improperly applied the Plant Siting Law to the CPCN application in this case, segments of that statute. However, Siting before Law, we appropriate. 'great raising concerning various We discuss each issue raised in turn. addressing must issues each determine issue what concerning level of the Plant deference is As this court has previously recognized, "[t]he weight' standard has Wisconsin." been called the Hutson, 263 Wis. 2d 612, ¶32. general rule in Our case law has established that we should accord an agency's interpretation of the law great weight deference when the "'legal question is intertwined with factual determinations or with value or policy determinations'" responsibility and for the agency determination of involved fact and "'has primary policy.'" Id. (quoting Sauk County, 165 Wis. 2d at 413 (in turn quoting West Bend Educ. Ass'n, 121 Wis. 2d at 12)). ¶136 We conclude that great weight deference is appropriate here. First, there is no dispute that the legislature has specifically charged the PSC with the interpretation of chapter 196. The legislature has given the PSC jurisdiction to "supervise and regulate every public utility in this state and 64 No. 2004AP3179 to do all things necessary and convenient to its jurisdiction." Wis. Stat. § 196.02(1). ¶137 Next, the PSC is the only agency charged with administering § 196.491(3)(d), which has been in existence for 30 years. Further, there can be no doubt the decision to issue a CPCN for a specific plant at a specific location calls for the PSC to utilize its expertise and make a variety of factual the PSC's findings. ¶138 Finally, interpretation and and most application importantly, of § 196.491(3)(d) calls for a variety of policy determinations. inherently Even a cursory review of the Plant Siting Law reveals that the PSC is charged with making a number of legislative-type policy determinations when determining if a CPCN should be issued. PSC must determine whether: For instance, the "[t]he proposed facility satisfies the reasonable needs of the public for an adequate supply of electric energy"; "[t]he design and location or route is in the public interest considering alternative locations engineering, economic, or alternative routes, safety, sources of individual reliability and supply, hardships, environmental factors"; "[t]he proposed facility will not have undue adverse impact on other environmental values"; "[t]he proposed facility will not unreasonably interfere with the orderly land use and development plans for the area involved"; and "[t]he proposed facility will not have a material adverse impact in competition in the relevant wholesale electric service Wis. Stat. § 196.491(3)(d)2.-4., 6.-7. (emphasis added). 65 market." No. ¶139 All of these determinations are 2004AP3179 legislative-type determinations that require the PSC to make factual findings and apply its technical knowledge and expertise. The final decisions as to where and when a proposed power plant should be constructed, how large the plant should be, how it should be constructed, and what fuel it should use are quintessentially legislative policy choices that have been delegated to the PSC. ¶140 Because we conclude great weight deference is appropriate, our analysis of the parties' claims regarding the Plant Siting Law will focus on whether the PSC's determination had a rational basis, Hutson, 263 Wis. 2d 612, ¶32, and was consistent with the statutory language, Bosco, 273 Wis. 2d 586, ¶19. a. Reasonable Needs/Public Interest ¶141 Under Wis. Stat. § 196.491(3)(d)2.-3., the PSC can approve an application for a CPCN filed by a public utility only if "the proposed facility satisfies the reasonable needs of the public for design and an adequate location or supply route of is electric in the energy" public and "the interest considering alternative sources of supply, alternative locations or routes, individual hardships, engineering, economic, safety, reliability and environmental factors."36 Part of the calculus 36 Wisconsin Stat. § 196.491(3)(d)2.-8. sets out the requirements for granting a CPCN for a proposed power facility: (d) Except as provided under par. (e) and s. 196.493, the commission shall approve an application filed under par. (a) 1. for a certificate of public 66 No. convenience and necessity only determines all of the following: if the 2004AP3179 commission 2. The proposed facility satisfies the reasonable needs of the public for an adequate supply of electric energy. This subdivision does not apply to a wholesale merchant plant. 3. The design and location or route is in the public interest considering alternative sources of supply, alternative locations or routes, individual hardships, engineering, economic, safety, reliability and environmental factors, except that the commission may not consider alternative sources of supply or engineering or economic factors if the application is for a wholesale merchant plant. In its consideration of environmental factors, the commission may not determine that the design and location or route is not in the public interest because of the impact of air pollution if the proposed facility will meet the requirements of ch. 285. 4. The proposed facility will not have undue adverse impact on other environmental values such as, but not limited to, ecological balance, public health and welfare, historic sites, geological formations, the aesthetics of land and water and recreational use. In its consideration of the impact on other environmental values, the commission may not determine that the proposed facility will have an undue adverse impact on these values because of the impact of air pollution if the proposed facility will meet the requirements of ch. 285. 5. The proposed facility complies with the criteria under s. 196.49(3)(b) [requires certification that public convenience and necessity require the project] if the application is by a public utility as defined in s. 196.01. 6. The proposed facility will not unreasonably interfere with the orderly land use and development plans for the area involved. 7. The proposed facility will not have a adverse impact on competition in the wholesale electric service market. 67 material relevant No. 2004AP3179 that goes into making these determinations is estimating the future energy needs of the state and forecasting the economic impact of proposed plans. ¶142 Accounting for the myriad of economic factors that affect demand and energy prices is an incredibly complex task. All parties rely on the EGEAS computer-modeling program to provide estimates of what the optimal construction plans would be, given changes in the many variables affecting the state's future energy situation. WEPCO ran models on EGEAS and presented those findings in its application for the CPCN. ¶143 The PSC also used EGEAS modeling to choose the best energy option under the requirements of the EPL and the Plant Siting Law. In the Final Decision, the PSC stated: "Almost every EGEAS run shows the need for new baseload generation over the next decade," and "[t]hese EGEAS runs demonstrate that the energy priority resources, alone or in combination, cannot replace the need for new baseload, coal-fired units to serve WEPCO." The PSC used this modeling as well as other factors to conclude that natural-gas-fired units would not be cost effective and technically feasible for baseload capacity in this case. higher Given the need for more baseload plants and the lack of priority alternatives, the PSC approved the application for the coal-fired units. 8. For a large electric generating facility, brownfields, as defined in s. 560.13(1)(a), are used to the extent practicable. 68 CPCN No. ¶144 Clean improperly Clean Wisconsin applied of fact Calpine § 196.491(3)(d)2.-3. Wisconsin argues findings and that and pertinent variables. the the PSC EGEAS argue to the failed modeling to that 2004AP3179 the present make failed to PSC case. required consider Calpine joins in arguing that even with the various problems in EGEAS, Calpine's natural-gas-fired plant was the lowest cost option, and therefore was required to be selected. Calpine also argues that its natural-gas alternative could be operated as a baseload facility and that there was no basis for the PSC's determination that "no gas-fired, baseload facilities were presented as either a cost-effective or technically feasible alternative in this record." i. Required Findings of Fact ¶145 Clean Wisconsin argues that the Final Decision did not contain findings of fact and that the findings section "merely recited the statutory criteria and labeled them 'Findings,' such that it is impossible to review the PSC's decision. See Stas v. Milwaukee County Civil Serv. Comm'n, 75 Wis. 2d 465, 475, 249 N.W.2d 764 (1977). This argument is not persuasive. There is no requirement that the agency provide an elaborate opinion. Wis. Envtl. Decade, Inc. v. PSC, N.W.2d 205 (Ct. App. 1990) (WED IV). 98 Wis. 2d 682, 701, 298 All that is required is that the findings of fact and conclusions of law are specific enough to inform the parties and the courts on appeal of the basis of the decision. Id. Here the findings of fact and conclusions of law explain the basis of the decision, and the Final Decision includes a 50-page analysis of the issues in the 69 No. case. 2004AP3179 Therefore, we are easily able to determine whether the PSC acted appropriately. ii. Alleged Deficiencies in EGEAS Modeling ¶146 Clean Wisconsin defective because: argues that the EGEAS modeling was 1) it failed to include known costs related to the ERGS project; 2) it was not utilized to evaluate higher priority fuel sources; modeling variables. and 3) its modeling utilized biased The thrust of its argument is that the EGEAS modeling system is only as good as the data input for its projection, such that flawed inputs would necessarily result in flawed results. a) We now discuss these three issues. Failure to Include Known Costs ¶147 Clean Wisconsin argues that health-related costs regarding ERGS's planned air emissions were introduced into the record but not included in the EGEAS runs. Other allegedly ignored items include mitigation payments to Oak Creek and other local community impacts such as property value impact. The PSC, on the other hand, argues that it did not rely solely on EGEAS modeling and considered all relevant factors. ¶148 We reject mischaracterizes determinations. Clean the role Wisconsin's of EGEAS challenge because in PSC's the it CPCN The PSC describes EGEAS as its "primary tool to consider optimal resource options on a quantitative basis," but "it is stated: what by no means the only tool." As the Final "Power supply planning is not a science. resource options will ensure low cost, Decision Determining reliability and environmental sensitivity for the consuming public requires the 70 No. exercise of judgment and consideration of a wide 2004AP3179 variety of qualitative factors." ¶149 In addition, the PSC notes that the CPCN statute does not require computer modeling and that it did not rely solely on the results output by EGEAS, but rather integrated those results into its analysis of all the requirements of the Plant Siting Law. The PSC relied on significant devoted to mitigation payments. Decision specifically stated: evidence in the record In addition, the PSC's Final "The applicants shall work with neighboring communities to mitigate valid concerns and impacts." ¶150 Finally, the PSC asserts that the health-related costs associated with air emissions PSC's authority. were outside the scope of the Wisconsin. Stat. § 196.491(3)(d)3. states: In its consideration of environmental factors, the commission may not determine that the design and location or route is not in the public interest because of the impact of air pollution if the proposed facility will meet the requirements of ch. 285 [a chapter charging the DNR with promulgating rules regarding air pollution control]. The statute prohibits the PSC from determining that a project is not in the public interest based on air emissions so long as ch. 285 standards analysis of are the met. public While cost interest is a factor requirement, to under the include the health-related costs of air emissions could result in a project being rejected for the very Therefore, this interpretation reason of rational one. 71 the the PSC's statue duties disallows. is not a No. ¶151 Examining the numerous Wis. Stat. § 196.491(3)(d)2.-8. and requirements forecasting 2004AP3179 listed future in energy needs and prices is a highly technical exercise that the PSC is charged with performing. Deciding what economic factors are, or are not, to be included in the computer model is precisely the type of determination that the PSC should be given great deference to carry out, because it is operating well within its area of expertise and it is much better suited to make those decisions than is the judiciary. "It is not the function of a reviewing court to dictate the economic analysis to be employed in a decision [that] is based upon the expertise and lies within the discretion of the PSC." Seebach v. PSC, 97 Wis. 2d 712, 728, 295 N.W.2d 753 (Ct. App. 1980). We conclude that the PSC's choice of cost variables for the EGEAS modeling was rational. b) Failure to Evaluate Higher Priority Fuel Sources ¶152 Clean Wisconsin next argues that the PSC failed to run a modeling analysis of natural gas power "comparable" to the EGEAS runs of coal power it performed. "critical to the public interest It states that it is test, which requires consideration of 'alternative sources of supply,' as well as economic, safety, and environmental factors." that it indeed ran models assuming wind The PSC argues power, natural gas, biomass, and conservation alternatives, and also conducted an "integrated sources. alternative" combining various higher priority Clean Wisconsin argues that the models are not fully "comparable" unless they are premised on the same mega wattage for each source. However, it 72 provides no basis for this No. requirement. In fact, it provides no basis for the foundation of this argument: ¶153 Our 2004AP3179 that computer modeling is required. great weight deference review of the alternate source comparison is not concerned with the actual procedures utilized by the PSC, but rather we examine whether there is a rational basis for the determination of the PSC. The record contains significant evidence supporting the PSC's selection of coal over gas for baseload capacity in this case, including: 1) a need for significantly expanded baseload facilities; 2) the cost and volatility of natural gas prices; 3) the possible difficulty of supplying baseload natural gas plants; 4) the lack of coal-powered plants built in the last twenty-five years, coupled with the aging and retirement of existing coal plants; 5) the desire for diversifying the utilities' fuel mix; and 6) multiple EGEAS runs selecting a coal plant, even after the PSC specifically altered inputs in response to such criticisms. c) Biases in EGEAS Variables ¶154 Clean Wisconsin next argues that the PSC ignored flaws in the EGEAS inputs, including artificially low reliability for existing facilities, artificially high availability for ERGS and inconsistent allocation of costs, which were all biased in favor of making ERGS look more attractive from a cost standpoint. It argues that these biases undermine the reliability of the EGEAS forecasts. ¶155 This issue was specifically Final Decision: 73 addressed in the PSC's No. 2004AP3179 S.C. Johnson criticizes a number of modeling inputs, alleging that WEC is using improper engineering and fuel data for existing WEPCO units, an improper common systems cost allocation to the OCPP units, a demand and energy forecast that is too high, an improper addition of 200 MW of demand obligations for WPPI and MEUW, overly favorable engineering assumptions for the proposed SCPC units, and an improper early retirement of certain OCPP and Presque Isle units, while it is also ignoring the likely availability of additional energy efficiency efforts that would reduce the growth in electric demand. Commission staff evaluated these concerns, revised some of its assumptions, and prepared an EGEAS run to demonstrate how these changes would affect the optimal expansion plan. Because it includes additional energy efficiency to control electric demand, in addition to generation options, Commission staff described this run as an "integrated alternative" that integrates the energy priorities described in Wis. Stat. §§ 1.12(4) and 196.025. For example, this EGEAS run includes lower forecast demand and energy growth rates of 1.8 to 2.1 percent per year, instead of the 2.5 to 2.9 percent per year growth rates in the base forecast. In addition, a total of 600 MW of demand is stripped away from the WEPCO base electric demand forecast, in 200 MW increments every two years through 2011, to reflect a more aggressive approach to energy conservation. This integrated alternative also includes a less favorable 4 percent forced outage rate for the SCPC units. Even with the revised input assumptions of this integrated alternative, the EGEAS model results are not significantly different. EGEAS still selects an SCPC unit, by the year 2012. ¶156 While there is also evidence in the record rebutting the charge that various inputs were biased, the above discussion demonstrates that the PSC was aware of the alleged biases in input variables and that even after adjustments were made to account for alleged biases, EGEAS selected a coal-fired baseload plant. As the record is clear that the PSC was aware of these 74 No. alleged biases and made substantial efforts to 2004AP3179 adjust its modeling to correct for any defects, we can find no error in the PSC's use of EGEAS modeling to assess the statutory requirements in § 196.491(3)(d)2.-3. The PSC clearly has discretion over what inputs are utilized for EGEAS modeling. Simply put, this court lacks the technical knowledge and expertise to dictate to the PSC what inputs it must utilize in its EGEAS modeling and the values for those inputs. iii. Least Cost Alternative ¶157 Calpine argues that it is PSC policy to award CPCNs to the least cost alternative, and that in this case, Calpine's natural gas proposal for part of the project was the least cost alternative. its Calpine cites to previous PSC decisions to support argument that the least cost alternative is routinely approved. ¶158 This argument ignores the text of the Plant Siting Law and misconstrues the previous decisions of the PSC upon which Calpine relies. 8. reveals An examination of Wis. Stat. § 196.491(3)(d)2.- that "economics" is but one factor in multifaceted decision-making process the PSC utilizes. indicated in our discussion of the EPL supra, the As we there is significant evidence in the record supporting the decision to use coal power for baseload capacity. ¶159 Contrary to Calpine's argument, prior decisions of the PSC demonstrate determination. that cost is but one factor in the For instance, Calpine relies on the following language from Investigation on the Comm'n's Own Motion, No. 0575 No. EI-112 (Wis. PSC Dec. 28, 1993): "Under the 2004AP3179 Commission's integrated planning and CPCN principles, the least cost overall choice is the option the utility will be authorized to pursue." Id. at 19. context, as stated: lowest However, Calpine immediately takes preceding this that statement statement, out the of PSC "The winner . . . at Stage One, is, by definition, the overall cost alternative the utility has available, considering engineering, economic, health, safety, reliability, Id. efficiency and environmental factors." (emphasis added). Furthermore, the PSC indicated in the same Final Decision that "[t]he bidding consideration process of winning bid(s)." a selected wide range by of the Commission factors in requires selecting the Id. at 23. ¶160 In the present case, the PSC clearly followed its past precedent factors. least of considering all of the statutorily mandated We conclude there was no "practice" of selecting the cost alternative while ignoring the other statutory factors. iv. Natural Gas Baseload ¶161 Calpine also argues that their natural-gas alternative could be operated as a baseload facility and that there was no basis for the PSC's determination that "no gas-fired, baseload facilities were presented." Again, as indicated in our discussion of the evaluation of the EPL, there is significant evidence in the record supporting the decision to use coal power for baseload capacity in this case. Given the abundant evidence supporting the determination that coal power was the only cost76 No. 2004AP3179 effective, technically feasible option for baseload capacity in this instance, we conclude that it was reasonable for the PSC to rule out natural gas as a baseload fuel. ¶162 In sum, we conclude that the PSC's interpretation of the Energies Priority Law and the Plant Siting Law are entitled to great weight substantial deference. evidence exists Further, to support we the conclude various that factual findings made by the PSC in applying the provisions of the EPL and Plant Siting Law in relation to the selection of type of fuel to be used in this project. Finally, we conclude that a rational basis exists to support the PSC's application of these provisions to the facts of this case to select ERGS as a site for new power generation and coal as a baseload fuel source. b. Adverse Impact on Environmental Values ¶163 Calpine also argues that the PSC erroneously failed to apply the portion of the Plant Siting Law relating to consideration of adverse impacts of the proposed project on the environment. Pursuant to Wis. Stat. § 196.491(3)(d)4., the PSC must determine that "[t]he proposed facility will not have undue adverse impact on . . . environmental values . . . ." Although Calpine recognizes that the PSC made this finding, it advances two arguments determination. as to why the PSC could not have made this We reject both of them. ¶164 Calpine first contends that the PSC cannot lawfully make this finding because it has inconsistently applied environmental requirements of Wis. Stat. § 196.491(3)(d)4. the For support, Calpine marshals a total of two prior CPCN proceedings 77 No. 2004AP3179 involving two of Calpine's facilities, the Fond du Lac Energy Center and a proposed "Sherry plant." Regarding the Fond du Lac Center, Calpine claims that the PSC required Calpine to submit a full characterization of the effluent stream from the facility including composition, flow rates, temperature, and proposed water treatment chemicals and also required Calpine to confirm that all such characteristics were in compliance with applicable federal and state requirements. ¶165 Regarding the Sherry plant, Calpine argues that the DNR required nonproject Calpine to alternatives examine the (such as use the of certain practicality off-site of using another site already approved by the PSC) and alternative power sources at the Sherry site. that the analysis PSC should for ERGS have so To be consistent, Calpine claims required that the a PSC commensurate could have level of clearly demonstrated that ERGS would meet the requisite environmental standards. ¶166 We agree with the PSC that nothing in these two prior proceedings mandates how a Wis. Stat. § 196.491(3)(d)4. analysis is to occur in all cases. Requiring additional information in one project does not necessarily mean it is required in all. Given the particulars of these massive projects, and given the PSC's expertise in handling what specifics ought to be examined in a CPCN proceeding, we must defer to the PSC's determination of what information is required for it to make the required findings under § 196.491(3)(d)4. 78 No. 2004AP3179 ¶167 Calpine's second argument is that the PSC improperly delegated its ultimate determination of "no undue adverse impacts" under Wis. Stat. § 196.491(3)(d)4. to the DNR.37 PSC's final decision recognizes that continuing regulatory review by the DNR. ERGS remains The under The PSC noted that certain aspects of ERGS still required regulatory approvals from the DNR, and therefore, the PSC only conditionally issued the CPCN. This court has previously concluded that "an agency may assume that any environmental consequences will be controlled through compliance provisions." with the applicable administrative code State ex rel. Boehm v. DNR, 174 Wis. 2d 657, 676, 497 N.W.2d 445 (1993).38 ¶168 Additionally, this court has already recognized DNR's special expertise on environmental matters. Decade, Inc. v. DNR, 115 Wis. 2d 381, 398, 340 the Wis. Envtl. N.W.2d 722 37 Even under DNR consideration, Calpine claims that aspects of ERGS's once-through cooling system cannot comply with legally recognized environmental standards (including water intake standards and thermal plume requirements) and that ERGS had yet to be shown to comply with wetland regulations. However, the PSC notes that on January 12, 2005, the DNR published notice of its intent to issue the Wisconsin Pollutant Discharge Elimination System (WPDES) permit for the ERGS facility. See DNR Public Notice of Intent to Reissue a WPDES Permit, No. WI0000914-07-0. The PSC also notes that the DNR has found that ERGS complies with wetland requirements. In the Matter of Waterway and Wetland Alterations Relating to the Wisconsin Electric Power Co. Oak Creek Power Plant Expansion, Called the Elm Road Generating Station, Nos. 3-SE-01-41-0005-0019 & 1456MW (Nov. 22, 2004). 38 We note that State ex rel. Boehm v. DNR, 174 Wis. 2d 657, 497 N.W.2d 445 (1993), concerned whether to compile an EIS in the first instance. 79 No. (1983). expertise finding 2004AP3179 Thus, it is not error for the PSC to rely on the DNR's and regulatory under approval process when Wis. Stat. § 196.491(3)(d)4., determinations are forthcoming.39 making even if its those Therefore, we reject Calpine's contention that the PSC erred by issuing the CPCN by failing to make the required findings under § 196.491(3)(d)4. c. Effect on Wholesale Competition ¶169 Calpine argues that Wis. Stat. § 196.491(3)(d)7., the which PSC incorrectly requires the applied agency to conclude that "[t]he proposed facility will not have a material adverse impact on competition in the relevant wholesale electric service market" in order to grant a CPCN. After reviewing the PSC's discussion of the wholesale competition provision in the Final Decision, we reject these arguments and conclude Calpine fails to show the PSC's application of Wis. Stat. § 196.491(3)(d)7. was unreasonable. ¶170 In determination its Final under Decision, the PSC stated Wis. Stat. § 196.491(3)(d)7. that requires a an analysis of "market power," which it defined as "the ability of a firm to charge prices for its product above what a competitive market would allow." The PSC first noted that its analysis needed to focus only on horizontal market power issues because vertical market power issues were 39 mitigated by the Midwest At least with respect to ERGS's once-through cooling, the PSC's order stated that should the DNR determine that ERGS is unpermittable, WEC would then be required to submit a revised project application for approval that redesigns or relocates ERGS as needed. 80 No. 2004AP3179 Independent System Operator's control over the ATC transmission system. The PSC then cited a 2000 "market power study" for the conclusion against that market the agency's power. The rate PSC reviewing also noted power that mitigated the Federal Energy Regulatory Agency allows WEPCO to sell in the Wisconsin Upper Michigan (WUMS) wholesale electric service market only at cost-based rates. ¶171 In response to concerns that "approval of ERGS would have a material adverse impact on competition by preventing the development of a competitive wholesale generation sector and hindering further electric industry restructuring in Wisconsin," the PSC noted that WEPCO planned to continue contracting for power with independent power producers, and that W.E. Power LLC, the non-utility affiliate that would have majority ownership of the corporations that would construct and own ERGS, "could more easily be divested by WEC than generating assets that are held within WEPCO, should a future legislature split generating plant assets away from utilities." ¶172 Calpine argues that the PSC incorrectly applied the wholesale competition provision because the PSC abandoned its focus on entry of competitors as the "primary factor" in applying the provision, and that the PSC relied only on its rate review authority, which does not prevent a material adverse impact on competition. i. Entry of competitors as primary factor ¶173 Calpine argues that previous PSC Final Decisions have emphasized the need for competitors in the wholesale electric 81 No. service market. 2004AP3179 For instance, Calpine cites Joint Application of Mirant Portage County LLC and Am. Trans. Co. LLC, No. 05-CE116 (Wis. PSC Mar. 22, 2002) where the PSC stated: "The record shows that an adverse effect on competition is unlikely because the Mirant Portage County power plant project would essentially act as a new entrant. . . . Consequently, the Portage County project would be adding a new competitor to WUMS, and thereby likely improving the competitive market." Id. at 10. Calpine also relies on Application of Fond du Lac Energy Center, LLC, No. 9343-CE-100 (Wis. PSC May 5, 2003), where the PSC stated: The record shows that an adverse effect on competition is unlikely because, even with the addition of the Fond du Lac Energy Center, Calpine will remain a relatively small operator of power plants in Wisconsin. . . . In summary, even though WUMS is a highly concentrated wholesale electric service market, the fact that Calpine's Fond du Lac Energy Center will act as a new entrant means that the facility is unlikely to have a material adverse impact on competition in WUMS. Id. at 13-14. ¶174 Calpine asserts Wis. Stat. § 196.491(3)(d)7. that is the flawed PSC's because analysis ERGS does of not introduce new competitors, while Calpine's proposal would have increased competition in the state. It argues that the focus on entry by of fostering competitors is competitive supported marketplaces the state's as policy stated Wis. Stat. § 133.01: 133.01. Legislative intent. . . . It is the intent of the legislature to make competition the fundamental economic policy of this state and, to that end, state regulatory agencies shall regard the public interest 82 of in No. 2004AP3179 as requiring the preservation and promotion of the maximum level of competition in any regulated industry consistent with the other public interest goals established by the legislature. ¶175 We find Calpine's arguments unpersuasive. The plain language of the provision rebuts the assertion that "introducing competition" is the standard under Wis. Stat. § 196.491(3)(d)7., as the provision states only that a facility cannot have "a material adverse impact Wis. Stat. § 133.01 § 196.491(3)(d)7. states on the specifically competition." general policy addresses context of CPCN determinations. of While the competition state, in the Where two statutes apply to the same subject, the more specific controls, and this is especially true where the specific statute is enacted after the general statute. Martineau Wis. 2d 443, 449, competitors can be 175 one v. State N.W.2d 206 way in Conservation (1970). which the While Comm'n, 46 introducing requirement of "no material adverse impact" can be met, it is not the only way to meet the requirement, as other PSC decisions demonstrate. ¶176 For example, in the Port Washington Order, the PSC stated: Capacity and energy from the PWGS facility will be provided to WEPCO via the Facility Lease, at rates this Commission regulates through its review of the lease s economic terms and conditions. This regulation prevents any material adverse impact on competition in WUMS. As the market power study conducted for the Commission in 2000 by Tabors, Caramanis and Associates found, fixed price contracts such as the proposed Facility Lease, mitigate market power. In addition, the Federal Energy Regulatory Commission only allows WEPCO to sell in WUMS at costbased rates. 83 No. 2004AP3179 . . . WEPCO plans to continue contracting for power with IPPs, obtaining up to 1,000 MW of capacity from these providers. Furthermore, a stand-alone generation company such as W.E. Power LLC could more easily be divested by WEC than generating assets that are held within WEPCO, should a future legislature split the generating plant assets away from utilities. For these reasons, the Commission finds that approval of the PWGS project will not create material adverse impacts on competition. Port Washington Order, at 24. ¶177 Likewise, in its Weston Order, the PSC stated: Wis. Stat. § 196.491(3)(d)7. requires the Commission to discern whether the addition of Weston 4 to WPSC's electric supply portfolio would have a material adverse impact on competition in the relevant wholesale electric service market. The Commission finds it would not. Prices, terms, and conditions of the capacity and energy being sold to native load customers will be regulated by the Commission. Weston Order, at 19-20. previously has These examples indicate that the PSC concluded that the wholesale competition requirement was met based on factors other than the "introducing competitors" rationale. ii. Reliance on rate review authority ¶178 Calpine argues that the PSC erred by reasoning that its rate reviewing power mitigated against market power. It contends the rate reviewing authority does not encourage the entrance of competitors. We reject Calpine's argument because as we concluded above, an application for a CPCN need not prove that the plan will introduce competitors into the wholesale electric service marketplace in order to meet the requirement in Wis. Stat. § 196.491(3)(d)7. that 84 the "proposed facility will No. not have a material adverse impact on 2004AP3179 competition" in that agency's rate market. ¶179 Calpine next argues that using the reviewing power as a basis for meeting the wholesale competition requirement in Wis. Stat. § 196.491(3)(d)7. is in error because it renders § 196.491(3)(d)7. superfluous. In re Disciplinary Proceedings Against Trewin, 2004 WI 116, ¶38, 275 Wis. 2d 116, 684 N.W.2d 121 (2004) ("'It is a cardinal rule that when interpreting a statute a court must attempt to give effect to every word, so as not to render any portion of the statute superfluous.'")(citation omitted). wholesale Calpine argues that if the competition requirement in § 196.491(3)(d)7. can be met by the PSC's duty to regulate rates, then § 196.491(3)(d)7. is "mere surplussage." ¶180 We reject this argument because we conclude that the PSC did not rely solely on its rate reviewing authority for its conclusion that the wholesale competition requirement was met. The PSC's rate reviewing power was one basis noted in the Final Decision that mitigated against market power. The PSC also noted that the Federal Energy Regulatory Agency allows WEPCO to sell in WUMS only at cost-based rates and that WEPCO planned to continue contracting for power with independent power producers. Further, the PSC noted that W.E. Power LLC, the non-utility affiliate that would have majority ownership of the corporations that would divested construct and own ERGS, "could by WEC than generating assets that more are easily held be within WEPCO, should a future legislature split generating plant assets 85 No. away from utilities." 2004AP3179 The PSC cited all of these factors as reasons it concluded ERGS would not materially harm competition, so the argument wholesale that competition PSC's rate review requirement is alone not satisfies supported by the the record.40 ¶181 In sum, we reject Calpine's arguments that the PSC incorrectly applied Wis. Stat. § 196.491(3)(d)7. determination here. to its CPCN We conclude Calpine fails to show the PSC's application of Wis. Stat. § 196.491(3)(d)7. was unreasonable. d. Common Systems Approval ¶182 As previously noted, WEC's CPCN application originally proposed two SCPC units and a single IGCC unit. these units designed to would involve service all building three certain proposed Construction of "common units. systems" The PSC ultimately approved the construction of only the two SCPC units. However, in its final decision and order, the PSC approved the construction of "common systems" capable of supporting a system output greater than that of the two SCPC units. The PSC reasoned: 2009 In approving construction of the SCPC units for and 2010, the Commission must ascertain the 40 Calpine indicates that in at least one previous CPCN proceeding the PSC required an affiliate of a utility to submit to a market power screen analysis because of concerns about market power. See Application of Alliant Energy Resources, Inc., No. 9349-EB-100 (Wis. PSC Dec. 20, 2002). Calpine does not develop an argument explaining why the market power analysis is necessary or even contend that the PSC was required to order the analysis here. We will not address undeveloped arguments. See Barakat, 191 Wis. 2d at 786. 86 No. 2004AP3179 appropriate costs to be placed into each Facility Lease as the "Approved Amount." ERGS includes common facilities that would serve 1,800 MW of new coal-fired capacity as well as 1,200 MW of existing coal-fired capacity from OCPP, i.e., a 3,000 MW "campus" at this site. Although the Commission has rejected the IGCC unit, it finds that a 3,000 MW coal campus remains an appropriate size, because it affords future planning flexibility to WEC. The additional cost of sizing common systems at 3,000 MW, instead of 2,400 MW, is approximately $20 million, which is a modest amount to pay in order to provide additional planning flexibility. Thus, the application PSC's order construct to final an provided IGCC that unit is "[a]lthough denied, [WEC] the may construct common facilities with the SCPC units to accommodate up to 3,000 MW of generation at this site." ¶183 The circuit court vacated the PSC's order to the extent that it approved construction of "common systems" not necessary to operate a 2,400 MW facility. noted that while the PSC's order The circuit court demonstrated "prudent foresight," authorization of the construction of these common facilities was error because "there is to be no construction of any generating facility until there has been the issuance of a CPCN" pursuant to § 196.491(3). by approving the common The circuit court stated that facilities, the PSC was forcing ratepayers to bear the cost of a facility for which a CPCN had not been issued. Additionally, the circuit court stated that allowing construction of these facilities would unduly influence the site selection for any future proposed utility construction. ¶184 Clean Wisconsin urges this court to affirm the circuit court's order, arguing that 87 the PSC's order violated No. § 196.491(3)(d)2.-3. and that the "PSC has 2004AP3179 effectively predetermined that additional coal units at this location are in the public interest, without considering alternative sites, at the same time that it explicitly determined that another coal unit is not in the public interest." Br. at 49. Clean Wisconsin's Resp. In contrast, the PSC and WEC argue that the PSC did not approve a new facility without a CPCN; rather, it merely authorized the construction of systems to service the two plants for which it did issue a CPCN and allowed those systems to accommodate future expansion. The PSC and WEC argue there is nothing in § 196.491 that prohibits the PSC's action in this regard. We conclude that the PSC's approval of the common systems was not contrary to law and had a rational basis. ¶185 First, we reject the suggestion of Clean Wisconsin and the circuit court that by authorizing the construction of common systems with excess capacity the PSC approved an additional facility without issuing a CPCN in violation of the Plant Siting Law. There is no dispute that the PSC would be required to issue a CPCN for the construction Wis. Stat. § 196.491(3)(a)1. of However, a the third "facility." common systems approved by the PSC are not a "facility," which is defined as "a large electric generating transmission line." facility or a Wis. Stat. § 196.491(1)(e).41 41 high-voltage The "common In contrast, WEC's third proposed plant, the IGCC, which was not approved by the PSC, would have required a CPCN in order to be approved. Likewise, the PSC would be required to comply with all applicable laws and issue a CPCN for any proposed future facility at the Oak Creek Site. 88 No. 2004AP3179 systems" to which Clean Wisconsin objects include "a cooling water structure Michigan and which also will coal extend handling from the site facilities." onto There Lake is no dispute that this equipment is required to operate the two SCPC power plants the PSC approved. The PSC simply authorized WEC to size this equipment to support capacity in excess of the output of the two § 196.491(3) SCPCs. Simply prohibits the put, PSC nothing from in the authorizing text of integral components of a "facility" for which it issues a CPCN to be sized so as to support added capacity. ¶186 As the PSC's order does not contravene the express language of § 196.491(3), we must assess whether the PSC had a rational basis for authorizing some of the components of the SCPCs to be sized so as to support added capacity. order stated: The PSC's "The additional cost of sizing common systems at 3,000 MW, instead of 2,400 MW, is approximately $20 million, which is a modest amount to pay in order to provide additional planning flexibility." would be more cost In essence, the PSC concluded that it effective to allow WEC to build needed systems larger than are necessary at the present time rather than requiring the construction of duplicate systems at a higher cost should there be a future expansion at the Oak Creek site. This clearly constitutes a rational basis for the PSC's order. 89 No. 3. 2004AP3179 Environmental Impact Statement ¶187 Clean Wisconsin argues the PSC and DNR's EIS42 did not adequately required consider by the the environmental Wisconsin impacts Environmental Wis. Stat. § 1.11. of Policy ERGS, Act as (WEPA), We disagree. ¶188 "The of purpose WEPA is to insure that agencies consider environmental impacts during decision making." 174 Wis. 2d at 665. the-board That purpose includes effecting an across- adjustment of priorities processes of state agencies. 79 Wis. 2d 409, Boehm, 416, 256 in the decision-making Wis. Envtl. Decade, Inc. v. PSC, N.W.2d 149 (1977) (WED III). WEPA "requires that agencies consider and evaluate the environmental consequences that of alternatives consideration in the Boehm, 174 Wis. 2d at 665. available framework to them provided and by undertake [§ 1.11]." WEPA constitutes a clear legislative declaration that protection of the environment is an essential mandate state of every policy. directly control state WED agency III, agency 79 and an Wis. 2d at discretion; essential 416. rather, component WEPA it does represents of not an 42 The PSC and DNR jointly prepared the EIS, with the PSC functioning as the lead agency. See Wis. Admin. Code § PSC 4.60(3). An EIS is "an environmental analysis which is prepared to inform decision-makers and the public of a proposed action's effect on the environment, and develops, describes and evaluates alternatives in the detailed statement required by s. 1.11 Stats." Wis. Admin. Code § NR 150.02(11) (Jan., 2003). All subsequent references to Wis. Admin. Code § NR 150 are to the January 2003 version unless otherwise indicated. 90 No. important procedural decision-making step process. agencies Id. must If the take 2004AP3179 during adverse their environmental consequences of the proposed action are adequately evaluated, WEPA does not values outweigh Methow Valley prevent ("[National the an agency from environmental Citizens Council, Environmental determining costs. 490 Policy See U.S. Act] that other Robertson 332, 351 merely v. (1989) prohibits uninformed rather than unwise agency action.").43 ¶189 The purpose of the EIS is to enable agencies to take a "hard look" action. at the environmental Milwaukee Brewers consequences Baseball Club of a proposed v. DHSS, 130 Wis. 2d 56, 72, 387 N.W.2d 245 (1986); WED IV, 98 Wis. 2d at 690. To the extent that relevant information is complete and available,44 the EIS "shall evaluate reasonably foreseeable, 43 Because WEPA was patterned on the National Environmental Policy Act (NEPA), 42 U.S.C. § 4332 (1970), federal law construing NEPA is persuasive authority. See Wis. Envtl. Decade, Inc. v. PSC, 79 Wis. 2d 161, 174, 255 N.W.2d 917 (1977) (WED II). 44 If information is incomplete or unavailable, the shall: 1. Indicate the availability of the information. 2. Describe the information's relevance. 3. Summarize available, credible scientific evidence that is relevant to the evaluation. 4. Evaluate effects based upon theoretical approaches or research methods generally accepted in the scientific community. Wis. Admin. Code § PSC 4.30(b)1.-4. 91 EIS No. significant effects to the human Wis. Admin. Code § PSC 4.30(1)(b). EIS is set forth in the 2004AP3179 environment . . . ." The required content of an administrative regulations. See Wis. Admin. Code § PSC 4.30(3); Wis. Admin. Code § NR 150.22(2). ¶190 This court's review of an EIS is narrow. The PSC's determination that an EIS is adequate is a conclusion of law to which this court accords great weight Util. Bd., 211 Wis. 2d at 550. deference. Citizens' As such, it is not our role to evaluate the adequacy of the EIS; we instead evaluate whether the PSC's determination that Id. at 553-54. reasonable. demonstrating that the the EIS was adequate was Clean Wisconsin bears the burden of PSC's determination that the EIS was adequate was without a rational basis. ¶191 Aside from these principles, we are also mindful that "[n]o matter how exhaustive the discussion of environmental impacts in a particular EIS might be, a challenger can always point to a potentiality that was not addressed." While reasonable alternatives are to be Id. at 554. considered, every potentiality need not be evaluated, as "[t]he duty of an agency to prepare an EIS does not require it to engage in remote and speculative Wis. 2d at analysis." 72 (citing Milwaukee Vermont Brewers Yankee Baseball Nuclear Power Club, Corp. 130 v. Natural Resources Defense Council, Inc., 435 U.S. 519 (1978)). We must assess an EIS in light of the "rule of reason," which requires an EIS "to furnish only such information as appears to be reasonably necessary under the circumstances for evaluation of the project rather than to be so all-encompassing in scope 92 No. 2004AP3179 that the task of preparing it would become either fruitless or well nigh impossible." New York v. Kleppe, 429 U.S. 1307, 1311 (1976); See also Milwaukee Brewers Baseball Club, 130 Wis. 2d at 72. With these principles in hand, we now turn to Clean Wisconsin's arguments. a. Cost Effectiveness of Lower Emitting Alternatives ¶192 Clean Wisconsin argues that the EIS did not analyze the availability and cost effectiveness alternatives to ERGS's SCPC units. of lower emitting Clean Wisconsin claims that ERGS will emit approximately two billion pounds of pollutants into the air over a projected 50 years of operation. As a consequence, Clean Wisconsin contends that the EIS was required to take a hard look at SCPC technology and consider whether alternative, cleaner technologies such as wind, natural gas, or IGCC could be used at a reasonable cost instead of coal-fired technology utilized in ERGS. We conclude that there was a rational basis for the PSC to conclude that the EIS adequately addressed these concerns. ¶193 Chapter 4 of the EIS is devoted effectiveness of lower-emitting alternatives.45 to the cost Our review of that section reveals that the PSC considered the environmental effects of taking no action, increasing energy efficiency (through conservation, load management, and fuel switching), the 45 Although Clean Wisconsin criticizes the PSC's EGEAS modeling, we have already concluded that the choice of variables utilized in EGEAS is a matter left to the sound discretion and expertise of the PSC. 93 No. environmental costs of renewable fuel sources 2004AP3179 (wind, solar, hydro electric, biomass, and biogas sources), as well as natural gas as alternatives to ERGS. alternatives is extremely Wisconsin's particular Most of the data concerning these technical. complaint, With and regard as a to Clean distilled illustration, we note the EIS evaluated wind generation, both from on and offshore locations. The EIS explained that after considering the overall costs of wind generation (the credit to reserve margin, capital, and operating and maintenance costs, a capacity of 35 percent assuming a 16 mph wind at 100 meters two miles offshore, and the speculative continuing viability of the federal product tax credit for wind generation of $18 per MWh, adjusted for inflation), it is not likely capable of replacing ERGS as a stand-alone alternative. Applying great weight deference, we conclude that the PSC's determination that this evaluation was adequate is reasonable. ¶194 Regarding the consideration of natural gas, we note that the EIS evaluated Calpine's 523 MW natural gas plant proposal, as well as the consequences of a 30-year expansion that relied exclusively on natural gas.46 Also, the EIS included an appendix incorporating another EIS completed for Calpine's 46 We understand Clean Wisconsin's argument to require that natural gas always be selected over lower priority alternatives, notwithstanding the need for adequate supply or other countervailing considerations. We have already concluded that the PSC may take into account the reasonable needs of the public for an adequate supply of electric energy and that the PSC's choice of variables for EGEAS forecasting was reasonable. 94 No. 2004AP3179 Fox Energy Center, a 530 MW natural gas power plant. See also Wis. Admin. Code § PSC 4.60; WED III, 79 Wis. 2d at 424 n.14 (agency should not ignore previous investigations). The Fox Energy Center EIS noted that "project emissions from a natural gas-fired plant operating 100 percent of the time are much lower for most criteria pollutants than a similarly sized coal-fired power plant using the SCPC technology." Comparing the coal- fired ERGS with the 1050 MW natural gas-fired Badger Generating Plant, the Fox Energy Center EIS noted that emissions of NOx, CO, PM10, SO2, ammonia, and VOC (volatile organic compounds) are all significantly lower in the similarly sized natural gas plant. The Fox Energy Center EIS also noted that CO2 emissions from a 500 MW natural gas-fired combined-cycle plant would be about 450,000 tons per year compared to about 3.5 million or more tons per year for a 600 MW coal plant. ¶195 However, the EIS nevertheless concluded that because of the "extreme volatility" of natural gas prices, and the need for predictable planning, a natural gas alternative to ERGS was not cost effective. that the EIS Thus, there is a rational basis to conclude adequately addressed reasonable natural gas alternatives to ERGS. ¶196 Finally, deficient because Clean it Wisconsin failed to argues evaluate that the the EIS effects constructing enough IGCC units to equal ERGS's capacity. was of The EIS did note that EGEAS modeling demonstrated that the single 600 MW IGCC unit that was initially proposed as part of ERGS was not cost-effective. Given that the PSC determined that one IGCC 95 No. 2004AP3179 unit was not cost effective, the PSC's decision not to evaluate a number of IGCC units in the EIS was not unreasonable. In addition, we note that there was no IGCC proposal submitted that would rival ERGS, and an EIS does not have to engage in remote or speculative analysis. Wis. 2d at 72. determination Milwaukee Brewers Baseball Club, 130 We the that therefore EIS conclude adequately that discussed the PSC's natural gas alternatives was reasonable. b. Once-Through Cooling ¶197 Next, Clean Wisconsin contends that the EIS failed to analyze alternatives to ERGS's once-through cooling a process that would aspirate cold water from Lake Michigan, cycle it through the plant for cooling purposes, and then dispel it back into Lake Michigan and failed to analyze the impacts this would have on Lake Michigan. draw an enormous The once-through cooling process would amount of water from Lake Michigan (approximately 740,000 gallons per minute), which would possibly kill millions of aquatic organisms every year. notes that including there cooling are alternatives towers (that to withdraw this Clean Wisconsin cooling less water process, and also reuse the water) and dry cooling (that uses very little water and would have virtually no adverse aquatic impacts). Clean Wisconsin also notes that the last coal-fired power plant that was built (in Pleasant Prairie) uses cooling towers. to Clean Wisconsin, alternatives the constitutes EIS's a failure fundamental to According discuss violation of these WEPA. Calpine also adds that the EIS failed to discuss the cumulative 96 No. impacts of ERGS's once-through cooling. 2004AP3179 We disagree with both arguments. ¶198 At analyzed the the outset, we note that consequences of the once-through EIS thoroughly cooling. The EIS examined a monitoring study completed in the mid-1970s of the effects of OCPP's once-through cooling system on Lake Michigan. After noting the large number of aquatic organisms that were impinged and entrained due to this technology,47 the EIS observed that the study ultimately concluded that once-through cooling has "inconsequential" effects on overall affected populations' ecosystems.48 The EIS commented that the monitoring report determined: The absolute magnitude of the number of fish, larvae, or eggs impinged or entrained is not a measure of the significance of the impact. Rather, the losses must be evaluated relative to the sizes and productivity of the affected populations. The report concluded that, relative to the Lake Michigan fishery, the impacts of entrainment and impingement were inconsequential to aquatic life in Lake Michigan. The DNR concurred with that conclusion. 47 Impingement occurs when fish and other aquatic life are trapped against cooling water intake screens that remove debris from the cooling water as it enters the intake system. In contrast, entrainment occurs when aquatic organisms, eggs, and larvae are drawn into a cooling system, through the heat exchanger, and then pumped back out to the water. 48 According to the one-year monitoring study conducted from March 1, 1975, through February 29, 1976, of the old OCPP plants, 6,202,407 fish larvae, 9,281,370 eggs, and 15.6 million invertebrates were entrained, and 2,754,118 fish weighing 109,414 pounds were impinged at the plant during the sampling period. 97 No. 2004AP3179 ¶199 Regarding the discharged water, the EIS also indicated that a study of once-through cooling at the OCPP site along with several other studies for large power plants on Lake Michigan conducted in the 1970's "concluded that operation of the power plants did not significantly affect fish populations in the general vicinity surrounding each facility, or in the far-field areas that were studied beyond thermal plume limits." Further, the EIS stated that "[t]hese studies indicated that both the individual water and the discharges insignificant, distribution aggregate on and and impacts the were Lake limited periphyton of power plant cooling Michigan ecosystem were localized shifts fish to growth in in areas immediately what constitutes associated with the thermal plumes." ¶200 Different minds can disagree on "inconsequential" effects, but we are not making a qualitative assessment of our own, nor are we independently reviewing the PSC and DNR's conclusion. Instead, we are merely looking for whether there is a rational basis for the PSC to conclude that the EIS took a "hard look" at the environmental effects of the once-through cooling system. We conclude that there is. If the adverse environmental consequences of once-through cooling are adequately evaluated, WEPA does not prevent an agency from determining that other values outweigh the environmental costs. See Robertson, 490 U.S. at 350. is intertwined considerations, with we Because the adequacy of the EIS factual, will defer 98 value, to and those public policy agencies whose No. responsibility it is to make those 2004AP3179 determinations. See Citizens' Util. Bd., 211 Wis. 2d at 552. ¶201 In addition to the studies from the 1970s, the EIS considered and discussed current data concerning the effects of the proposed once-through cooling structure. The EIS stated: In February 2003, the applicants submitted a report, titled "Oak Creek Power Plant and Proposed Elm Road Station Cooling Water Intake and Lake Monitoring Study, February 2003." The report described the results from the first year of a two-year program, which will be used to determine the abundance of fish eggs and larvae in the vicinity of the existing onshore intake structure and the site of the proposed new off-shore intake structure. The data presented in this and the final report will be used to help establish location, design, and operational parameters for achieving compliance with the impingement and entrainment reduction criteria in the proposed EPA regulations for intake structures at existing facilities. This report summarized data from icthyoplankton collections collected from June through September 2002, at transects near the present intake . . . and the site of the new intake . . . . This data clearly shows a marked reduction in total icthyoplankton densities at the 40 ft contour (the depth of the probable new intake structure site) in comparison to near-shore contours. Offsetting the benefit of the reduced icthyoplankton density at the far-shore intake site is the fact that the cooling water demand would increase incrementally as new units are added to the intake. The second phase of the study will involve near-shore and far-shore icthyoplankton collections from early May through September, 2003. Off-shore icthyoplankton sampling will be focused more precisely at the proposed intake location. This February report gave calculated intake velocities at the present nearshore structure ranging from 0.5 to 1.8 ft/second (one to four pumps, respectively). The 99 No. 2004AP3179 proposed design velocity at the entrance to the proposed offshore structure (whether consisting of intake cribs or velocity caps) is 1.0 ft/second; however, a velocity range of 0.5 ft/second to 1.0 ft/second is under consideration as detailed design for the caps or cribs is finalized. It should be noted that limiting intake velocity is not the sole factor in determining how best to design an intake structure to minimize adverse environmental impacts to fish and other aquatic life. If the velocity is reduced, there is a proportional increase in the intake area needed. This would require additional cribs or caps. Since the location selected is a sandy featureless area of the lake bottom, the potential impacts of adding more structure to the lake bottom must be weighed against the potential benefits of reducing the approach velocity. Based on Electric Power Research Institute report [a report drafted in December of 2000], a velocity of 1 ft/second has the potential to pull in salmon that are less than 10 cm in total length. This is based on EPRI's review of all published or otherwise available fish swim speed data. These data generally show that small (under 10 cm in length) salmon have sustainable swimming speeds that are less than 1 ft/second. Small salmon greater than 10 cm in length size have swimming speeds that are typically greater than one ft/second. Thus, these larger fish should be able to avoid the currents surrounding the intake structure caps/cribs. Data are not available for trout, but the swimming speeds are expected to be similar to salmon. If fish enter the tunnel and reach the pumphouse, fish removal will occur at the traveling water screens. The traveling water screens for this project have not yet been selected, but there are designs and operations (low pressure and/or continuous screen wash) that can increase fish survival if impingement occurs. (Footnote omitted.) ¶202 In addition to the above in-depth discussion concerning the effects of the intake component of the proposed once-through cooling system, the 100 EIS similarly discussed the No. 2004AP3179 effects of the water discharge component of the proposed oncethrough cooling system. Potential impacts discharge structure For example, the EIS provided: of construction of the water The impacts to Lake Michigan from the construction of the discharge structure include temporary impacts such as local increases in turbidity within the water column, reductions in local dissolved oxygen levels, and the reductions in local light penetration. The construction of the discharge structure would also temporarily disrupt and possibly destroy the local flora, fauna and aquatic habitat, including fish. Measures such as silt curtains or turbidity barriers would be required to reduce the extent of these temporary impacts. The long-term effects of the placement and operation of the discharge structure include a loss or modification to the existing aquatic and nearshore habitat area, and changes to local water quality. If the discharge structure is placed north of the existing coal dock the presence of the discharge structure may disrupt local wildlife species which utilize the sand beach in this area and would likely require more frequent maintenance dredging of the discharge channel due to littoral drift in this area. Potential impacts of operation of the water discharge structure The anticipated maximum flow through rate for each SCPC unit and the IGCC is 485,000 gpm with a temperature rise of 12 [degrees] F. The maximum heat rejection rate for the three units combined would be 8,740 million BTU/h. The primary effluent from the OCPP is once-through cooling water from the steam condensers. No chemicals are added to the water; therefore, temperature is the only water quality parameter significantly affected by the discharge of cooling water. Heated effluent from the two proposed SCPC units would be discharged north of the coal dock through either a single or combined outfall structure or combined with the SCPC outfall. 101 No. 2004AP3179 . . . . Zebra mussel control At the lake bottom intake structure, the only option for zebra mussel control would be manual cleaning by divers. The intake drop shafts and tunnels should not have significant zebra mussel accumulations because velocities would be too high (over six feet per second) for mussel settlement to occur. Pump house wet wells, frames for the traveling water screens, pump bell housings and other on-shore equipment would also need to be periodically cleaned. Plant service water would be treated using the copper ion generator that has been successfully used at the existing OCPP units 5-8. This device involves the electrolytic dissolution of a low level of copper ions and also releases an aluminum floc. Parts-per-billion levels of copper cause the mussels to be agitated and the inside of the plant water system becomes less habitable. Mussels likely would continue to free float through the system and ultimately be returned back to the lake. Furthermore, the aluminum floc forms a coating inside of piping, heating exchangers and other equipment using service water which helps inhibit zebra mussel settlement. The copper ion generator is located downstream of the traveling water screens. Condenser cooling water zebra mussel treatment is not anticipated based on operational experience at other WEPCO facilities on Lake Michigan. This could differ at the ERGS units depending on the water quality from the off-shore intake location and metallurgy of the condenser tubing. At this time, there is not a specific plan for controlling zebra mussels in the condenser cooling water. ¶203 In concerning sum, the the EIS contained environmental impacts a of plethora the of proposed data once- through cooling system, including both older and newer studies of the likely environment. effects of the system on the local aquatic In addition to noting a variety of likely adverse 102 No. environmental system, the impacts EIS of also the proposed discussed proposed 2004AP3179 once-through remedial strategies to lessen the projected effects.49 cooling action and We conclude that the data and factual findings contained in the EIS concerning the projected adverse environmental consequences of the oncethrough cooling system allowed the PSC to take a "hard look" at the environmental consequences of this proposed action, Milwaukee Brewers Baseball Club, 130 Wis. 2d at 72, and provided it with a rational basis to conclude that the EIS adequately described the effects of once-through cooling. We again emphasize that the EIS is an informational tool that does not compel a particular decision by the agency or prevent the agency from concluding that other values outweigh the environmental consequences of a proposed action. ¶204 The EIS also acknowledged that coal-fired plants could be constructed using cooling towers, although the efficiency of such plants would likely be reduced. 49 Commenting on the draft The final EIS also provided: Currently, US EPA and the DNR disagree on which regulation, "new facility" or "existing facility" is applicable to the ERGS. It has been the DNR's position that the proposed "existing facility" regulation is applicable to the ERGS project. . . . The EIS states that, regardless of the characterization of the proposed units as new or existing under the 316(b) requirements, the WPDES permit will require Best Technology Available (BTA). BTA requirements should minimize impingement and entrainment. 103 No. EIS, several possibilities entities50 to requested once-through that the cooling. EIS 2004AP3179 discuss The EIS other writers responded: Once through cooling water and closed-cycle cooling are commonly used cooling alternatives. WEPCO has proposed to use once-through cooling water for the ERGS. The Clean Water Act does not prohibit the use of once-through cooling water, nor does it compel anyone to use closed-cycle cooling. DNR does not have the authority to require closed-cycle cooling for this project. In addition, the EIS explained that it would be premature to discuss the comparative effects of once-through cooling versus closed-cycle cooling or cooling towers until the DNR and EPA agree on the BTA to which the ERGS facility would be held.51 50 The entities include: The Lake Citizens' Utility Board, and S.C. Johnson. Michigan Federation, 51 Pursuant to the "new" requirements for existing generation facilities, BTA is determined by the EPA on a caseby-case basis, considering a variety of site-specific factors: The phrases "best available demonstrated technology"; and "best available technology" like "best technology available" in CWA section 316(b) are not defined in the statute. However, section 304 of the CWA specifies factors to be considered in establishing the best practicable control technology currently available, and best available technology. . . . . For "best available technology," the CWA directs EPA to consider: The age of equipment and facilities involved, the process employed, the engineering aspects . . . of various types of control techniques, process changes, the cost of achieving such effluent reduction, 104 No. 2004AP3179 ¶205 While an EIS should analyze reasonable alternatives to the proposed action and discuss measures that can mitigate environmental harm, it is not required to discuss unreasonable alternatives. 72. Milwaukee Brewers Baseball Club, 130 Wis. 2d at We construe the EIS's writers' response as concluding that cooling towers are not a reasonable alternative due to the DNR's inability to require concluded that until them. The EIS writers the and DNR determined EPA essentially the BTA applicable to the ERGS facilities, it would not be reasonable to discuss some alternatives the DNR require through its permit process. would not be empowered to See Citizens' Util. Bd., 211 Wis. 2d at 556 ("Section 1.11, Stats., does not require an agency to 'engage in remote and speculative analysis[.]'"). non-water quality environmental impacts (including energy requirements), and such other factors as [EPA] deems appropriate. 33 U.S.C. § 1314(b)(2)(B). Section 316(b) expressly refers to section 301, and the phrase "best technology available" is very similar to "best technology available" in that section. These facts, coupled with the brevity of section 316(b) itself, prompted EPA to look to section 301 and, ultimately, section 304 for guidance in determining the "best technology available to minimize adverse environmental impact" of cooling water intake structures for existing Phase II facilities. National Pollutant Discharge Elimination System Final Regulations to Establish Requirements for Cooling Water Intake Structures at Phase II Existing Facilities; Final Rule, 69 Fed. Reg. 41,576, 41,583 (July 9, 2004)(to be codified at 40 CFR pts. 9, 122-125). 105 No. Given that the PSC is best situated to 2004AP3179 determine what constitutes a reasonable alternative, we cannot conclude that the PSC's determination that this analysis is reasonable lacks a rational basis. See id. at 553, 560 (PSC may rationally limit its EIS discussion to what it found was reasonably necessary to meet present needs). ¶206 Regarding the EIS's discussion of mitigating the harm from the another once-through criticism cooling that the process, draft EIS the EIS did not responded to sufficiently discuss once-through cooling or how it can be deemed to be "best technology available." The EIS stated: EPA has promulgated regulations for cooling water intake structures for new facilities, and has proposed regulations for cooling water intake structures for existing facilities. Both the promulgated 316(b) regulations for new facilities and the proposed 316(b) regulations for existing facilities provide for sitespecific alternatives to the use of a cooling tower. Currently, US EPA and the DNR disagree on which regulation is applicable to the ERGS facilities. It has been the DNR's position that the proposed "existing facility" regulation is applicable to the ERGS project. The EIS states that, regardless of the characterization of the proposed units as new or existing under the 316(b) requirements, the WPDES permit will require Best Technology Available (BTA). If ultimately the DNR and EPA agree that the intake should be regulated under the promulgated "new facility" regulation, then WEPCO would request a sitespecific determination of the BTA. At that juncture, the DNR would require the comparative impact analysis of closed versus open cycle cooling. If ultimately the DNR and EPA agree that the intake should be regulated under the proposed "existing facility" regulation, then the DNR will require WEPCO to demonstrate that the location, 106 No. 2004AP3179 design, and operation of the intake will reduce fish and shellfish impingement mortality by 80 to 95 percent and entrainment by 60 to 90 percent. Fish deterrent systems, barrier nets, modified Ristroph screens with fish return systems, aquatic filter barriers, variable speed pumps, fine mesh traveling screens, angled and modular inclined screens, and low pressure spray washes may be used. Siting of the intake is also critical for minimizing impingement and entrainment. In general, the littoral zone of large lakes, such as Lake Michigan, serve as the principal spawning and nursery area for most species of freshwater fish, and is considered one of the most productive areas of the waterbody. The placement of the intake structure beyond the littoral zone should reduce impingement and entrainment. The 2002/2003 study that WEPCO is currently conducting is intended to be part of that demonstration. If WEPCO is unsuccessful in demonstrating the percent reductions, it would seek a site-specific determination of BTA. At that juncture, the DNR would require the comparative impact analysis of closedversus open-cycle cooling. (Final two emphases added.) ¶207 The EIS's recognition that the applicants will have to work with the EPA and DNR to achieve BTA regardless of whether the facility is considered "new" or "existing" demonstrates how the intake structure will have to mitigate harm. validly approved by the agency even though further development of mitigation measures." An EIS "may be conditioned on County of Bergen v. Dole, 620 F. Supp. 1009, 1061 (D.N.J. 1985). Because the environmental evaluation process is a continuing one, "it is not necessary, nor is it possible, that every detail be contained in the [EIS]. General commitments to future action suffice to meet mitigation requirements." Id. Therefore, it is reasonable to 107 No. conclude that this particular commitment to 2004AP3179 interagency cooperation with the DNR and EPA satisfies the EIS's mitigation assessment obligation. c. Alternatives to OCPP Site ¶208 Clean Wisconsin also contends that the EIS failed to analyze alternatives to the OCPP site. We do not agree. ¶209 As the EIS noted, the site selection process started with over various 140 potentials. social, Due to environmental, 55 screening technical, criteria and of economic considerations, that number was narrowed down to five: Pleasant Prairie County); (in Kenosha County); Haven (in Sheboygan Ozaukee (in Ozaukee County); Little Suamico (in Oconto County); and North Oak Creek (in Milwaukee County), also known as the OCPP. ¶210 The sites in Ozaukee and Little Suamico were eliminated due to the increased cost of acquiring substantial amounts of land greenfield sites. irregular available. shape and the environmental impact of developing The Haven site was rejected because of its and because once-through cooling was not Similarly, the Pleasant Prairie site was eliminated because it could not accommodate all of ERGS's facilities and because cooling towers would have to be constructed given the significant distance from Lake Michigan. See Custer County Action Ass'n v. Garvey, 256 F.3d 1024, 1041 (10th Cir. 2001) ("Alternatives that do not accomplish the purpose of an action are not reasonable."). 108 No. ¶211 Upon possible evaluating sites near the the North southern Oak end Creek of property in Racine County were identified. 2004AP3179 site, other WEPCO-owned OCPP All of these sites, which shared the advantages of once-through cooling and use of existing transmission and rail line infrastructure, were the sites that were eventually identified in the CPCN application: One of the proposed sites is in the city of Oak Creek in Milwaukee County at the east end of Elm Road, north of the existing OCPP. This site is referred to as the North Site throughout this EIS. A second site, the South Site, is located south of the existing OCPP along the lakeshore. A variation of the South Site was proposed as the applicants' third site alternative. For purposes of description and analysis in this document, this alternative will be referred to as South-Exp Option. ¶212 Clean Wisconsin renews its argument that these OCPP sites are not alternatives. We have previously determined that it was reasonable for the PSC to consider the OCPP alternatives as "alternative sites." The EIS noted some of the distinctions between the sites that we discussed supra: "1) having building footprints in different municipalities and counties resulting in different entities receiving shared-revenue payments if the ERGS proposal locations, is approved, and 3) 2) separate significant service differences in water the discharge amount of excavation required to build and safely operate the facilities." The EIS proceeded to analyze the sites' existing structures and general topography, as well as how the terrain will have to be redesigned and augmented to accommodate ERGS. In addition, the EIS noted significant differences in wetland impacts among the 109 No. OCPP alternatives and differences impacts, such as air quality. is a rational basis to in other 2004AP3179 environmental Thus, we are satisfied that there conclude that the EIS adequately considered alternate sites. d. Air Pollution ¶213 Clean Wisconsin's next argument is that the EIS fails to present sufficient information regarding ERGS's adverse impacts with regard to health consequences from air pollution. WEPA requires an EIS to disclose any significant health consequences of a proposed action's environmental impacts. See Baltimore Gas & Elec. Co. v. NRDC, 462 U.S. 87, 106-07 (1983) (concluding that "NEPA requires an EIS to disclose the significant health, socioeconomic, and cumulative consequences of the environmental impact of a proposed action"). We are satisfied that the PSC had a rational basis for concluding that the EIS adequately discussed ERGS's health impacts. ¶214 Chapter 7 of the EIS discussed the air emissions from ERGS and the general health and environmental concerns related to these pollutants. has particulate For example, the EIS noted that not only matter been correlated with increased hospitalizations for asthma attacks, worsening of lung disease, and heart disease, it has also been estimated to cause over 15,000 premature deaths in the United States per year. ¶215 Regarding the effects of NOx, the EIS stated: High levels of NO2 may be fatal to humans, while lower levels affect the delicate structure of lung tissue. Humans exposed to high concentrations suffer lung irritation and potential lung damage. Long-term lower 110 No. 2004AP3179 levels of exposures can destroy lung tissue, leading to emphysema. Concentrations of NOx as low as 0.1 ppm, can cause lung irritation and measurable decreases in lung function in asthmatics. Children, the elderly and people with lung diseases, such as asthma, emphysema or bronchitis are sensitive to NOx. ¶216 Similarly, regarding SO2, the EIS stated: Sulfur dioxide causes a wide variety of health and environmental impacts because of the way it reacts with other substances in the air. SO2 irritates the respiratory system and can cause pronounced health problems. Sulfate particulates are a primary factor in the production of hazy atmospheric conditions. Acid rain is caused by SO2 and NOx reacting with other substances in the air (see Acid Rain section). Corrosion and damage to metals and masonry may also result from increased sulfur dioxide emissions. Severe health effects are associated with increased sulfur dioxide emissions. Peak levels of SO2 in the air can cause breathing difficulty for people with asthma. Long-term exposure to high levels of SO2 gas and particles may cause respiratory illness and aggravate existing heart disease. Sulfate particles are associated with increased respiratory symptoms, respiratory disease, and premature death. Exposure to high concentrations of sulfur dioxide for short periods of time can constrict the bronchi and increase mucous flow, making breathing difficult. Children, the elderly, those with chronic lung disease, and asthmatics are especially susceptible to these effects. 111 No. 2004AP3179 In comparable fashions, where possible, the EIS also discussed acid rain, greenhouse gases (as they relate to global warming), VOCs, HAPs (hazardous air pollutants), and mercury.52 ¶217 Moreover, in response to a specific request that the EIS "[p]rovide information on the human health effects, morbidity, and mortality related to the emission of the proposed ERGS facilities," the EIS added: The chemicals found in emissions from coal-fired power plants are known to adversely affect the respiratory system (as well as have other effects), depending on the concentrations and the duration of exposure. Several scientific studies in recent years have found a relationship between increased levels of air emissions from these types of sources and increased respiratory symptoms. This means that people with existing lung diseases such as asthma, bronchitis, emphysema, and other diseases could experience an increase in the severity and frequency of symptoms as a result of increased emissions. There is evidence in the scientific literature that increases in particulate matter levels can also cause morbidity and mortality as well. Infants and children breathe in more air per pound of body weight and are perhaps more susceptible due to developing immune and nervous systems and other factors related to growth. Children can also be more active and spend more time outdoors and experience increased exposure to outdoor air 52 Mercury has received considerable attention lately. Indeed, one commentator critiqued the draft EIS for failing to more carefully evaluate the effects of mercury on marine life and fish consumption advisories. The EIS candidly observes that the "scientific understanding of the impact of mercury emissions on the environment is still developing, [therefore] a specific answer to these questions is not possible." See Izaak Walton League of America v. Marsh, 655 F.2d 346, 377 (D.C. Cir. 1981) ("So long as the environmental impact statement identifies areas of uncertainty, the agency has fulfilled its mission under NEPA."). 112 No. 2004AP3179 pollution as a result. In addition, mercury is emitted from coal-fired combustion. Mercury has been associated with neurological and other effects (here the main exposure route is through ingestion of fish). In summary, there are numerous hazardous air pollutants released into the air from coal combustion. Past DNR analyses have evaluated the virgin fossil fuel exemption and found that, from the inhalation perspective, the risks resulting from well controlled facilities with tall stacks are low. Thus, a facility that meets applicable Wisconsin DNR requirements would not be likely to cause a significant inhalation risk. It is also true however, that as concentrations of air pollutants increase, even if they are below a federal or state standard, that there is a likelihood of increased respiratory symptoms and other adverse health effects occurring. For example, in the case of fine particulate matter (PM2.5), when US EPA evaluated the available data on health effects vs. exposure, there was no clear threshold that defined a safe vs. unsafe level of exposure. ¶218 We agree with the PSC that the EIS's evaluation constituted a hard look at the environmental health consequences from ERGS's air pollution emissions. Although Clean Wisconsin may take issue with the PSC's failure to somehow quantify the precise health determination impacts that the of ERGS, EIS we adequately find that evaluated the the PSC's health impacts of ERGS was reasonable. e. Effects of Transmission System ¶219 Given the significant concentration of baseload power generation at the OCPP site, Clean Wisconsin asserts that there will be considerable strain on the high voltage transmission system, which would inevitably require upgrades that would not be required if the generation was located elsewhere. Because of the massive construction that will be required to complete these 113 No. 2004AP3179 improvements, Clean Wisconsin contends that the EIS was required to consider the accompanying environmental consequences. To the extent that it could, the EIS does do this. ¶220 Insofar as Clean Wisconsin s arguments relate to problems that will arise with ERGS construction, chapter 6 of the EIS discussed issues pertaining to transmission lines. In that chapter, the EIS described the necessary interconnections, the substation changes that will have to occur on the OCPP site, possible issues, system-wide including transmission associated projects, solutions stability ongoing and and studies. Recognizing that certain transmission improvements could change after further study, the EIS assumed that ERGS will need a major new transmission line to connect to the electric system. The EIS noted that rebuilding existing transmission line rights-ofway minimizes adjusted environmental to the barrier of effects, "because the right-of-way land and right-of-way is already disturbed to some extent." uses have because the In contrast, should new lines need to be constructed, the EIS explained that the level of environmental effects will vary, depending on the location of the new right-of-way and the design of the structures. ¶221 Insofar future problems consequences those are that merely as Clean that the Wisconsin s may arise answers to potentialities and those that argument the problems may come relates to environmental could to pose, fruition; possibilities that an EIS is not legally required to consider. See Milwaukee Brewers Baseball Club, 130 Wis. 2d at 72. 114 Given No. the little available information regarding 2004AP3179 the required transmission lines at the time the EIS was drafted, we conclude that the PSC's determination that the discussion is adequate is reasonable. f. Assessment of Wetland Impacts ¶222 Clean Wisconsin also argues the EIS is deficient in its assessment of wetland impacts. We again disagree. ¶223 Chapter 8 of the EIS discussed a variety of wetland issues, including the potential impact of ERGS. the eventual site chosen, the EIS quantified Depending on the estimated wetland acres that would be filled (to create berms and for grading) and Chapter 8 the and corresponding chapter 10 wetland (entitled reduction "Land percentage. Resources") also discussed the secondary impacts on surrounding wetlands. The EIS recognized that at the time of its drafting, no mitigation plans or strategies had been proposed that would minimize the consequences of placing fill in wetlands. ¶224 Even absent mitigation plans, and regardless of the site chosen at OCPP, the EIS considered that four of the eight wetlands would remain unaffected, while the remaining four would be reduced anywhere from 12-20 percent. Therefore, we conclude that conclude the PSC had a rational basis to the EIS was adequate with regard to wetland impacts. g. Responsiveness Summary ¶225 Lastly, Clean Wisconsin maintains that the EIS's responsiveness summary is inadequate. However, this argument is little its more than an adornment 115 of previous arguments, No. 2004AP3179 particularly its contentions that the EIS did not adequately discuss cooling towers, mitigation measures, and health-related impacts from air pollution. We have already rejected these arguments above, and therefore, we do not address them further here. ¶226 We once again emphasize that our review of the EIS adequacy findings. determination is not a review of the PSC's Citizens' Util. Bd., 211 Wis. 2d at 550. factual Because the PSC's determination of the adequacy of the EIS represents its conclusion that the requirements of Wis. Stat. § 1.11 have been met on the facts before it, we defer to the PSC as the agency whose responsibility it is to make that determination. 552. Id. at In sum, we conclude that the PSC's determination that the EIS was adequate is reasonable. 4. Conditional Issuance of CPCN ¶227 Clean Wisconsin argued to the circuit court that the PSC improperly necessary "issued" permits the from Wis. Stat. § 196.491(3)(e).53 CPCN the The before DNR as circuit vacated the PSC's order on that ground. WEC obtained required court agreed all by and Before this court, the PSC argues that the circuit court's holding was erroneous. We agree, and therefore reverse the circuit court's holding as to the legitimacy of the PSC's issuance of the CPCN conditioned on the future action of the DNR. 53 We note since this court heard oral argument, all necessary permits for the construction of the proposed plant have been issued, although legal challenges to some permits are still pending. 116 No. 2004AP3179 ¶228 In order to obtain a CPCN, a utility must navigate the stringent procedural requirements of Wis. Stat. § 196.491. statute requires the PSC and DNR to operate in This tandem to accomplish the legislative goal of approving a utility s plan to construct a new facility capable of generating over 100 MW of electric power. Given the mammoth scope task, the timeline is tight. of that regulatory The following time requirements apply to the interplay between the DNR permitting process and the PSC's CPCN decision. ¶229 First, at application, the engineering plan." least utility 60 days "shall before provide filing the [DNR] a CPCN with Within Wis. Stat. § 196.491(3)(a)3.a. an 30 days of receiving the engineering plan, the DNR must respond with a list facility. required Id. of permits to construct the utility must apply for Wis. Stat. § 196.491(3)(a)3.b. receiving the "completeness" the proposed Twenty days after the DNR provides the list of permits, permits. required permit applications, determination, and 120 the Thirty the DNR days identified days must after a after make a favorable completeness determination, the DNR must take final action on the applications. Id. Thus, theoretically the DNR permit approval process should take, at most, 200 days from the filing of the engineering plan to the DNR's final action. ¶230 The soonest the applicant may submit the CPCN application to the PSC is 60 days after the initial submission of the engineering Wis. Stat. § 196.491(3)(a)3.a. plan to the DNR. Thirty days after the applicant 117 No. submits the CPCN application, determination is due. the PSC's 2004AP3179 completeness Wis. Stat. § 196.491(3)(a)2. ¶231 Upon pronouncing the application "complete," the PSC has 180 days to approve Wis. Stat. § 196.491(3)(g). the This completed period may court order, for an additional 180 days. application. be extended, Id. by Thus, the PSC approval process theoretically takes, at most, 210 days, or 390 days if the PSC receives a court-ordered extension. ¶232 The PSC must remain cognizant that it "may not issue a certificate of public convenience and necessity under this subsection until the [DNR] has issued all permits and approvals identified in the listing specified in par. (a)3.a. that are required prior to construction." Wis. Stat. § 196.491(3)(e). ¶233 Theoretically, this should not be an obstacle, because the DNR must act within 200 days after the utility files the engineering plan, or 140 days after the utility files the CPCN application with the PSC. action, the PSC should Therefore, at the time of DNR final still have at least 40 days (and potentially as many as 220 days) to finish its evaluation of the application. ¶234 However, the closely interrelated nature of the legislative timelines means that the PSC's timeline is at the mercy of permits. any difficulties that arise in obtaining the DNR In reality, these two separate timelines do not always march in lockstep. For example, the utility often must submit several different permit applications to the DNR. In this case, the DNR required separate permits for air pollution impacts, a 118 No. site grading permit, a stormwater related permits and approvals. permit, and 2004AP3179 other water- If even one of these permit approvals falls behind schedule, it is possible, as happened here, that the DNR will not have fully acted at the time when the PSC must make a final decision on the CPCN application. This lag example, in the the DNR timeline may can occur determine for that many one reasons. particular For permit application is not "complete," thus setting back the timeline applicable to that particular permit. ¶235 If, for whatever reason, the DNR permits are timely issued, the PSC is placed in a precarious position.54 not If the PSC's time limit elapses before final DNR action, the PSC effectively has four options: 1) deny the application; 2) take no action, and thus passively allow the CPCN to become effective by operation of law;55 3) unconditionally approve the application in violation of its statutory duties; or 4) conditionally approve the application. ¶236 In this case, it is undisputed that the applicant had not obtained all the required DNR permits at the time the PSC issued its "final decision."56 The PSC chose the fourth option 54 Unlike the CPCN, the DNR permits do not automatically issue if the DNR does not act within the statutory time limit. Compare Wis. Stat. § 196.491(3)(g) with Wis. Stat. § 196.491(3)(a)3.b. 55 Pursuant to Wis. Stat. § 196.491(3)(g), if the PSC fails to take final action, it "is considered to have issued a [CPCN] with respect to the application." 56 Application of Wis. Elec. Power Co., No. 05-CE-130 at 1, 53-54 (Wis. PSC Nov. 10, 2003). 119 No. listed above; it conditionally approved the CPCN. 2004AP3179 In its final decision, under the heading "Certificate of Public Convenience and Necessity," commence the PSC construction of stated: two 615 "W.E. Power LLC . . . may MW . . . electric generating units, as described in WEC's project application and modified by this Final Decision . . . ." Application of Wis. Elec. Power Co., No. 05-CE-130 at 56 (Wis. PSC Nov. 10, 2003). conditioned its approval of the CPCN as follows: The PSC "This Final Decision takes effect on the day after it is mailed. The CPCN for the ERGS facility takes effect only when the DNR issues all permits and approvals that it Wis. Stat. § 196.491(3)(a)3.a., as construction of the facility." identified, being pursuant required prior to to Id. at 62. ¶237 Upon reviewing the order, the circuit court determined that the PSC acted improperly: [Wisconsin Stat. § 196.491(3)(e)] plainly states that the Commission shall not do what is being done here, issue the CPCN before the regulatory permits have been obtained . . . . Potentially, this is a matter of substantial consequence. The Commission in its Order notes the possibility that [if] the planned draw of 1.4 billion gallons of Lake Michigan water daily is not approved, cost of the proposal will escalate by some $200 million and may even preclude project viability. The approval stated in the Order was issued in clear violation of sec. 196.491(3)(e), Wis. Stats. It is the Order of this court that the PSC Order is hereby vacated and the matter remanded to the Commission to permit the applicant to demonstrate that the required regulatory permits have been obtained. ¶238 On appeal, the PSC raises two theories to justify its action and explain why it believes 120 the circuit court is No. mistaken. actually 2004AP3179 First, the PSC argues that its final decision did not "issue" the CPCN; utility's CPCN application.57 rather, it simply approved the Second, and alternatively, the PSC argues that it gave "full effect to the statute" by issuing the CPCN but staying its effectiveness until the DNR issued the necessary permits. ¶239 We implicitly RURAL, 239 Wis. 2d 660. rejected the PSC's first argument in In RURAL, the PSC approved a CPCN with the condition that "RockGen Energy shall obtain from [the] DNR all permits and approvals that are required before beginning any construction." Id., ¶58. The court determined that this approach, "a conditional order," effectively "issued" the CPCN. See id., ¶¶16, 58, 61. ¶240 Our RURAL opinion did not fully explain the reason for its use of that terminology, so that we here proceed to make explicit what is implicit in RURAL. that the CPCN did not "issue" If we agreed with the PSC until the DNR permits became effective, we would effectively be amending the statute to allow the PSC to extend the time limit within which it must finally 57 Clean Wisconsin notes that the PSC did not raise this argument before the circuit court, and so we could consider it waived. We decline to do so, as the issue has been fully briefed and argued, and there are no factual disputes. See Wirth v. Ehly, 93 Wis. 2d 433, 443, 287 N.W.2d 140 (1980). 121 No. act to approve or deny a utility's application. 2004AP3179 We decline to do so.58 ¶241 We contemplates agree only with one Clean Wisconsin decision by the that PSC. the If statute the PSC's decision did not take effect until after the DNR's final action, the PSC's "final decision" would not be final. be an interim endorsement issuance of the CPCN. anticipating the The statute is clear: final action within the statutory time period. hold that the PSC's final decision Rather, it would final action: the PSC must take Accordingly, we conditionally issued the CPCN. ¶242 Alternatively, the PSC argues that if the court finds, as we do, that its decision "issued" the CPCN, such conditional issuance was the only way for the PSC to reasonably harmonize and give full effect to the language in § 196.491(3)(e), the impending statutory timelines, adequate energy supply. and the need to maintain an In arguing this point, both parties rely on the RURAL decision. ¶243 In RURAL, the court evaluated the PSC's action on a CPCN application submitted under the nonstatutory provisions of 1997 Wis. Act 204, § 96. Those provisions decreased the time 58 It has long been the position of this court that in a general sense, statutes creating time limits, such as statutes of limitation, "should not be extended by judicial construction." Gutter v. Seamandel, 103 Wis. 2d 1, 24, 308 N.W.2d 403 (1981) (quoting Pugnier v. Ramharter, 275 Wis. 70, 77, 81 N.W.2d 38 (1957)). Although the instant case does not involve a statute of limitation, we find that the underlying principle is the same. 122 No. 2004AP3179 limit within which the PSC had to make a final determination on a CPCN application from 180 days to 90 days; however, the provisions applied for only a limited time and with respect to only certain eastern Wisconsin utilities. 204, § 96. See 1997 Wis. Act At the end of the 90-day period, the DNR had not acted with respect to one permit. RURAL, 239 Wis. 2d 660, ¶60. As it did in the instant case, the PSC conditionally issued the CPCN. Id., ¶58. ¶244 On review, the appellant environmental group that by so doing, the PSC violated § 196.491(3)(e). This court disagreed, "given the particulars of this case. . . . PSC strictly complied with argued [H]ad the Wis. Stat. § 196.491(3)(e), the result would have defeated, rather than fulfilled, the purpose of § 96 and Act 204." the PSC's method: Id., ¶59. Instead, the court approved "We believe that the PSC took an approach that not only harmonized the conflicting mandates of § 96 and Wis. Stat. § 196.491(3)(e), but expedite of the capacity." construction also fulfilled much-needed the electric purpose to generation Id., ¶61. ¶245 The PSC cites this language as evidence of the court's recognition of the PSC's power to condition a CPCN upon the DNR's issuance of the required permits. RURAL appeared to limit its holding: However, the court in "Where the PSC has before it an application to process according to the longer timeline in Wis. Stat. § 196.491(3), the PSC should, and could, comply with subdivision (e)." presented here. Id., ¶59. The PSC That is exactly the situation basically 123 argues that this single No. sentence from RURAL is inconsistent with the 2004AP3179 rest of the opinion, and asks us to withdraw it as dicta because the RURAL court's concern about harmonizing the statute and the need for reliable energy generation applies similarly to applications made under § 196.491. ¶246 We conclude that great weight deference is appropriate as to this issue. First, the legislature has specifically charged the PSC with the interpretation of chapter 196. Under Wis. Stat. § 196.02(1), the PSC "has jurisdiction to supervise and regulate every public utility in this state and to do all things necessary and convenient to its jurisdiction." ¶247 Second, unlike the situation in RURAL, the PSC is not interpreting nonstatutory provisions of a recently passed act. Instead, it is applying § 196.491(3)(e), which it has exclusively administered since that statute's enactment in 1975. Before the circuit court, the PSC reiterated: "[T]he commission's interpretation of the law that describes when DNR permits should be issued has been its standard practice for many years and remains its standard practice today. . . . [W]e always stay the execution of our CPCN orders until after the necessary DNR permits have been received." ¶248 Third, there is no dispute that the agency employed its expertise interpretation. and specialized knowledge in forming this Fourth, while we may not necessarily agree that the PSC's interpretation of the statute is the best available, we conclude that it will provide "uniformity and consistency" in the application of the statute 124 in that the PSC, the DNR, No. 2004AP3179 utilities, and the public have a standard rule under which to operate. Once we have determined that the PSC's interpretation of this issue is subject to great weight deference, we need merely decide whether that interpretation is "reasonable." Harnsichfeger, 196 Wis. 2d at 661 (collecting cases). ¶249 Therefore, we proceed to evaluate the PSC's interpretation of the statutory language to determine whether it is reasonable. Statutory interpretation begins with the plain language of the statute. State ex rel. Kalal v. Circuit Court for WI Dane County, N.W.2d 110. vacuum; 2004 However, it is provisions. 58, the considered ¶45, statute in the is 271 Wis. 2d 633, not interpreted context of the 681 in a surrounding Id., ¶46. ¶250 It is certainly true, as Clean Wisconsin points out, that the statute says the PSC may not issue the CPCN before the DNR has issued the necessary permits. that the PSC has the Wis. Stat. § 196.395;59 This power, though, power see is to also not However, it also is true issue RURAL, conditional 239 unlimited. orders. Wis. 2d 660, Rather, "the ¶59. power contained in sec. 196.395 to issue conditional . . . orders is subject . . . to the procedural requirements of other provisions of ch. 196, Stats., because they are in pari materia." 239 Wis. 2d 660, ¶59 (quoting 59 Mid-Plains Tel. v. RURAL, PSC, 56 Wisconsin Stat. § 196.395 reads in part: "The commission may issue conditional, temporary, emergency and supplemental orders." 125 No. 2004AP3179 Wis. 2d 780, 787, 202 N.W.2d 907 (1973) (quoting Wisconsin Tel. Co. v. PSC, 232 Wis. 274, 287 N.W. 122 (1939))). ¶251 Clean Wisconsin argues that the PSC's power to issue conditional orders does not extend to waiving the directives of § 196.491(3)(e), materia" because rule that expressed in would RURAL violate and the our "in earlier pari cases. Nevertheless, the RURAL court allowed the PSC to condition CPCN issuance on DNR permit issuance, plainly requirement[] of other provisions of ch. 196." ¶252 These settle the competing question "reasonable." of interpretations whether the a "procedural Id. do not PSC's conclusively interpretation is Accordingly, we proceed to review the legislative history of the statute and the administrative history of the PSC's interpretation in order to determine whether the PSC's present interpretation is reasonable. ¶253 The PSC's interpretation is longstanding and consistent, and in fact predates the passage of the CPCN law. Before 1975 utilities had to obtain a "certificate" from the PSC authorizing them to "commence the construction of any public utility plant, extension Wis. Stat. § 196.49(1) "public convenience (1975). and or The necessity PSC facility . . . ." thus require certified such that work . . . ." Wis. Stat. § 196.49(4) (1975). ¶254 In 1977, considering WEC's 1975 application to construct a coal-fired power plant in Kenosha County, the PSC conditioned its certificate on three prerequisites, including: "That applicant obtain any needed 126 authorization from the No. 2004AP3179 Wisconsin Department of Natural Resources in the areas in which that department has jurisdiction."60 ¶255 The duties of the PSC sharply increased in 1975. that year, the legislature passed Assembly became chapter 68, Laws of 1975. Bill 463, In which The essential language in current § 196.491(3)(e), like most of § 196.491, dates back to that act. read: It has changed little since. "The [PSC] may not issue a In 1975, the provision certificate of public convenience and necessity until the [DNR] has issued all permits and approvals designated under sub. (2m) as necessary prior to the issuance necessity." of the certificate of public convenience and See ch. 68, Laws of 1975. ¶256 One piece of the legislative history of 1975 Assembly Bill 463 seems, at first glance, to run counter to the PSC's interpretation. An early draft of the bill contained the language: A failure of the department to have issued any of the permits or approvals for which preliminary application has been made under par. (a) may not prevent issuance of the certificate of convenience and necessity, but the applicant may not undertake the specific part of the construction or the specific operation until the permit or approval therefor has been granted by the department [of natural resources]. Drafting records, ch. 68, Laws of 1975, on file at Wisconsin Legislative Reference Bureau, Madison, Wisconsin. This language, deleted from a subsequent draft, embodies the approach 60 Application of Wis. Elec. Power Co., 62 Wis. PSC 131, 145 (1977). 127 No. that the PSC now uses. 2004AP3179 The deletion of this language from the draft weighs against the reasonableness of PSC's interpretation of the statute. ¶257 However, the 1975 law as enacted contained a provision authorizing the DNR to waive compliance with § 196.491(3)(e): "At any time prior to the issuance of the certificate of public convenience and necessity, the department may, in consultation with the commission, waive the necessity of obtaining any such permit or approval Wis. Stat. § 196.491(2m) in advance (1975) of such (emphasis certificate." added). This provision established an escape hatch that allowed the PSC to avoid the dilemma that occurs when the PSC's time limit for action draws to a close before the DNR has issued its final decision on the permit applications. ¶258 1997 Wis. Act 204 removed the DNR's authority to waive compliance with § 196.491(3)(e) and reinstated the potential for the PSC to face the present dilemma. Shortly thereafter, the PSC began conditioning CPCN grants on DNR permit approvals; in 128 No. 2004AP3179 fact, within the past five years, almost all its CPCN orders have been so conditioned.61 ¶259 Under these circumstances, we agree with the RURAL court that the PSC's "conditional issuance" approach harmonizes the goal of the statutes with the "purpose [of] expedit[ing] the construction of much-needed RURAL, 239 Wis. 2d 660, ¶61. electric generation capacity." As the court put it: "[T]he PSC reasonably interpreted and applied both § 96(1)(e)3. of Act 204 and Wis. Stat. § 196.491(3)(e) to give them both full effect by issuing utility] the certificate obtain all here with necessary 61 the permits condition prior to that [the starting See, e.g., Application of Mirant Portage County LLC, No. 05-CE-116, at 21 (Wis. PSC Mar. 22, 2002) ("Mirant shall not begin construction on the project until the appropriate DNR . . . permits have been obtained . . . ."); Application of Rock River Energy LLC, No. 9346-CE-100, at 21 (Wis. PSC Sept. 24, 2002) ("The CPCN for the Riverside Energy Center takes effect only after the DNR issues all permits and approvals that it identified, pursuant to Wis. Stat. § 196.491(3)(a)3.a. . . . ."); Application of the Rainy River Energy Corp., No. 05CE-128, at 12 ("The CPCN for the Superior Generation Project takes effect only after the DNR issues all permits and approvals that it identified, pursuant to Wis. Stat. § 196.491(3)(a)3.a. . . . ."); Joint Application of Fox Energy Co. LLC and Am. Trans. Co. LLC, No. 05-CE-115, at 26 (Wis. PSC Nov. 8, 2002) ("Fox Energy shall not begin construction on the project until all air and water permits and approvals that the DNR identified . . . have been obtained . . . ."); Application of Fond du Lac Energy Center, LLC, No. 9343-CE-100, at 18 (Wis. PSC May 5, 2003) ("The CPCN for the Fond du Lac Energy Center takes effect only after the DNR issues all permits and approvals that it identified . . . as being required . . . ."); Application of Madison Gas & Elec. Co., No. 05-CE-121, at 43 (Wis. PSC Oct. 9, 2003) ("This final decision takes effect on the day after it is mailed. The CPCN for the WCCF takes effect when DNR issues all permits and approvals that it identified . . . as being required . . . ."). 129 No. construction." Id. The same is true of interpretation of § 196.491(3)(e) in this case. 2004AP3179 the PSC's Had the PSC simply approved the CPCN without conditions, or through inaction allowed the CPCN to be approved through operation of law, it would have acted § 196.491(3)(e). without regard for It did not do so. the requirements of By conditionally approving the CPCN, it maintained the requirements of that section while simultaneously satisfying the strict time limits of chapter 196. ¶260 The agencies. PSC and the DNR are independent regulatory The PSC has no authority to order the DNR to complete its review by a certain date. Clean Wisconsin argues that if Wisconsin Electric had timely filed all the appropriate permit applications with the DNR, then the DNR would have been forced to take final action before the PSC did. Yet nothing in § 196.491 gives the PSC the authority to extend the statutory time limits based on the applicant's, or the DNR's, failure to act within other time limits. The PSC is limited to the options described above. ¶261 We further PSC's approach works. now issued observe that, practically speaking, the In this case, for example, the DNR has the required permits. The PSC's method prevents applicants from escaping compliance with § 196.491(3)(e) while simultaneously maintaining the reliable supply of energy for the public. The PSC has simply concluded that rather than make an applicant start from scratch and begin the cycle again, it will conditionally issue the CPCN so long as the complied with the other statutory requirements. 130 applicant has This does not No. excuse the applicant from ultimately 2004AP3179 complying with § 196.491(3)(e) and obtaining the necessary permits, and thus, the object of the statute is maintained. ¶262 Under the great weight deference standard of review, our role is not to say whether we believe the PSC's approach is the best way to handle this regulatory issue. deciding whether comports with it the is "a purpose reasonable of the We are limited to agency statute." decision See RURAL, Wis. 2d 660, ¶46 (quoting UFE, 201 Wis. 2d at 286-87). we cannot say that the PSC's approach fails that that 239 Because test, we reverse the circuit court's decision vacating the PSC's order pursuant to this issue. C. Mitigation Payments ¶263 On April 2, 2003, the City of Oak Creek entered into an agreement construction with of WEC ERGS. and The its subsidiaries agreement regarding included the provisions relating to air quality issues, the redevelopment of certain property, payment of mitigation costs, and the compromise of city claims. The agreement noted that "it is anticipated that the construction and operation of the new facilities may have certain effects on the City" and that "in order to mitigate any such effects on the City, WEC and the City desire to enter into this agreement." ¶264 The section of the agreement pertaining to payment of mitigation costs provided, in pertinent part: WEPCO shall support, and shall use its best efforts to have approved, an annual mitigation payment to the 131 No. 2004AP3179 City in the amount of $1.5 million for the first unit (Elm Road Unit 1), $750,000 for the second unit (Elm Road Unit 2), and $250,000 for the third unit (Elm Road Unit 3), respectively (a "Mitigation Payment"). If, and to the extent, approved by the PSCW, Mitigation Payments will be made on a calendar year basis. The first Mitigation Payment for each unit shall be made thirty days after commencement of construction . . . of a unit. Thereafter, Mitigation Payments shall be paid in one annual payment on June 30th each year during the Lease Term. . . . The obligation to pay Mitigation Payments is independent of the receipt of shared revenue funds from the State of Wisconsin and of any future changes in state law pertaining to utility taxation. Notwithstanding anything to the contrary contained herein, in no event will WEC or any of the Subsidiaries have any obligation under this paragraph 3 in the event that (i) the PSCW determines that the payments described in this Section 3 may not be properly included in the rent payments under the Facility Lease, or (ii) a unit of the New Facility permanently ceases operation after start-up and is decommissioned. There is no dispute that the mitigation payments to which the agreement refers will be passed onto ratepayers if the agreement is approved and that the mitigation payment is contingent upon WEC's ability to pass the costs of the payment on to ratepayers. ¶265 In its final decision and order issuing the CPCN, the PSC approved agreement. only partial mitigation payments under this The PSC limited mitigation payments to the period during which ERGS would be constructed, noting that a change in state law pertaining to shared revenue would offset the City's costs once ERGS was constructed: This new shared revenue program commences the annual payments when a generating unit becomes operational. Shared revenue payments to the city of Oak Creek will be $1.6 million for the first SCPC unit and increase to $3.2 million for the second unit. These payments will be added to the shared revenue 132 No. 2004AP3179 payments that the city is currently receiving for the existing OCPP [$750,000 per year]. Under Act 31, the annual state shared revenue payments to the city of Oak Creek when ERGS is completed will exceed the amount the city is requesting in the form of mitigation payments from WEPCO ratepayers. Thus, mitigation payments are not required while compensating shared revenue dollars for ERGS are forthcoming. The shared revenue payments, however, will not begin until 2009 when SCPC 1 is first scheduled to be in service, and the city has introduced evidence that it will begin incurring costs as soon as construction commences. For this reason, the Commission finds it appropriate to authorize annual mitigation payments, as described in the Development Agreement, for the period from the commencement of construction of SCPC 1 until the year when SCPC 2 enters service, which is scheduled for 2010. The shared revenue payments for ERGS that commence in 2009, however, will partially offset the city s costs and it is appropriate to reduce the annual mitigation payment by the amount of shared revenue that the city receives for ERGS. When ERGS is fully in service, the shared revenue payments will fully replace any mitigation payment under the Development Agreement, so any further mitigation payment cannot be billed to WEPCO. If, however, state shared revenue payments decrease during the course of the 30-year Facility Lease and are no longer sufficient to offset fully the mitigation payment that would have been paid under the Development Agreement, the Commission finds it reasonable for W.E. Power LLC to make a partial mitigation payment to the city that equals the remaining portion. ¶266 Following the PSC's final legislature enacted 2003 Wis. Act 89. decision and order, the Section 33 of 2003 Wis. Act 89 created Wis. Stat. § 196.20(7)(2003-04).62 This section provides: 62 All subsequent references to Wis. Stat. § 196.20(7) are to the 2003-04 version. 133 No. 2004AP3179 (a) In this subsection, "mitigation payment" means, as approved by the commission, an unrestricted or recurring monetary payment to a local unit of government in which an electric generating facility is located to mitigate the impact of the electric generating facility on the local unit of government. "Mitigation payment" does not include payments made or in kind contributions for restricted purposes to directly address health or safety impacts of the electric generating facility on the local unit of government. (b) Except as provided in par. (c), an electric public utility may not recover in rates any of the following: 1. The cost of mitigation payments paid by the utility. 2. The cost of mitigation payments paid by the owner or operator of an electric generating facility that the owner or operator recovers from the utility by selling electricity to the utility, by leasing the facility to the utility, or by any agreement between the owner or operator of the electric generating facility and the public utility. (c) The commission shall only approve a mitigation payment agreement that is received by the commission before June 10, 2003, and, if the commission finds the agreement to be reasonable, shall not subsequently modify the agreement. ¶267 The City sought review of that portion of the PSC's order modifying the mitigation payment agreement. addressing this issue, the circuit court noted: The parties agree that the agreement between the City of Oak Creek and WEC was submitted to the PSC before June 10, 2003 and involves a "mitigation payment" within the meaning of sec. 196.20(7), Wis. Stats., as amended by 2003 Wisconsin Act 33. The parties further agree that the treatment of the agreement by the PSC is to be governed by section 196.20, Wis. Stats., as amended by 2003 Wisconsin Act 89, Section 33, effective December 18, 2003 . . . . 134 When No. 2004AP3179 ¶268 The circuit court concluded that under the statute, the PSC was limited to accepting a mitigation payment agreement in whole or rejecting it in whole. Thus, the circuit court concluded that the PSC was without jurisdiction to modify the agreement. As such, it remanded this issue to the PSC to accept or reject the agreement in whole. ¶269 Before this court, the PSC argues that § 196.20(7) does not apply retroactively and that in any event, it does not curtail the PSC's ratemaking authority or require the PSC to approve a mitigation agreement in its entirety. the City argues that the PSC has waived In contrast, any argument that § 196.20(7) does not apply retroactively, as it conceded the applicability of the statute in the circuit court. asserts that § 196.20(7) specifically exempts The City payments "health and safety impacts" from the statutory limitations. for As such, the City argues that the PSC had no authority to review the reasonableness of payments for "health and safety impacts." In the alternative, the City asserts that even if § 196.20(7) is inapplicable, authority the under PSC erroneously exercised Wis. Stat. § 196.37 because its ratemaking there is not substantial evidence to support the conclusion that passing the mitigation payments onto ratepayers would be "unjust unreasonable." ¶270 We begin by first addressing the issue of waiver. The waiver administration, and inherent authority the merits of an rule is a rule of judicial as such, a reviewing court has the to disregard a waiver and address unpreserved issue in exceptional 135 or No. 2004AP3179 cases. Also, Wis. Stat. §§ 751.06 and 752.35 provide a procedural mechanism for discretionary appellate review and reversal on grounds not preserved in the circuit court. Village of Trempealeau v. Mikrut, 2004 WI 79, ¶17, 273 Wis. 2d 76, 681 N.W.2d 190(citation omitted). ¶271 We believe this case to be one of the "exceptional" cases where it is appropriate to relieve parties of any waiver. Given the public importance of the legal issues and ultimate result in this case, it is more important in this instance to settle the legal issues parties to any waiver. PSC to any § 196.37, waiver the City raised correctly, rather than hold We also note that if we were to hold the regarding would be the retroactive precluded from application arguing of that the agreement at issue falls within the exclusion to the statutory definition of "mitigation agreement" circuit court specifically stated: in § 196.20(7)(a). The "The parties agree that the agreement between the City of Oak Creek and WEC was submitted to the PSC before June 10, 2003 and involves a 'mitigation payment' within the meaning of sec. 196.20(7) . . . ." ¶272 Wisconsin Stat. § 196.20(7)(c) commission shall only approve a (emphasis added). provides: mitigation payment "The agreement that is received by the commission before June 10, 2003, and, if the commission finds the agreement to be reasonable, shall not subsequently modify the agreement." There is no dispute that the agreement in this case was received by the PSC before June 136 No. 10, 2003.63 2004AP3179 However, the effective date of 2003 Wis. Act 89 was December 17, 2003, a full month after the PSC rendered its final decision contained and order.64 three Although specific § 51 initial of 2003 Wis. applicability Act 89 provisions, § 196.20(7) was not listed in any of them. ¶273 Simply put, 2003 Wis. Act 89 was not in effect on November 10, 2003, the date the PSC rendered its final decision and order in this case. Thus, there simply was no way the PSC could have evaluated the mitigation payment agreement in this case under the standards set forth in § 196.20(7). Further, there is nothing in the text of 2003 Wis. Act 89 that expressly indicates the legislature intended § 196.20(7) to apply retroactively to PSC orders issued before the Act's effective date. of Likewise, there is no "necessary implication" in the text § 196.20(7) retroactively. that State the v. statute was Chrysler intended Outboard to apply Corp., 219 Wis. 2d 130, 162, 580 N.W.2d 203 (1998). ¶274 That the statute provides the PSC "shall only approve a mitigation payment agreement that is received by the 63 We note that the City's position on appeal is somewhat inconsistent. On the one hand, it argues that Wis. Stat. § 196.20(7) applies to the agreement at issue because the agreement was filed before June 10, 2003. Yet, the City also argues that the agreement at issue is not subject to the provisions of Wis. Stat. § 196.20(7)(c) because the agreement is not a "mitigation agreement" as defined in Wis. Stat. § 196.20(7)(a). 64 Pursuant to Wis. Stat. § 991.11, every act of the legislature takes effect the day after its date of publication unless the act specifically provides otherwise. 137 No. commission implicate" before an June intent 10, that 2003" the does statute not apply 2004AP3179 "necessarily retroactively. Given the effective date of 2003 Wis. Act 89 and the absence of § 196.20(7) from the initial applicability provisions of § 51 of the Act, the only "necessary implication" in the statute is that the statute applies to mitigation payment agreements received by the PSC prior to June 10, 2003, that are considered by the PSC on or after December 18, 2003. A contrary conclusion would require every mitigation payment agreement approved or rejected by the PSC reconsidered. issued prior to Therefore, December we 18, 2003, conclude to be that Wis. Stat. § 196.20(7) does not apply to the agreement at issue in this case.65 ¶275 The City concedes that if § 196.20(7) does not apply to this case, then the PSC decision in relation to the agreement between the City and WEC is to be evaluated under § 196.37, governing the PSC's ratemaking authority. 65 As noted supra, under Even if we assume, arguendo, that the statute does apply retroactively to the PSC's order in this case, under the City's argument, the statute nonetheless would not apply to the agreement at issue here. The City argues that the agreement here is not a "mitigation payment agreement" as defined in § 196.20(7)(a) because the agreement here relates to "health and safety impacts." If we were to accept the City's argument, then § 196.20(7)(c) simply has no bearing in this case because the statute applies only to "mitigation payment agreement[s]." Rather than excepting agreements related to "health and safety impacts" from the reasonableness standard in § 196.20(7)(c), as the City argues, the statute simply does not apply at all to agreements that fail to meet the definition of "mitigation payment agreement" in § 196.20(7)(a). 138 No. 2004AP3179 the agreement, the mitigation payments from WEC are contingent upon the PSC approving the payments as part of WEC's "Facility Lease." Given that the "Facility Lease" is part of WEC's PTF expansion project, which is designed to provide adequate service to ratepayers, the PSC would be required to allow WEC to pass the costs of the lease onto ratepayers, Wis. Pub. Serv. Corp. v. PSC, 109 Wis. 2d 256, 263, 325 N.W.2d 867 (1982), assuming such increased rates were not "unjust" or "unreasonable." Wis. Stat. § 196.37(2). ¶276 Wisconsin Stat. § 196.37(2) provides: If the commission finds that any measurement, regulation, practice, act or service is unjust, unreasonable, insufficient, preferential, unjustly discriminatory or otherwise unreasonable or unlawful, or that any service is inadequate, or that any service which reasonably can be demanded cannot be obtained, the commission shall determine and make any just and reasonable order relating to a measurement, regulation, practice, act or service to be furnished, imposed, observed and followed in the future. ¶277 The determination City agrees under the that in framework analyzing of the § 196.37(2), PSC's the appropriate inquiry is whether the PSC's decision had a rational basis. The PSC's final decision and order notes that due to a substantial change in the state's shared revenue law, the City will receive an annual sum of money exceeding the sum the City would receive from WEC ratepayers once the first proposed power plant is scheduled to be in service. Under the new law, municipalities hosting a power plant are to be paid double and sometimes triple what they receive under the current law. 139 No. 2004AP3179 ¶278 The PSC concluded that "mitigation payments are not required while compensating shared revenue dollars for ERGS are forthcoming." money in The shared PSC further concluded would "partially revenue that the offset increased the city's costs" once the first plant is in service and once both plants were in service "the shared revenue payments will fully replace any mitigation payment under the Development Agreement[.]" The PSC further noted "the annual state shared revenue payments to the City of Oak Creek when ERGS is completed will exceed the amount the city is requesting in the form of mitigation payments from [WEC] ratepayers." appropriate to reduce Therefore, the PSC ruled that "it is the annual mitigation payment by the amount of shared revenue that the city receives for ERGS." ¶279 The PSC, noting the City would incur costs during the construction of ERGS, left intact the mitigation payments in full while reduced the first mitigation SCPC payments is being during constructed the and construction merely of the second SCPC in proportion to the amount of money the City would receive in increased shared revenue. Bearing in mind that one of the purposes of judicial review of final orders of the PSC is to "protect the interests of the ratepayer," Algoma, 91 Wis. 2d at 265, we cannot conclude that the PSC's decision that ratepayers in this state should not be double-taxed for the ERGS project is without a rational basis. ¶280 While the City argues that the costs of ERGS project to the City are far in excess of the amount requested as mitigation payments, the PSC specifically found that "mitigation 140 No. payments are not required while compensating dollars for ERGS are forthcoming." 2004AP3179 shared revenue Given the public hearing testimony that the increased shared revenue payments are "almost exactly the same amount as the city is requesting in the form of mitigation payments[,]" we cannot conclude the PSC's finding was without "substantial evidence." determination that the Therefore, we uphold the PSC's mitigation payments to the City from ratepayers under its agreement with WEC should be reduced in an amount corresponding to the increased receive in the form of shared revenue. monies the City will As such, we reverse that part of the circuit court's decision reversing and remanding this issue to the PSC. V. CONCLUSION ¶281 In sum, we hold as follows. First, we uphold the PSC's determination that WEC's application was "complete." In reaching this conclusion, we hold: that the PSC's determination of reviewable; completeness reasonably is concluded judicially that WEC's application that the PSC contained two distinct site alternatives; that WEC's application contained all necessary information relating to DNR permits; and that WEC's application contained all necessary information relating to transmission line agreements. ¶282 Second, we conclude that the PSC's approval of WEC's CPCN application was not contrary to law or unreasonable. When it approves an application for a power-generating facility like the one WEC proposed, the PSC must interpret, harmonize, and apply the provisions of the EPL, the Plant Siting Law, and WEPA. 141 No. 2004AP3179 Applying a deferential standard of review, we conclude that the PSC reasonably performed all these tasks in issuing the CPCN. We also conclude that the PSC did not exceed its authority in conditionally issuing the CPCN. ¶283 Third, we conclude the PSC did not erroneously reduce the mitigation payments from WEC to the City of Oak Creek, as we conclude this decision was a proper exercise of the PSC's ratemaking authority. ¶284 Thus, we uphold the PSC's order in all respects. By the Court. The decision of the circuit reversed. ¶285 N. PATRICK CROOKS, J., did not participate. 142 court is No. Appendix: 2004AP3179 Glossary of Terms ATC American Transmission Company; owns all transmission assets in eastern Wisconsin. Baseload Capable of producing power effectively on a constant basis, not less than 70 percent of the time, day in day out. Brownfields - Abandoned industrial sites, some of which have actual or perceived environmental contamination. BTA - Best Technology Available. CPCN - Certificate of Public Convenience and Necessity. EIS - Environmental Impact Statement. EGEAS - Electric Generation Expansion Analysis System; a software tool that is used to find least-cost generation system expansion plans. Entrainment occurs when aquatic organisms, eggs, and larvae are drawn into a cooling system, through the heat exchanger, and then pumped back out to the water. 1 No. 2004AP3179 EPA Environmental Protection Agency EPL Wisconsin's Energy Priority Law, Wis. Stat. § 1.12(4). ERGS - Elm Road Generating Station; WEC's proposed power plant. Greenfields Pristine, undisturbed land; as opposed to brownfields. HAPs - Hazardous Air Pollutants. IGCC unit - Integrated Gasoline Combined Cycle Unit, proposed with ERGS. MW Mega-Watt. Impingement Occurs when fish and other aquatic life are trapped against cooling water intake screens that remove debris from the cooling water as it enters the intake system. Market Power Ability of a firm to charge prices for its product above what a competitive market would allow. NEPA - National Environmental Policy Act. NOx Nitrogen Oxides. 2 No. 2004AP3179 OCPP - Oak Creek Power Plant. OCPP property site on which Oak Creek Power Plant is located; ERGS: divided into three individual sites considered for 1) North Site; 2) South Site; and 3) South-Site-Exp. PM Particulate Matter. PTF Power the Future. SCPC units - Super-Critical Pulverized Coal units of ERGS. SOx Sulphur Oxides. VOC Volatile Organic Compounds. WEPA Wisconsin Environmental - Wisconsin Pollutant Policy Act, Wis. Stat. § 1.11. WPDES permit Discharge Elimination System permit issued by DNR. WUMS - Wisconsin Upper Michigan System wholesale electric service market. 3 No. ¶286 LOUIS B. BUTLER, JR., J. our function to determine this 2004AP3179.lbb It is not (concurring). state's energy policy or to decide whether the construction of the power plants here is in the public interest. determinations Majority op., ¶35. assigned to Wis. Stat. § 196.491(3)(d)3. the These are legislative PSC. (2001-02). Id.; We cannot see also substitute our judgment for that of an administrative agency determining a legislative matter within its province. Majority op., ¶35; see City of Beloit v. Town of Beloit, 37 Wis. 2d 637, 647, 155 N.W.2d 633 (1968). ¶287 While I am troubled by the environmental analysis conducted by the Public Service Commission (PSC), particularly with the little information that is set forth in the Environmental Impact Statement (EIS), for me, this is a standard of review case. Our review of an EIS is narrow, and the PSC's determination that an EIS is adequate is to be accorded great weight deference. Majority op., ¶190; see Citizens' Util. Bd. v. PSC, 211 Wis. 2d 537, 550, 565 N.W.2d 554 (Ct. App. 1997). It is not our role to determine the adequacy of the EIS, but we instead evaluate whether the PSC's determination that the EIS was adequate was reasonable. Majority op., ¶190; see Citizens' Util. Bd., 211 Wis. 2d at 553-54. We will sustain the PSC's determination of adequacy unless we are persuaded that there is no rational basis for that determination. Majority op., ¶190; see Citizens' Util. Bd., 211 Wis. 2d at 553. Because I agree with the majority that the PSC's determination that the EIS was 1 No. adequate is reasonable, I join the majority's 2004AP3179.lbb decision and mandate. ¶288 Nevertheless, I write separately because, but for the standard of review, I would conclude that the EIS is premised upon what I construe to be a faulty conclusion which leads to a systemic analytical flaw in the EIS. But for the standard of review, I would conclude that that flaw undermines the adequacy of the EIS regarding the long-term environmental consequences of building the coal-fired power plants. ¶289 Under our narrow standard of review, we have concluded that the EIS thoroughly analyzed the consequences of the power plants' once-through cooling system. Majority op., ¶198. Our conclusion is based in large part upon the fact that the EIS examined a one-year monitoring study in 1975-76 of the then Oak Creek effects Power on Plant's Lake (OCPP's) once-through Michigan. Id. The cooling EIS system's noted that, notwithstanding the loss of millions of aquatic life forms,66 the 1970s monitoring report concluded that the impacts of entrainment and impingement as a result of once-through cooling 66 Impingement occurs when fish and other aquatic life are trapped against cooling water intake screens that remove debris from the cooling water as it enters the intake system. In contrast, entrainment occurs when aquatic organisms, eggs, and larvae are drawn into a cooling system, through the heat exchanger, and then pumped back out to the water. According to the monitoring study, 6.2 million fish larvae, 9.3 million fish eggs, and 15.6 million invertebrates were entrained. Also, 2.8 million fish weighing 109,414 pounds were impinged. Alewife comprised 78 percent of the number impinged, while smelt accounted for 21 percent. Forage fish added one percent and salmonids were negligible. 2 No. 2004AP3179.lbb were "inconsequential" to aquatic life in Lake Michigan. Id. This conclusion in part led to the determination in the EIS that the operation of the power plants did not significantly affect fish populations, and that the individual and aggregate impacts of power plant cooling water discharges on the Lake Michigan Id., ¶199.67 ecosystem were insignificant. ¶290 In reached by my the view, EIS the is problem that they with are the based determinations upon the faulty conclusion that the impacts of entrainment and impingement were "inconsequential" to aquatic "Inconsequential" has been "inconsequent." life in defined as Lake Michigan. "irrelevant" and Webster's Third New International Dictionary, 1144 (3d ed. 1986). The definition of "inconsequent" includes "of no consequence: lacking worth, significance, or importance." Id. "Inconsequential" importance." has The American we allude been further Heritage defined Dictionary, as 314 "lacking (3d ed. 1992). ¶291 When "different minds can in the disagree opinion on to the what fact that constitutes 'inconsequential effects,'" majority op., ¶200, I happen to be one of those different minds. I fail to see how the "wholesale destruction of millions of fish and other aquatic life"68 is of no consequence, irrelevant, and lacking importance. 67 Of course Results of the 1976 OCPP study did notice localized influences on fish distribution, including slight changes in the areal distribution of resident fishes. 68 Bradley, J., dissenting, ¶¶310-11. 3 No. 2004AP3179.lbb there are consequences to losing tens of millions of aquatic life forms comprised of fish, crustaceans and shellfish during a one-year time span. We simply have no way of knowing what those consequences are over time precisely because the EIS assumes that there will be no long-term impacts because the short-term impacts on conclusion, aquatic the life "hard are inconsequential. look" taken by the Given PSC this at the environmental consequences of the OCPP was necessarily limited in its focus as there was no need to look at these that Lake Michigan's the last 30 "inconsequential" consequences over time. ¶292 The ecosystem has dissent changed may be correct significantly Bradley, J., dissenting, ¶316. in years. The dissent is correct that the proposed cooling system is substantially different and much more ambitious than the one examined in 1976. Id. at ¶317. Yet, the EIS does not take into account the long-term cumulative effects that a larger plant will have on that different ecosystem because the EIS accepts the conclusion that any environmental effects are inconsequential. If there are no consequences to the proposed action, then there is simply no need to take a "hard look" at those nonexistent consequences over any extended period of time. ¶293 I do not take issue with our opinion. role to determine the adequacy of the EIS. conclude that there was no rational basis It is not our Because I cannot for the PSC's determination, I cannot substitute my judgment for that of the PSC. The PSC has been authorized to make that determination. 4 No. 2004AP3179.lbb The PSC has teams of environmental experts available to it to assist in making that determination. rests with the PSC. This decision properly Having said that, I still conclude that because that determination rests on a house of cards, I simply do not agree that the EIS was adequate. I am therefore troubled by the result that I am legally compelled to join. ¶294 As I stated during the oral argument in this matter, everything about this case screams of its extreme importance for the state and people of Wisconsin, in terms of its energy needs and the environment. It is far more important that we "get it right and do it correctly," as opposed to just getting this done. The people of Wisconsin, the state's energy needs, and our environment will be best served should the PSC decide to take one more good hard look at long-term environmental consequences while evaluating those consequences (good, bad, or unknown) over consequences. time instead of assuming that there are no That being said, I reluctantly join the decision and mandate of the court, as our standard of review requires. ¶295 For the foregoing reasons, I respectfully concur. 5 No. ¶296 ANN WALSH BRADLEY, J. (dissenting). 2004AP3179.awb Employing the mantra of great weight deference, the majority defers to the Public Service Commission (PSC) in all respects. Yet, an agency's conclusion is not entitled to great weight deference if it directly contravenes the plain meaning of a statute or its own administrative rules. ¶297 This court is burdened with the task of ensuring that the PSC's process meets the statutory and regulatory demands. Because the agency's conclusions regarding the adequacy of the Environmental Impact Statement (EIS) are contrary to the basic requirements of both the PSC's own rules and the Wisconsin Environmental Policy Act (WEPA), I conclude that no deference is due. Rather, I determine that the PSC's decision to approve the project based on an inadequate EIS was in error. ¶298 The proposed Oak Creek Power Plant (OCPP) would be the largest history. power plant Many of construction the briefs project filed in in this this case, state's either challenging or supporting the decision of the PSC, are filed on behalf of those parties who have substantial financial interests in the project. One brief, however, stands alone. ¶299 The State of Illinois has filed a brief on behalf of its citizens because it recognizes that the project's effect would not respect state boundaries. by the project to Lake Michigan Inevitably, any harm caused and its necessarily affect Illinois residents as well. 1 fishery would No. 2004AP3179.awb ¶300 The State of Illinois shares my conclusion that the EIS is inadequate. Citing federal regulations, Illinois asserts that an EIS is expressly required to "present the environmental impacts of the proposal and the alternatives in comparative form, thus sharply defining the issues and providing a clear basis for choice public." among options by the decisionmaker and the 40 C.F.R. § 1502.14. ¶301 Although voicing concerns about the failure of the EIS to consider alternative sources of energy that would reduce mercury emissions, a primary focus of the State of Illinois is the project's proposed cooling system. This type of system has been banned in Illinois for more than 30 years. The State of Illinois charges that the PSC has "declined to conduct even the most basic inquiry into alternatives to the environmentally- destructive cooling system proposed by the applicant, to which Illinois has found decades . . . ." alternatives for more than three In concluding its argument, it asserts that both Illinois and Wisconsin citizens are "entitled to an EIS that gives full consideration to cooling technologies that will reduce damage to their shared Lake Michigan resource." I agree. ¶302 Accordingly, while I believe that the majority opinion in many regards is flawed, I focus upon the inadequacy of the EIS prepared in this case. In its decision, the majority applies a great weight deference standard of review and rubberstamps the PSC's acceptance of the EIS. that its reasonable." "determination that Majority op., ¶226. 2 the The majority explains EIS was adequate is No. ¶303 I am mindful judicial review here. of the narrow 2004AP3179.awb of permissible scope However, an agency's interpretation of a statute or regulation cannot be upheld if it is inconsistent with its plain meaning: A court does not . . . give deference to an agency's interpretation of a statute when the court concludes that the agency's interpretation directly contravenes the words of the statute, is clearly contrary to legislative intent, or is otherwise unreasonable or without rational basis. State ex rel. Parker v. Sullivan, 184 Wis. 2d 668, 699-700, 517 N.W.2d 449 (1994) (citing Lisney v. LIRC, 171 Wis. 2d 499, 506, 493 N.W.2d 14 (1992)). ¶304 I conclude that the PSC's decision to accept the EIS was contrary to the plain language of the law. The EIS (1) failed to adequately evaluate the proposed action's cumulative environmental effects and (2) failed to adequately evaluate reasonable alternatives to the proposed action. I. The EIS ¶305 As noted by the majority, WEPA is patterned after its federal counterpart, (NEPA). Majority op., ¶188 n. 42.69 is to ensure that the National agencies Environmental Policy Act The object of both statutes carefully consider environmental impacts before committing to undertake certain "major" actions. State ex rel. Boehm v. DNR, 174 Wis. 2d 657, 665, 497 N.W.2d 445 (1993); Simmons v. U.S. Army Corps of Engineers, 120 F.3d 664, 69 As a result, federal NEPA case law is an essential source of guidance regarding the proper implementation of WEPA, constituting highly relevant persuasive authority. State ex rel. Boehm v. DNR, 174 Wis. 2d 657, 676 n. 4, 497 N.W.2d 445 (1993). 3 No. 666 (7th Cir. 1997). 2004AP3179.awb To this end, the statutes require agencies to prepare an EIS on actions that would significantly affect the quality of the human environment. Wis. Stat. § 1.11(2)(c); 42 U.S.C. § 4332(c). ¶306 The purpose of the EIS is to enable agencies to take a "hard look" at the environmental consequences of its proposed action. Milwaukee Brewers Baseball Club v. DHSS, 130 Wis. 2d 56, 72, 387 N.W.2d 245 (1986) (citing New York Natural Resources Def. Council, Inc. v. Kleppe, 429 U.S. 1307, 1311 (1976)). This "hard look" is necessary in order to inform the "commission and the public of significant environmental impacts of a proposed methods of effects." its or avoiding and alternatives, minimizing and adverse reasonable environmental Wis. Admin. Code § PSC 4.30(1). ¶307 To sufficient informed action fulfill its information evaluation, function, for and the for the "the general EIS must public decisionmaker set to forth make to an 'consider fully the environmental factors involved and to make a reasoned decision after balancing the risks of harm to the environment against the benefits to be derived from the proposed action.'" Sierra Club v. U.S. Army Corps of Engineers, 701 F.2d 1011, 1029 (2d Cir. insures 1983) the (citations integrity of omitted). the process "In so doing, of decision by the EIS giving assurance that stubborn problems or serious criticisms have not been 'swept under the rug.'" Id. ¶308 This "hard look" requirement "sets a high standard for the agencies, a standard which must be rigorously enforced by 4 No. the reviewing courts." 2004AP3179.awb Calvert Cliffs' Coordinating Comm., Inc. v. U.S. Atomic Energy Comm'n, 449 F.2d 1109, 1114 (D.C. Cir. 1971). If an agency's without individualized "decision was consideration reached and procedurally balancing of environmental factors--conducted fully and in good faith--it is the responsibility of the courts to reverse." Indeed, fails courts have not to include the hesitated to requisite level Id. at 1115. invalidate of an EIS that discussion and analysis.70 II. The Failure To Evaluate Cumulative Effects ¶309 One of the more controversial aspects of the project is its proposed cooling system, a type banned by both Illinois and Indiana. See, e.g., 35 Ill. Adm. Code 302.509; 327 IAC 2- 1.5-8(c)(4)(D)(v)(AA). The system uses cold water from Lake Michigan after to cool steam it passes through the electric turbine, so that the steam condenses to water and can be fed back into the coal-fired boiler to be converted back into steam. Because the cold water would be used only once before being 70 See, e.g., League of Wilderness Defenders v. Forsgren, 309 F.3d 1181, 1191-92 (9th Cir. 2002) (EIS failed to consider impacts of pesticide drift outside target spray area); Utahns For Better Transp. v. U.S. Dept. of Transp., 305 F.3d 1152, 1179-80 (10th Cir. 2002), modified on other grounds, 319 F.3d 1207 (10th Cir. 2003) (highway project's impacts to migratory birds); Muckleshoot Indian Tribe v. U.S. Forest Serv., 177 F.3d 800, 810-11 (9th Cir. 1999) (impacts of land exchange); City of Carmel-By-The-Sea v. U.S. Dept. of Transp., 123 F.3d 1142, 116061 (9th Cir. 1997) (cumulative impacts of highway); Town of Huntington v. Marsh, 859 F.2d 1134, 1140-43 (2d Cir. 1988) (effects of discharge to Long Island Sound). 5 No. piped back to Lake Michigan, the system is 2004AP3179.awb known as "once- through" cooling. ¶310 The drawback of the once-through cooling system is that it has the potential to cause large-scale destruction of aquatic life. The system functions by taking in vast amounts of water on a continuing basis. together with the Here, the proposed facility would, existing units, suck in approximately 2,250,000 gallons per minute, i.e., 3.24 billion gallons per day. Experts in this case testified that the massive water intake required for once-through cooling would result in the wholesale destruction of millions of fish and other aquatic life. ¶311 For instance, fish eggs and larvae passing through the fine filter screens to the power plant's condensers could suffer a mortality rate as high as 97 percent.71 Likewise, larger fish would be killed or fatally injured through impingement when they are pressed intake. against the filter screens by the force of the Even with mitigating measures in place, "[t]he proposed once-through destruction shellfish cooling of by tens system of entrainment will millions result of fish, in annual crustaceans impingement."72 and the The and aquatic environment of Lake Michigan will be forever altered. ¶312 The minimum content of an adequate EIS includes the proposed action's cumulative environmental effects. 71 Direct testimony of Dr. Peter A. Henderson. 157 at 4287. 72 Id. at 4285. 6 Wis. Admin. R. 18, Item No. Code § PSC 4.30(3) requires in relevant part 2004AP3179.awb that an EIS contain: (b) An analysis of the probable impact of the proposed action on the environment, including: 1. An evaluation of positive and negative effects on the affected local and regional environments, including the proposed action's direct, indirect and cumulative environmental effects. (Emphasis added.) ¶313 Likewise, WEPA clearly mandates that the EIS contain a "detailed statement" of: 1. The environmental impact of the proposed action; 2. Any adverse environmental effects which cannot be avoided should the proposal be implemented. Wis. Stat. § 1.11(2)(c)1&2. ¶314 Here, after sparse discussion, the EIS dismisses cumulative effects of once-through cooling as "inconsequential" to the ecosystem of Lake Michigan. It notes: relative to the Lake Michigan fishery, the impacts of entrainment and impingement were inconsequential to aquatic life in Lake Michigan. (Emphasis added.) ¶315 This conclusion, however, was not based on a current analysis of Lake Michigan and the proposed water intake system. Rather, it was based on a 1975-76 monitoring study of the Lake and the then existing water intake system of the power plant. There are two problems with reliance on this study. ¶316 First, Lake Michigan's significantly in the last 30 years. ecosystem has changed For example, there are 36 new nonindigenous species that have been first observed in Lake 7 No. 2004AP3179.awb Michigan since 1976. Nat'l Oceanic & Atmospheric Admin. Great Lakes Lab., Envtl. Species Resarch List (May Great 27, Lakes Aquatic 2003). Nonindigenous Available at http://www.glerl.noaa.gov/res/Programs/invasive/ansmechofintro05 2703.html. The EIS does not take into account the significant changes to the ecosystem. ¶317 Second, the proposed cooling system is substantially different and much more ambitious than the one examined in the 1970s. Its intake system, extending almost two miles into Lake Michigan, would be ten times longer than the original structure. Moreover, the total exposure width of the proposed system would be more than twice that of the original system.73 The estimated 3.24 billion gallons of water consumed each day represents a 183% increase over the consumption considered in the 1975-76 73 The original water intake system at OCPP consisted of eight pumps, divided equally between two pumphouses. The pumps, positioned 50 feet inland from the lakeshore, drew water from a 900-foot long, 200-foot wide, artificial channel in Lake Michigan. Each pumphouse was connected to the lakeshore via an intake structure fitted with mesh screens to prevent fish from being drawn into the water system. The width of these intakes effectively regulated the amount of water subject to intake. The width of the intake on the north pumphouse was 35 feet; on the south pumphouse, the width was 58 feet; the total exposure width of the system was thus 93 feet. By contrast, the proposed water intake structure would be located up to 9,000 feet offshore, at a depth of 43 feet. The intake itself would be an array of 24 cylinders, each 8 feet in diameter and 32 feet long, connected to 27-foot diameter tunnel bored 200 feet below the surface of Lake Michigan. The total exposure width of the proposed system would be 192 feet, more than twice that of the original system analyzed in the 1976 study. 8 No. study.74 2004AP3179.awb Again, the EIS fails to consider these substantial differences. ¶318 In an attempt to curb the criticism for reliance on a study conducted almost 30 years ago, the majority quotes from the EIS' reference to a 2003 report. Majority op., ¶201. In doing so, the majority attempts to substitute an interim report of data collection for the mandated evaluation of the environmental impact of the aquatic life. ¶319 The interim 2003 report describes the data compiled during the first year of a two-year study. scope and limited to counting fish eggs It is narrow in and larvae in the vicinity of the existing and proposed structures. ¶320 The report fails to consider the impact of entrainment and impingement shellfish. on tens of millions fish, crustaceans, and Indeed, the report offers no conclusion whatsoever as to the environmental impact of the proposed structure. This 74 The study relied on data collected from periodic sampling 89 total samples over a one-year period of the north pumphouse. WEPCO, Intake Monitoring Studies, at II-1 (1976). The four pumps at this site were each rated at 110,000 gpm, with the four pumps at the south pumphouse rated at 198,000 gpm. Thus, the maximum volume of water intake at the existing OCPP structure was 1,232,000 gpm, or 1.77 billion gallons per day. Id. at I-3. The proposed water intake system would consist of three parts: the remaining OCPP units, originally the south pumphouse; the two proposed SCPC plants; and the proposed IGCC plant. The remaining OCPP units are still rated to 792,000 gpm. The proposed SCPC plants would demand an estimated 970,000 gpm. Finally, the proposed IGCC plant would demand an additional 485,000 gpm. All totaled, the proposed ERGS water intake system would consume an estimated 3.24 billion gallons of water each day. 9 No. interim short data of collection providing report a of "hard an 2004AP3179.awb incomplete look" at the study falls environmental consequences of the proposed action. ¶321 In light of these shortcomings, there was no adequate evaluation of cumulative environmental Code § PSC the "proposed 4.30(3). action's effects" Absent as from direct, required the EIS indirect by is Wis. any and Admin. "detailed statement" of the "environmental impact of the proposed action" as mandated by WEPA. studies, the EIS By relying on outdated and incomplete failed to assess the future environmental effects of this proposed action. PSC's decision to accept the EIS cumulative As such, the contravened the basic requirements of the PCS's own rules and WEPA. III. The Failure To Evaluate Reasonable Alternatives ¶322 In contrast to the proposed once-through cooling system, two available alternative cooling technologies, "cooling towers" and "dry cooling," percent or more.75 The would former reduce water operates by intake by 90 continuously circulating a limited amount of water, drawing in more only as necessary to replace the water that evaporates in the cooling 75 Direct testimony of Dr. Peter A. Henderson. 157 at 4298. 10 R. 18, Item No. process. 2004AP3179.awb The latter, meanwhile, uses even less water, operating on the same principle as an automobile radiator.76 ¶323 Analysis environmental of impact Wis. 2d at 73. alternatives is statement." "the heart the Brewers, Milwaukee of 130 Accordingly, the minimum content of an adequate EIS includes an evaluation of the reasonable alternatives to the proposed action. ¶324 Wis. Admin. Code § PSC 4.30(3)(c) requires in relevant part: (c) An evaluation of the reasonable alternatives to the proposed action and significant environmental consequences of the alternatives, including those alternatives that could avoid some or all of the proposed action's adverse environmental effects and the alternative of taking no action. (Emphasis added.) ¶325 Likewise, WEPA mandates that the EIS contain a "detailed statement" of "[a]lternatives to the proposed action." Wis. Stat. § 1.11(2)(c)3. ¶326 Additionally, the water intake structure must satisfy the requirements of the Clean Water Act, which requires that "the location, design, construction, and capacity of cooling water intake structures reflect the best technology available 76 The Great Lakes region hosts five dry-cooling stations: Olmstead County Waste-to-Energy Facility (1 megawatt in Rochester, MN); Chicago Northwest Waste-to-Energy Facility (1 megawatt); Arbor Hills Landfill Gas Facility (9 megawatts in Northville, MI); Pine Bend Landfill Gas Facility (6 megawatts in Eden Prairie, MN); and Mallard Lake Landfill Gas Facility (9 megawatts in Hanover Park, IL). 11 No. for minimizing adverse environmental impact." 2004AP3179.awb 33 U.S.C.A. § 1326(b) (emphasis added). ¶327 While an agency is not required to evaluate "the environmental consequences of alternatives it has in good faith rejected as too remote, speculative, or . . . impractical or ineffective," All Indian Pueblo Council v. United States, 975 F.2d 1437, 1444 (10th Cir. 1992), "[t]he existence of a viable but unexamined alternative statement inadequate." renders an environmental impact Resources Ltd., Inc. v. Robertson, 35 F.3d 1300, 1307 (9th Cir. 1994). ¶328 Here, the EIS failed to evaluate reasonable alternatives to the proposed once-through cooling system that would greatly reduce harm to aquatic life in Lake Michigan. Instead, the EIS merely states that measures should be taken to mitigate the harm that would be caused, and that additional studies of entrainment and impingement should be conducted after the system has been built. ¶329 As one aquatic life expert indicated, this approach amounts to closing the barn door after the horse has left. After all, once an open-cycle cooling system is allowed, there is very little that can be done to significantly reduce its harm to the aquatic environment. The expert explained, "It is my opinion that there are few options to protect lake life from an offshore intake of the size proposed and that these options are further restricted if implementation is attempted after design and completion of construction."77 77 Direct testimony of Dr. Peter A. Henderson. 157 at 4314. 12 R. 18, Item No. 2004AP3179.awb ¶330 When asked by several entities78 why the EIS failed to discuss any alternatives to environmentally-destructive once- through cooling system, the EIS writers both acknowledged and defended this complete failure. They explained: Once-through cooling water and closed-cycle cooling are commonly used cooling alternatives. WEPCO has proposed to use once-through cooling water for the ERGS. The Clean Water Act does not prohibit the use of once-through cooling water, nor does it compel anyone to use closed-cycle cooling. DNR does not have the authority to require closed-cycle cooling for this project. ¶331 There are two problems with this explanation. it is illogical. First, The conclusion that one need not address the common alternative of closed-cycle cooling because the DNR does not have the authority to require it is a non sequitur. Second, and more importantly, it is against the clear language of the PSC's own rule and WEPA. ¶332 Absent from the EIS is the required evaluation of: alternatives, including those alternatives that could avoid some or all of the proposed action's adverse environmental effects . . . . Wis. Admin. Code § PSC 4.30(3)(c). ¶333 Likewise, missing from the EIS is a "detailed statement" of "[a]lternatives to the proposed action." Wis. Stat. § 1.11(2)(c)3. ¶334 The majority proceeds to whitewash this inadequacy by construing "the EIS's writers' response as concluding that cooling towers are not a reasonable alternative due to the DNR's 78 The entities include Lake Michigan Federation, Citizens' Utility Board, and SC Johnson. 13 No. inability to require them." Majority op., 2004AP3179.awb ¶205. It then explains, "[g]iven that the PSC is best situated to determine what constitutes a reasonable alternative, we cannot conclude that the PSC's determination that this analysis is reasonable lacks a rational basis." Id. ¶335 Contrary to the assertions of the majority, there is nothing unreasonable about closed-cycle cooling. require the authors of speculative analysis." the Id. EIS to engage This would not in "remote and Indeed, many other power plants have also been using cooling towers for decades, including the last coal-fired plant that Wisconsin Energy Corporation built, Pleasant Prairie. described Tellingly, closed-cycle the cooling EIS as writers themselves a "commonly used to evaluate these . . . alternative[]."79 ¶336 As alternatives, such, along the with EIS needed their significant environmental 79 Since oral argument in this case, Clean Wisconsin and SC Johnson have filed a lawsuit in the Dane County Circuit Court, challenging the Wisconsin Department of Natural Resources issuance of a permit to operate the controversial once-through cooling system that would serve the proposed OCPP. At a public hearing on that matter, Peter Howe, a biologist for the Environmental Protection Agency, submitted 22 pages of testimony expressing his serious reservations with the permit. "Testimony of Peter H. Howe in Objection to Conditions in Draft WPDES Permit No. WI-0000914-07-0," Prepared February 13, 2005, available at the Department of Natural Resources. Howe noted that "all power plants built in the past 20 years of which [he was] aware use closed cycle cooling." Id. Additionally, Howe observed, "if cooling towers had been selected, we would not be having the following debate on entrainment, thermal or mercury . . . ." 14 No. consequences. analysis, of Wis. course, Admin. need Code not § be PSC 2004AP3179.awb 4.30(3)(c). extraordinarily However, "more than nothing was required." This detailed. Utahns For Better Transp. v. U.S. Dept. of Transp., 305 F.3d 1152, 1166 n. 6 (10th Cir. 2002), modified on other grounds, 319 F.3d 1207 (10th Cir. 2003). ¶337 Instead of evaluating these alternatives, however, the PSC asserts that "best technology the proposed water available." Again, intake structure citing to the is the 1975-76 monitoring study conducted in conjunction with permits related to the original power plant, the PSC states: The report concluded . . . . ["]The impact on the environment must be considered to be minimal." In an April 15, 1977 letter to Wisconsin Electric Power Company, the Department [of Natural Resources] concurred with this conclusion. The Department has not evaluated this conclusion since 1977. ¶338 I agree with the State of Illinois that the PSC has "declined to conduct even the most basic inquiry into alternatives to the environmentally-destructive cooling system proposed by the applicant . . . ." The relevance of the 1975-76 study to the proposed project is tenuous at best. It certainly cannot be viewed as a thorough analysis of what represents the "best technology available" for the proposed site, as required by the Clean Water Act. ¶339 In the end, 33 U.S.C.A. § 1326(b). the EIS provides but a fleeting consideration of the environmental impact of the proposed water intake system, and no consideration whatsoever of the reasonable alternatives. Therefore, the PSC's decision to accept the EIS 15 No. 2004AP3179.awb was contrary to the requirements of its own administrative rules and WEPA. ¶340 I Accordingly, I conclude that no deference is due. recognize that this project is important for southeast Wisconsin and the state as a whole. Yet it is also critically important state to the citizens of this that the process approving the project adheres to the requirements of law. Because the PSC decision to accept the EIS was in error, this court should reverse the agency's decision and remand to the PSC for the mandated evaluations. ¶341 I am authorized to state that Chief Justice SHIRLEY S. ABRAHAMSON joins this dissent. 16 No. 1 2004AP3179.awb

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