On Aug. 7, 2025, at an open meeting, the commission approved Northern States Power Company of Wisconsin's request to defer $9,600,000 of its 2025 excess liability insurance expense as a regulatory asset until a future rate proceeding and declined to authorize carrying costs.

The decision leaves recovery of the deferred amount to a later rate case and treats the approved deferral as an accounting mechanism rather than approval of cost recovery or the reasonableness of the underlying insurance expenditures.

Chair Strand explained the scope of the action before the commission, saying, "this request is only a request for deferral. This is not a cost recovery decision, nor is it a determination on the reasonableness of the applicants insurance cost expenditures." Strand also described the criteria the commission uses when considering deferral accounting, citing an accounting policy statement of position: "S.O.P. 94-01." The chair told colleagues that, if authorized, the deferral would be for accounting purposes only and "would not bind the commission to any specific treatment for any cost in any future proceeding."

The application described a substantial recent increase in excess liability premiums: the premium more than doubled in 2023 and "in 2024 it increased by 400% which was an increase of $9,300,000 in 1 year," Chair Strand said. The chair said the record shows wildfire risk and wildfire-related claims in other jurisdictions are the primary drivers of the higher premiums and that those wildfire factors account for "approximately 90% of the $9,300,000 increase." Strand noted NSPW had not reported wildfire-related insurance claims itself but that insurers are differentiating capacity and raising prices across the market.

Commissioners said NSPW had documented efforts to control and mitigate costs, including replacing old wood poles and creating a wildfire mitigation plan, and that the company uses a layered approach to evaluate insurance needs. Commissioner Nieto said she found the increase "extraordinary" under the applicable criteria and that the amount was material relative to net income; she added that historical rate-setting practices and authorized returns already build in some protection for utilities and customers but concluded the totality of events here supported deferral. "That's why I would approve it, at alt 1," Nieto said.

NSPW had requested the deferral include carrying costs at the utility's weighted cost of debt, which the record cites as 2.23% (authorized in docket 04/1926). Commissioners expressed uncertainty about the timing of a future proceeding that would address recovery. Chair Strand noted the filing date for the item was Feb. 14, 2025, and that NSPW had suggested it might carry costs for more than 34 months — until Jan. 1, 2028, when rates from a 2027 rate case could take effect. For those reasons, Strand said, he did not find sufficient justification to authorize carrying costs and did not approve them. "Because we won't know...I don't feel compelled to authorize carrying costs today," Strand said. Commissioner Hawkins concurred with both outcomes.

Commissioner Nieto moved the motion to approve the deferral and not to authorize carrying costs; Commissioner Hawkins seconded. The commission voted unanimously in favor. The motion text on the record read in part: "I move we approve the applicant's request to defer the $9,600,000 of 2025 excess liability insurance expense as a regulatory asset until a future rate proceeding consistent with our discussion."

The commission emphasized that approval was limited to deferral accounting treatment; any decision on whether customers ultimately pay the costs will be made in a future rate proceeding. The meeting concluded after the vote; the commission did not take notice of NSPW's late-filed comments and set its next open meeting for Aug. 13, 2025.