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Wisconsin's Envtl. Decade v. Public Serv. Comm'n

ELR Citation: 7 ELR 20563
Nos. No. 75-403, 256 N.W.2d 149/79 Wis. 2d 409, (Wis., 07/01/1977) Aff'd as modified

Modifying and then affirming a trial court decision, 6 ELR 20192, the Wisconsin Supreme Court holds that the Wisconsin Environmental Policy Act (WEPA) applies to utility ratemaking proceedings. Wisconsin Electric Power Company (WEPCO) in 1972 filed for a rate increase. The Commission granted the request in 1973 after deciding that no environmental impact statement (EIS) under WEPA need be filed because the rate order had no direct effect on the environment. The court concludes that agencies must consider environmental consequences of available alternatives within the framework of an EIS which is substantially similar to an EIS prepared by federal agencies under the National Environmental Policy Act. The agency has the burden of producing a reviewable record that shows that its decision whether or not to file an EIS is based on sufficient factual inquiry. A threshold determination on preparing an EIS is critical because an ill-advised determination not to file will eliminate the environmental input WEPA was designed to foster. Courts must therefore subject negative determinations to a searching inquiry. The standard of review is whether the decision not to file was reasonable under the circumstances. As here, when issues of arguably significant environmental impact are raised, the agency must justify its negative decision. The Commission's conclusory decision not to file is not adequately supported. The court rejects the Commission's assertions that WEPA does not apply to indirect environmental effects, that challengers must prove to the Commission's satisfaction that an action will produce significant environmental effects, that an EIS on rate making would be so speculative as to be meaningless, that expert disagreement on electricity demand elasticity precludes an adequate EIS, that the Commission may ignore cumulative impacts of its continuing regulatory function, and that the proper time for EIS preparation is prior to power plant construction. Since the filing of the contested order in this case, the Commission has revised its administrative rules so that EIS preparation would have been required in this instance, and the Commission is preparing a generic EIS on ratemaking. These facts do not render the appeal moot; the issue is the Commission's current compliance with WEPA. Finally, the court reverses the circuit court's holding that the threshold filing decision requires an evidentiary hearing because the Commission has discretion to determine the form in which it gathers environmental data.

Counsel for Plaintiff
Kathleen M. Falk
Wisconsin's Environmental Decade
114 E. Mifflin St., Madison WI 53703
(608) 251-7020

Counsel for Defendants
Stephen Schur
Public Service Commission
4802 Sheboygan Ave., Room 453, Madison WI 53702
(608) 266-1241

Robert H. Gorske
Wisconsin Electric Power Company
780 N. Water St., Milwaukee WI 53202
(414) 259-4000

W. Stuart Parsons
Quarles & Brady
780 N. Water St., Milwaukee WI 53202
(414) 273-3700