Commission approves modified affiliated‑interest agreement allowing short‑term capacity trades between Wisconsin Public Service and Wisconsin Electric

The Public Service Commission on July 2 approved a modified affiliated‑interest template agreement that lets Wisconsin Public Service Corporation and Wisconsin Electric Power Company buy and sell capacity to one another on a short‑term basis.

Commissioner Richard Hawkins, who led the discussion, said the joint application (filed Nov. 15, 2024) proposes capacity-only transactions to be recorded as zonal resource credits under MISO tariffs and limited to terms of no more than three years. “I am supportive of this request and find that it will benefit customers of both utilities and provides a flexible framework that will allow the applicants to act quickly given, the pace of change we are seeing in the industry,” Hawkins said.

Hawkins told colleagues the commission may only approve affiliated‑interest agreements under Wisconsin statute 196.52(3)(a) if the arrangement is reasonable and in the public interest and if satisfactory proof of cost is provided. He recommended two linked decisions: approve the blanket capacity transaction template as modified, and adopt order conditions as revised by the commission’s discussion.

On pricing, Hawkins urged the commission to incorporate the cost of new entry (CONE) into the formula. He said staff’s 100% CONE option (shown in staff Table 2) best protects customers and accounts for shifting, non‑summer tight conditions. Hawkins also proposed language requiring that historical auction prices used to set capacity prices must come from MISO Planning Resource Auctions that employed the same auction methodology expected over the agreement’s term: “...if you’re using these historical auction prices, you have to be expecting the auction to be the same framework, basically, as the one that created those historic prices.” He added that the applicants clarified in a data response they would use the latest FERC‑approved CONE value, updated annually at MISO.

Hawkins recommended modifying condition 5 to remove the phrase about transactions ‘‘indirectly meeting the needs of very large customers (VLCs),’’ and instead prohibit using the agreement to directly meet VLC needs; he said policing indirect service would be unworkable and that getting pricing right is the practical safeguard.

Chair Strand and Commissioner Nieto said they could join Hawkins’ position on approving alternative 2 with the sub‑alternatives and the altered condition language. Commissioner Nieto moved to approve the affiliated‑interest agreement with modifications pursuant to the discussion; Chair Strand seconded. The motion carried on a voice vote.

The commission’s action approves a template for opportunity sales between the two utilities, with revenue from sales intended to offset monitored fuel costs. The commission did not record roll‑call votes in the transcript; commissioners adopted the modifications and approved the order by voice vote.

The commission concluded its business after the vote and adjourned; the next open meeting is scheduled for Thursday, July 9, 2026, at 10:30 a.m.