Case Name: Wisconsin Industrial Energy Group, Inc. and Citizens Utility Board, Petitioners-Appellants, v. Public Service Commission of Wisconsin, Respondent-Respondent, Wisconsin Electric Power Company and Wisconsin Power and Light Company, Intervenors-Respondents, Wisconsin Public Service Corporation, Intervenor
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 2012-07-11
Citations: 342 Wis. 2d 576
Docket Number: No. 2010AP2762
Parties: Wisconsin Industrial Energy Group, Inc. and Citizens Utility Board, Petitioners-Appellants, v. Public Service Commission of Wisconsin, Respondent-Respondent, Wisconsin Electric Power Company and Wisconsin Power and Light Company, Intervenors-Respondents, Wisconsin Public Service Corporation, Intervenor.
Judges: ¶ 94. I am authorized to state that CHIEF JUSTICE SHIRLEY S. ABRAHAMSON joins this dissent.
Reporter: Wisconsin Reports Second
Volume: 342
Pages: 576–625

Head Matter:
Wisconsin Industrial Energy Group, Inc. and Citizens Utility Board, Petitioners-Appellants, v. Public Service Commission of Wisconsin, Respondent-Respondent, Wisconsin Electric Power Company and Wisconsin Power and Light Company, Intervenors-Respondents, Wisconsin Public Service Corporation, Intervenor.
Supreme Court
No. 2010AP2762.
Oral argument April 17, 2012.
Decided July 11, 2012.
2012 WI 89
(Also reported in 819 N.W.2d 240.)
For the petitioners-appellants there were briefs by Kira E. Loehr and Citizens Utility Board, Steven A. Heinzen, P. Duncan Moss and Godfrey & Kahn, S.C., Madison, and oral argument by Kira E. Loehr.
For the respondent-respondent there were briefs by Cynthia Smith, Justin W. Chasco, Steven Levine and Public Service Commission of Wisconsin and oral argument by Justin W. Chasco.
For the intervenors-respondents there were briefs by Brian D. Winters, Joseph Orion Wilson and Quarles & Brady LLP, Milwaukee, Michael Greiveldinger, Arshia Javaherian, and Wisconsin Power and Light Company, and oral argument by Michael S. Greiveldinger and Joseph Orion Wilson.

Opinion:
PATIENCE DRAKE ROGGENSACK, J.
¶ 1. This case comes before us by certification from the court of appeals, pursuant to Wis. Stat. § 809.61 (2009-10). We are asked to decide whether the Public Service Commission of Wisconsin (PSC) correctly concluded that Wisconsin Power and Light's (WPL) application to construct a large, out-of-state, electric generating facility was properly reviewed under Wis. Stat. § 196.49(3), the "Certificate of Authority" (CA) statute, or whether Wis. Stat. § 196.491(3), the "Certificate of Public Convenience and Necessity" (CPCN) statute, should have been applied.
¶ 2. Applying due weight deference, we conclude that the PSC's interpretation of the CPCN law as applying exclusively to in-state facilities and its decision to analyze WPL's application under the CA law were reasonable, and that there is not a more reasonable interpretation of the laws. The PSC examined the language, purpose, and context of both the CA and the CPCN laws and concluded that the CA law governed WPL's application to construct an out-of-state facility. Additionally, the PSC concluded that applying the CPCN law to an out-of-state facility would exceed the jurisdiction of Wisconsin laws and lead to unreasonable results. Based on our review of these statutes and the corresponding administrative rules, we conclude that there is not a more reasonable interpretation of the CA and the CPCN laws. Accordingly, we affirm the circuit court's order, which affirmed the PSC's November 6, 2008, Interim Order in PSC Docket No. 6680-CE-173.
I. BACKGROUND
¶ 3. On June 6, 2008, WPL filed an application with the PSC for the construction of a 200-megawatt wind-powered electric generating facility in Freeborn County, Minnesota, to be known as the Bent Tree Wind Project. The application was entitled "Application for Certificate of Public Convenience and Necessity" and was filed "pursuant to the requirements of Wis. Stat. § 196.49, 196.491 . . . and any other rule or law deemed applicable by the [PSC]."
¶ 4. In response to WPL's application, the PSC issued a Notice of Proceeding and Request for Comments, seeking public comment on whether WPL's application should be reviewed under the CPCN or the CA law. Petitioners here, Wisconsin Industrial Energy Group, Inc. and Citizens Utility Board (collectively, WIEG), filed comments in response to the PSC's Notice, arguing that the PSC was statutorily required to apply the CPCN law because Bent Tree exceeded the CPCN law's 100-megawatt threshold, thereby triggering that law's more demanding review procedures. The PSC held an open meeting at which it deliberated on the issue.
¶ 5. On November 6, 2008, the PSC issued an Interim Order wherein it concluded that the CA law was the appropriate statute under which to review WPL's Bent Tree application. In its Interim Order, the PSC acknowledged that neither the CA nor the CPCN law explicitly addressed whether either law applied to out-of-state facilities. However, the PSC ultimately concluded that the CA law could validly be applied to such facilities, based on the language, context, and historical application of that law.
¶ 6. Additionally, the PSC noted that the procedures for reviewing applications under the CA law afforded ample ratepayer protections, such that the CPCN did not need to be stretched to apply to out-of-state facilities in an attempt to better protect ratepayers. Rather, the PSC concluded that applying the CPCN law to an out-of-state facility would present problems because multiple provisions in the CPCN law would be unreasonable or absurd if applied to applications for out-of-state facilities.
¶ 7. The PSC noted the " 'elementary principleQ that the laws of one State have no operation outside of its territory, except so far as is allowed by comity,'" quoting Pennoyer v. Neff, 95 U.S. 714, 722 (1877). Additionally, the PSC recognized that Wisconsin law specifically contemplates a limitation based on the state's physical boundaries, citing Wis. Stat. § 1.01 ("[t]he sovereignty and jurisdiction of this state extend to all places within the boundaries declared in article II of the constitution.").
¶ 8. The PSC discussed multiple provisions of the CPCN law that, if applied to an out-of-state facility, could require the PSC to assert regulatory authority beyond the state's borders. Such effect, the PSC concluded, could interfere with the host state, while afford ing no benefit to Wisconsin residents. The PSC rejected the possibility of narrowly construing certain provisions of the CPCN law to make that law more reasonable as applied to out-of-state facilities; instead, the PSC decided that the most reasonable approach was to interpret the CPCN law as applying exclusively to facilities within the state.
¶ 9. The PSC noted that its conclusion was supported by the legislative history of the CPCN law, which included a statement from the Legislative Reference Bureau's (LRB) analysis of the bill. The LRB analysis stated that the CPCN law "establishes a method whereby the development of major electric generating and transmission facilities in this state is subject to scrutiny by the public . and to approval by [the PSC and the DNR]." (Emphasis in Interim Order.) The PSC found this helpful because the LRB's analysis was " 'printed with and displayed on the bill when it [was] introduced in the legislature,'" quoting Dairyland Greyhound Park, Inc. v. Doyle, 2006 WI 107, ¶ 32, 295 Wis. 2d 1, 719 N.W.2d 408.
¶ 10. Finally, the PSC concluded that it could reasonably apply the CA law to review out-of-state construction projects, with no need to sever or modify any of that law's provisions. The PSC noted that it had previously applied the CA law to review public utilities' applications for out-of-state projects, and that the relevant rules, e.g., Wis. Admin. Code § PSC 112.05(2) (May 2008), expressly contemplated such applications. Accordingly, the PSC concluded the most reasonable course was to evaluate WPL's Bent Tree application under the CA law.
¶ 11. Commissioner Lauren Azar dissented from the Interim Order. She agreed with WIEG's primary argument that the more demanding application and hearing procedures under the CPCN law were mandatory whenever a construction project was proposed that exceeded the 100-megawatt threshold under the CPCN, regardless of location. She relied on the notion that the CPCN law was intended to afford greater ratepayer protections, and therefore allowing applications for large facilities to be processed under the CA law could erode such protections.
¶ 12. After entry of the PSC's Interim Order, the PSC held a hearing and open meetings on WPL's Bent Tree application, and considered both in-person and pre-filed testimony. On July 30, 2009, the PSC granted WPL a Certificate of Authority for the Bent Tree project.
¶ 13. On August 27, 2009, WIEG petitioned for judicial review of the PSC's decision in the Dane County Circuit Court, pursuant to Wis. Stat. § 196.41 and Wis. Stat. § 227.52. The circuit court concluded that, although de novo review applied to the PSC's decision to apply the CA rather than the CPCN law, the PSC's decision was correct. WIEG appealed, and the court of appeals then certified the question to this court. We accepted the certification.
II. DISCUSSION
A. Standard of Review
¶ 14. This is a review of an administrative agency's decision under Wis. Stat. § 227.52. When an administrative agency's decision is challenged in the circuit court under § 227.52, an appellate court reviews the decision of the agency, not that of the circuit court. Cnty. of Dane v. LIRC, 2009 WI 9, ¶ 14, 315 Wis. 2d 293, 759 N.W.2d 571. We are asked to review whether the PSC properly concluded that the CA law was the correct standard under which to review WPL's Bent Tree application, or whether the CPCN law should have been applied. The interpretation of statutes and their application to undisputed facts are questions of law, which we review independently. Id.
¶ 15. Statutory interpretation begins with the language of the statute at issue. Watton v. Hegerty, 2008 WI 74, ¶ 14, 311 Wis. 2d 52, 751 N.W.2d 369. "If the meaning of the statute is plain, we ordinarily stop the inquiry." Id. (quoting State ex rel. Kalal v. Circuit Court for Dane Cnty., 2004 WI 58, ¶ 45, 271 Wis. 2d 633, 681 N.W.2d 110). The plain meaning of a statute can be discerned from the words used, as well as the context in which those words are used. Id. Additionally, statutory purpose is helpful in a plain meaning analysis; courts will favor an interpretation of statutory language that fulfills the statute's purpose. See State v. Hanson, 2012 WI 4, ¶ 17, 338 Wis. 2d 243, 808 N.W.2d 390. Statutory purpose can be stated expressly or it may be discerned from context and structure. Id. Moreover, statutory language is not interpreted in isolation "but as part of a whole; in relation to the language of surrounding or closely-related statutes; and reasonably, to avoid absurd or unreasonable results." Watton, 311 Wis. 2d 52, ¶ 14 (quoting Kalal, 271 Wis. 2d 633, ¶ 46) (internal quotation marks omitted).
¶ 16. If the meaning of the statutory language is plain, the statute is applied according to the plain meaning of the terms used. Id., ¶ 15. However, if a statute is "capable of being understood by reasonably well-informed persons in two or more senses, then the statute is ambiguous." Id. (quoting Kalal, 271 Wis. 2d 633, ¶ 47) (internal quotation marks and alterations omitted). "When a statute is ambiguous, we may consult extrinsic sources to discern its meaning. While extrinsic sources are usually not consulted if the statutory language bears a plain meaning, we nevertheless may consult extrinsic sources to confirm or verify a plain-meaning interpretation." Id. (quoting Kalal, 271 Wis. 2d 633, ¶ 48, 50-51) (internal quotation marks and citations omitted).
¶ 17. When we review an agency's interpretation of statutes, our process of statutory interpretation is modified slightly. We have historically afforded varying levels of deference to agencies' interpretations of statutes, depending on an agency's relative expertise in the area of law and the reasonableness of its interpretation. See Cnty. of Dane, 315 Wis. 2d 293, ¶ 14-15. To determine whether the agency's interpretation of a statute is reasonable, we review the statute independently from the agency's interpretation, thereby "embracing] a major responsibility of the judicial branch of government, deciding what statutes mean." Id., ¶ 19 (citation and internal quotation marks omitted).
¶ 18. Deference to agency decisions is based in part on the provisions of Wis. Stat. § 227.57, governing judicial review of agency decisions. Under § 227.57(2), a court "shall affirm the agency's action" "[ujnless the court finds a ground for setting aside, modifying, remanding or ordering agency action." Specifically, courts are directed to accord due weight to "the experience, technical competence, and specialized knowledge of the agency involved." § 227.57(10).
¶ 19. Courts reviewing agency interpretations of statutes typically afford such interpretations one of three levels of deference: great weight, due weight, or no deference, also referred to as de novo review. Cnty. of Dane, 315 Wis. 2d 293, ¶ 15. The level of deference accorded an agency's interpretation of a statute is influenced by multiple considerations, "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." Clean Wis., Inc. v. Pub. Serv. Comm'n of Wis., 2005 WI 93, ¶ 38, 282 Wis. 2d 250, 700 N.W.2d 768 (quoting Hutson v. Wis. Pers. Comm'n, 2003 WI 97, ¶ 31, 263 Wis. 2d 612, 665 N.W.2d 212) (internal quotation marks and alterations omitted).
¶ 20. The highest level of deference, great weight, is reserved for an agency's interpretation of a statute in which four criteria are met. See id,., ¶ 39. Great weight 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.
Id., ¶ 39 (quoting Hutson, 263 Wis. 2d 612, ¶ 32) (internal quotation marks and alterations omitted).
¶ 21. For a court to accord great weight deference, the agency need not have examined the statute under the precise facts at issue; instead, where the agency has substantial experience interpreting the statutory scheme at issue, great weight deference may be appropriate when the other criteria listed above are met. Id,., ¶ 40. Where a reviewing court determines that great weight deference is proper, the court will uphold the agency's interpretation if the interpretation is reasonable, even if a more reasonable interpretation exists. See id., ¶ 41.
¶ 22. The next level of deference, due weight, is warranted where an agency has some experience interpreting the statutory scheme at issue, but the agency has not developed any particular expertise interpreting and applying the statutes to place the agency in a better position than a reviewing court. Responsible Use of Rural & Agric. Land (RURAL) v. Pub. Serv. Comm'n of Wis., 2000 WI 129, ¶ 24, 239 Wis. 2d 660, 619 N.W.2d 888. Accordingly, due weight deference is not based as much on the agency's experience interpreting a particular statutory scheme as it is on the legislature having granted the agency the authority to interpret the statutory scheme at issue. Id. (concluding that due weight deference was appropriate for PSC and DNR's decisions under CPCN law). A court affording due weight deference will uphold an agency's interpretation where such interpretation is reasonable, and where there is not a more reasonable interpretation. Id., ¶ 24-25.
¶ 23. Under the lowest level of deference, no deference or de novo review, an agency's interpretation of a statute "is given no weight at all." Clean Wis., 282 Wis. 2d 250, ¶ 43 (quoting Hutson, 263 Wis. 2d 612, ¶ 34) (internal quotation marks omitted). De novo review is appropriate where an interpretation of the statute is a first for the agency, or where the agency's interpretation of the statute has been so inconsistent that it provides a court no real guidance. Id.
¶ 24. In the present case, we conclude that the PSC's decision to apply the CA law to WPL's Bent Tree application, as well as the PSC's interpretation of the CPCN as applying exclusively to in-state facilities, are entitled to due weight deference. The PSC is charged with interpreting both the CA and the CPCN statutes, and its interpretations of both statutes under differing factual scenarios are of long standing. See id., ¶ 253. In determining which statutory scheme to apply to Bent Tree, the PSC received comments from interested parties and weighed these comments against its own extensive experience in reviewing applications for construction of new electric generating facilities. In its Interim Order, the PSC examined the two statutes, as well as its own rules, Wis. Admin. Code ch. PSC 112, and noted that it had applied the CA law to out-of-state projects in the past.
¶ 25. The novelty of the question presented counsels in favor of applying due weight deference, rather than great weight. See RURAL, 239 Wis. 2d 660, ¶ 23. The question here cannot be decided based exclusively on the PSC's prior experience applying either the CA or the CPCN law; although the PSC has applied the CA law to applications for out-of-state facilities in the past, the PSC has never reviewed an application for an out-of-state facility that generates 100 megawatts or more, which is the trigger for the CPCN law. Nonetheless, based on the PSC's general expertise in reviewing applications for electric generating facilities under both CA and CPCN laws and its legislatively granted authority in this area of law, we conclude that the PSC's decision to apply the CA rather than the CPCN law to WPL's Bent Tree application is entitled to due weight deference. Accordingly, we will uphold the PSC's interpretation if it is reasonable, unless we conclude that another more reasonable interpretation exists.
B. Wisconsin Stat. § 196.49 and Wis. Stat. § 196.491
¶ 26. Wisconsin Stat. ch. 196 is entitled "Regulation of Public Utilities." The prevailing purpose of regulation under ch. 196 is to ensure that public utilities' actions are in the public interest. See, e.g., Wis. Power & Light Co. v. Pub. Serv. Comm'n (WPL I), 45 Wis. 2d 253, 259, 172 N.W.2d 639 (1969); GTE N. Inc. v. Pub. Serv. Comm'n of Wis., 176 Wis. 2d 559, 568, 500 N.W.2d 284 (1993); Wis. Power & Light Co. v. Pub. Serv. Comm'n of Wis. (WPL II), 148 Wis. 2d 881, 891-92, 437 N.W.2d 888 (Ct. App. 1989). To facilitate this purpose, the legislature has provided that 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." Wis. Stat. § 196.02(1). The legislature has also authorized the PSC to "adopt reasonable rules to govern its proceedings and to regulate the mode and manner of all inspections, tests, audits, investigations and hearings." § 196.02(3). The PSC has exercised this authority, and enacted Wis. Admin. Code ch. PSC 112, which sets forth procedures that electric public utilities must follow when undertaking certain construction projects.
¶ 27. "Public utility" is a term of art for purposes of ch. 196, and is defined in Wis. Stat. § 196.01(5)(a) to mean:
every corporation, company, individual, association . . and every sanitary district, town, village or city that may own, operate, manage or control any toll bridge or all or any part of a plant or equipment, within the state, for the production, transmission, delivery or furnishing of heat, light, water or power either directly or indirectly to or for the public.
Although this definition establishes which entities qualify as public utilities, Wis. Stat. § 196.49(l)(am) shows that further certification may be necessary for such entities to actually transact business as a public utility. Under that provision, any "public utility" that intends to provide heat, light, water, or power must "obtain [] a certificate from the [PSC] authorizing it to transact public utility business." § 196.49(l)(am).
¶ 28. In addition, under the CA law, a public utility may be required to obtain further certification from the PSC to begin any construction, installation, extension, improvement, or addition to any plant, equipment, property, apparatus, or facility. See Wis. Stat. § 196.49(2). Prior to the PSC certifying a utility's proposed project, the PSC may also demand that the utility demonstrate that public convenience and necessity require the project. See § 196.49(3)(b).
The commission may refuse to certify a project if it appears that the completion of the project will do any of the following:
1. Substantially impair the efficiency of the service of the public utility.
2. Provide facilities unreasonably in excess of the probable future requirements.
3. When placed in operation, add to the cost of service without proportionately increasing the value or available quantity of service unless the public utility waives consideration by the commission, in the fixation of rates, of such consequent increase of cost of service.
Id.
¶ 29. In Wis. Admin. Code ch. PSC 112, the PSC has established a more particularized procedure for reviewing public utilities' applications to construct electric generating facilities. For example, the PSC has specified in Wis. Admin. Code § PSC 112.05(1) that "[n]o electric utility may begin construction, install or place in operation" various types of facilities, listed thereunder, without PSC approval. The PSC also established threshold amounts that trigger the mandatory application and certification requirements. The threshold amount depends on the proposed project's expected cost in relation to the applicant's prior revenues, such that PSC review and approval is required if a project's cost exceeds a utility's specific threshold amount. § PSC 112.05(1) & (3)(a).
¶ 30. To secure PSC approval, a public utility must demonstrate that its proposed project complies with the requirements that the PSC has established under Wis. Admin. Code § PSC 112.06(lm). These requirements are extensive, and include demonstrating the overall purpose and necessity of the project, as well as providing specific descriptions of the project's design, construction schedule, environmental impact, effect on the quality and reliability of utility service, and compliance with energy efficiency standards. § PSC 112.06(lm).
¶ 31. Finally, the PSC has provided that if "upon consideration of the application, together with any supplemental information and objections, the commission finds that the public convenience and necessity require the project as proposed and the project complies with s. 196.49(3)(b), Stats., the commission may authorize the project without public hearing but with modifications and conditions it considers necessary." Wis. Admin. Code § PSC 112.07(1). If the PSC is not able to determine, based solely on the application and supporting materials, that public convenience and necessity require the project, the agency "shall hold a public hearing on the application." § PSC 112.07(2).
¶ 32. Accordingly, although the CA statute simply affords the PSC discretion to consider certain factors in determining whether a project serves the public convenience and necessity, see Wis. Stat. § 196.49(3)(b), the PSC has crafted a thorough and mandatory procedure by which it evaluates applications to construct electric generating facilities under the CA law.
¶ 33. The other relevant statutory scheme under which the PSC is authorized to review and approve applications for construction of electric generating facilities is the CPCN law, Wis. Stat. § 196.491(3). Under the CPCN law, or "Plant Siting Law," as it has been called, see Clean Wis., 282 Wis. 2d 250, ¶ 16, the PSC is required to review applications for certain large-scale electric generating facilities to determine whether the facility serves public convenience and necessity, based on the PSC's consideration of numerous factors, many of which are site-specific to the proposed facility. See § 196.491(3)(d)3., 4., 6.
¶ 34. As a threshold matter, the CPCN law's requirements are not implicated unless the proposed project meets the statutory definition of a "facility." Wis. Stat. § 196.491(3)(a)l. As relevant here, "facility" is defined as "electric generating equipment and associated facilities designed for nominal operation at a capacity of 100 megawatts or more." § 196.491(l)(e), (g). Therefore, the trigger for the review procedures under the CPCN law is the generating capacity of a facility, not the facility's cost. Additionally, whereas the CA law applies to "public utilities," the CPCN law applies to "persons," and provides that "no person may commence the construction of a facility unless the person has applied for and received a certificate of public convenience and necessity under [the CPCN procedures]." § 196.491(3)(a)l.
¶ 35. Upon receiving an application for the construction of a "facility" under the CPCN law, the PSC "shall hold a public hearing . in the area affected," in accordance with the contested case procedures set forth in Wis. Stat. § 227.44. Wis. Stat. § 196.491(3)(b). After reviewing any contested case proceedings, as well as the application materials, the PSC is required to determine, prior to issuing a CPCN, that the proposed facility complies with numerous factors. Some of the relevant factors that the PSC must consider include whether:
2. The proposed facility satisfies the reasonable needs of the public for an adequate supply of electric energy.. . .
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 .
[Provisions relating exclusively to high-voltage transmission lines omitted]
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....
5. The proposed facility complies with the criteria under s. 196.49(3)(b) 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.
[Provision governing wholesale providers omitted]
8. For a large electric generating facility, brown-fields, as defined in s. 560.13(l)(a),[ ] are used to the extent practicable.
Wis. Stat. § 196.491(3)(d).
¶ 36. In addition, the law also establishes time limits within which materials must be submitted by the applicant and decided upon by the PSC and the Wisconsin Department of Natural Resources (DNR). First, at least 60 days prior to the filing of an application for a CPCN, the applicant must provide the DNR with an engineering plan for the proposed facility, including the expected effects of the facility on air and water quality, wetlands, and other natural resources. Wis. Stat. § 196.491(3)(a)3.a. Within 30 days, the DNR is required to inform the applicant of any permits that will be necessary for the facility, after which the applicant has 20 days to apply for such permits. Id.
¶ 37. Within ten days after receipt of a CPCN application, the PSC must send copies of the application to the clerk of each municipality in which the proposed facility will be located, and to the main public library for the county where the facility will be located. Wis. Stat. § 196.491(3)(a)l. Next, within 30 days of receipt of an application, the PSC must determine whether the application is complete, or must notify the applicant of any additional filings that are required. § 196.491(3)(a)2. If the PSC fails to make a completeness determination within 30 days, the application will be deemed complete. Id. After the application is complete, the PSC must take final action on the application within 180 days, or the PSC will be considered as having issued a CPCN for the proposed facility. § 196.491(3) (g).
¶ 38. Finally, the CPCN law also includes provisions intended to preempt local ordinances that would prohibit applicants from engaging in activities that the PSC has allowed under the CPCN law. In particular, Wis. Stat. § 196.491(2r) preempts any local ordinance that would prohibit or restrict testing activities intended to determine the suitability of a site for facility placement. Moreover, when the PSC grants a CPCN for a facility, § 196.491(3)(i) provides that any local ordinances precluding or inhibiting construction may be disregarded.
C. Application of CA and CPCN Laws to Out-of-State Projects
¶ 39. In determining whether the PSC reasonably construed the CA and the CPCN laws as applied to out-of-state facilities, we begin with the language of those statutes. Neither Wis. Stat. § 196.49 nor Wis. Stat. § 196.491 explicitly states whether the law applies to out-of-state facilities. Notwithstanding the omission of an explicit statement in this regard, the scope of each law is made plain by the language, purpose, and context of the laws. Therefore, we conclude that neither statute is ambiguous as to out-of-state application. Reading these statutes in context, we hold that the PSC reasonably concluded: (1) that the CA law controlled WPL's application to construct an out-of-state electric generating facility, and (2) that the CPCN law applies exclusively to in-state facilities. We examine each of these conclusions in turn.
¶ 40. The PSC determined that the CA law could validly be applied to WPL's out-of-state project, based largely on the language of the CA law, Wis. Stat. § 196.49, and its corresponding administrative rules, Wis. Admin. Code ch. PSC 112. First, the language of the CA law plainly governs WPL's application to construct Bent Tree. Under Wis. Stat. ch. 196, WPL is a statutory "public utility," and is subject to regulation under the CA law, based on WPL's intention to construct a new electric generating facility. That is, as a public utility, WPL is subject to the CA law's mandate that any public utility seeking to construct a new facility must comply with any applicable rules or orders of the PSC. See § 196.49(2) and (3). As relevant here, the PSC's rules required that WPL submit an application to the PSC, including a comprehensive description of the project, as well as sufficient facts to demonstrate the purpose and necessity of such project. Wis. Admin. Code § PSC 112.05-06.
¶ 41. WPL complied with the mandates of the CA law. Prior to beginning construction of Bent Tree, WPL submitted an application to the PSC, notifying the agency of WPL's project and providing information relating to all of the categories of required materials under Wis. Admin. Code § PSC 112.06(lm). Accordingly, as an application by a public utility to commence construction of a new electric generating facility, WPL's Bent Tree application was subject to the requirements of Wis. Stat. § 196.49(2) and (3), as well as the mandatory review procedures set forth in Wis. Admin. Code § PSC 112.05-.07.
¶ 42. Moreover, because the CA law governs "public utilities," nothing in the law precludes its application to public utilities seeking to construct out-of-state facilities. Under Wis. Stat. § 196.01(5)(a) and Wis. Stat. § 196.49(l)(am), every "public utility" has availed itself of Wisconsin's regulatory jurisdiction by obtaining authorization to engage in public utility business. Therefore, when the PSC reviews an application under the CA law, it is a statutory entity that is being regulated, not a person's activity of constructing a facility, as is the case under the CPCN law. In this sense, regulating a public utility is comparable to regulating other statutorily ordained entities whose licensure or accreditation may be affected by the entities' activities, even out of state. Cf., e.g., Wis. Stat. § 125.12(2)(ag)5. and 5m. (license for distribution of alcohol subject to revocation upon showing that licensee was convicted of certain offenses in another state); Wis. Stat. § 343.03(5) (where automobile license applicant is licensed in another state, DOT "shall obtain information on the applicant's license status with the state of licensure before issuing a license"). Accordingly, the PSC reasonably concluded that WPL's Bent Tree application was subject to review under the CA law.
¶ 43. Notwithstanding the applicability of the CA law, WIEG contends that because WPL's application was for a facility generating more than 100 megawatts, the plain language of the CPCN law required the PSC to review WPL's application under the CPCN law, exclusively. However, based on the language and scope of the CPCN law, the PSC determined that the CPCN law could not reasonably be applied to Bent Tree. We now turn to the application of the CPCN law to out-of-state facilities, and conclude that the PSC reasonably construed the CPCN law as inapplicable to WPL's Bent Tree facility.
¶ 44. Our conclusion that the PSC reasonably interpreted the CPCN as applying exclusively to in-state facilities rests on three interrelated premises: (1) the CPCN's regulation of "persons" demonstrates that that law does not contemplate regulation of out-of-state activities; (2) the purpose of the CPCN law, to require the PSC to engage in thorough review of site-specific factors, does not reasonably accord with out-of-state activities; and (3) none of the options that could be followed to make the CPCN more reasonable as applied to out-of-state facilities is as reasonable as construing the law to apply exclusively to in-state facilities.
¶ 45. First, the CPCN law regulates "persons" by providing that "no person may commence the construction of a facility unless the person has applied for and received a [CPCN] under this subsection." Wis. Stat. § 196.491(3)(a)l. If this provision were interpreted to apply to out-of-state activities, it could be read to prohibit a person in another state from constructing a 100-megawatt electric generating facility outside Wisconsin, unless the person complied with the CPCN law's application and review procedures. For example, if read to apply to out-of-state persons and facilities, the CPCN law's plain language could prohibit a person in Texas from constructing a "facility" like Bent Tree in California, unless the person complied with all the factors listed in § 196.491(3)(d), and obtained permits from the Wisconsin DNR, under § 196.491(3)(a)3.a.
¶ 46. Given this result, we cannot ignore the State of Wisconsin's lack of authority to regulate a person's activities in another state. As applied to "persons," "[t]he general rule, unquestionably, is that laws of a state have no extraterritorial effect." State v. Mueller, 44 Wis. 2d 387, 391, 171 N.W.2d 414 (1969); see State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 421-22 (2003) ("A State does not acquire power or supervision over the internal affairs of another State merely because the welfare and health of its own citizens may be affected.. . .") (quoting Bigelow v. Virginia, 421 U.S. 809, 824 (1975)); see also K-S Pharmacies, Inc. v. Am. Home Prods. Corp., 962 F.2d 728, 730 (7th Cir. 1992) (discussing "presumption of exclu sive domestic application" based on states' lack of "any. . . power to reach outside their borders"). Although limited exceptions to this general rule might exist, explicitly prohibiting "persons" from engaging in activities outside the state does not fall within one of those exceptions. See Mueller, 44 Wis. 2d at 393. Accordingly, the language and context of the CPCN law strongly suggest that its regulatory scope — persons engaging in particular activities — is wholly intrastate.
¶ 47. Next, the purposes of the CA and the CPCN laws further suggest that the CA law may reasonably be applied to a public utility's application for an out-of-state facility, but that the PSC reasonably concluded that the CPCN law applied exclusively to in-state facilities. We have noted that a prevailing purpose of Wisconsin public utility laws is to protect the consuming public, i.e., ratepayers. See WPL I, 45 Wis. 2d at 259. This purpose is manifest in the authority granted to the PSC to consider ratepayers' interests in reviewing any proposed projects under the CA statute, Wis. Stat. § 196.49(3)(b). Under the CA statute, the PSC may refuse to authorize construction projects that would impair utility efficiency, provide unnecessary facilities, or increase cost without a corresponding increase in value. § 196.49(3)(b). When these considerations are construed in pari materia with the mandatory application and review provisions under Wis. Admin. Code § PSC 112.05-.07, it is evident that the purpose of the CA law and its corresponding agency rules is to protect ratepayers by affording comprehensive review of proposed utility projects. See WPLII, 148 Wis. 2d at 892-93.
¶ 48. While the CPCN law also protects ratepayers, that is not the law's central focus. Rather, as demonstrated by the CPCN law's provisions, its central focus is to require the PSC to thoroughly and efficiently review applications for large-scale facilities to ensure that such facilities will comply with each of the factors listed under Wis. Stat. § 196.491(3)(d), many of which involve site-specific considerations for the facility's proposed locale. See Clean Wis., 282 Wis. 2d 250, ¶ 87 (noting "streamlined certificate application process" under CPCN law). For example, when evaluating an appli cation for a CPCN, the PSC must consider such site-specific factors as the "design and location" of the proposed facility, protection of "scenic beauty," minimization of "environmental impacts," protection of land use plans "for the area involved," and "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." § 196.491(3)(d)3., 3m., 3r., 4., 6. Indeed, soon after its passage, we referred to the CPCN law as the "plant siting bill," referring to the law's focus on the particular characteristics of the proposed facility's site. Falkner v. N. States Power Co., 75 Wis. 2d 116, 145, 248 N.W.2d 885 (1977); see also Clean Wis., 282 Wis. 2d 250, ¶ 16-17.
¶ 49. The CPCN law also affords ratepayer protections, but it does so by expressly incorporating the CA law wholesale. See Wis. Stat. § 196.491(3)(d)5. Therefore, we are not persuaded by WIEG's argument that the CPCN must be applied here because that law's mandatory hearing procedure better protects ratepayers. First, Wis. Admin. Code § PSC 112.05-.07 estab lish mandatory procedures by which the PSC must review an application for a CA. Accordingly, although the PSC might not require a contested case hearing in every instance, the PSC has imposed upon itself a duty to comprehensively review numerous factors relevant to the protection of ratepayers' interests. See Wis. Admin. Code § PSC 112.06(lm), .07. Failure to act reasonably upon such information would be an erroneous exercise of the agency's discretion. See Bd. of Regents of the Univ. of Wis. Sys. v. Wis. Pers. Comm'n, 2002 WI 79, ¶ 26, 254 Wis. 2d 148, 646 N.W.2d 759. Second, and more importantly, because the purpose of the CPCN law is to require more thorough review of local site-specific factors, and not primarily greater ratepayer protections, as WIEG contends, WIEG's focus on ratepayer protection under the CPCN law is misplaced.
¶ 50. The third premise supporting our conclusion that the PSC reasonably construed the CPCN law is that none of the options for modifying the CPCN law to make the law applicable to out-of-state facilities is as reasonable as construing the law as applying exclusively to in-state facilities. To validly apply out of state, certain statutory provisions that would preempt local laws would have to be severed from the CPCN law. Additionally, other provisions of the law directing the PSC and the DNR to review out-of-state factors might be validly applied, but doing so would not directly benefit the State of Wisconsin or its citizens. Accordingly, applying those provisions would lead to unreasonable or absurd results, but disregarding them would undermine the CPCN law's purpose of requiring thorough review of those site-specific factors.
¶ 51. In addition, the CPCN law includes numerous provisions that could involve the PSC and the DNR in out-of-state activities. For example, the PSC is required to send copies of a CPCN application to county-clerks and local libraries in the area of the proposed facility, Wis. Stat. § 196.491(3)(a)l., and the PSC must hold a contested case hearing "in the area affected" by a proposed facility, § 196.491(3)(b). Also, applicants must inform the DNR of the facility's expected impact on local natural resources, and the DNR is then required to notify the applicant of those permits that will likely be required for the facility. § 196.491(3)(a)3.a. And, as discussed, the PSC must review a proposed facility's impact on multiple site-specific factors. § 196.491(3)(d)3., 4., 6.
¶ 52. It is possible that these particular provisions would not necessarily require the PSC or the DNR to exercise extraterritorial control, in that the agencies might be able to consider relevant factors or mail materials to foreign depositories without trenching upon the exclusive regulatory authority of another state. However, requiring such actions by Wisconsin agencies "would burden local officials and sow confusion without serving any legitimate Wisconsin purpose." (PSC Interim Order at 6-7). More importantly, if a Wisconsin agency did prohibit or attempt to condition a person's construction of a facility in another state based on any of these factors, the agency's action could be construed as an attempt at extraterritorial regulation. Such interjection of authority into another state could undermine fundamental principles of federalism. See State Farm Mut., 538 U.S. at 421-22; Mueller, 44 Wis. 2d at 391.
¶ 53. Additionally, under the CPCN law, the PSC is directed to consider "public convenience and necessity," but it is not clear from the language of the statute which "public" would properly be considered for an out-of-state facility: residents of Wisconsin or residents of the facility's host state? If "the public" is construed to mean Wisconsin residents, it seems that a foreign facility would have little to no bearing on those residents' convenience and necessity, especially if the facility was not providing power to Wisconsin. Alternatively, construing "the public" to mean residents of a foreign state would impose an absurd requirement on the PSC: determining what is convenient and necessary for another state's residents.
¶ 54. Furthermore, two provisions of the CPCN law expressly preempt any local ordinance that would conflict with PSC decisions. See Wis. Stat. § 196.491(2r) and (3)(i). If applied out of Wisconsin, these provisions would require precisely the type of extraterritorial assertion of Wisconsin laws that we generally have forbidden. See Mueller, 44 Wis. 2d at 391.
¶ 55. To save the CPCN law from invalidation as applied to out-of-state facilities, WIEG urges that we sever those provisions that could not validly be applied to such facilities. Specifically, WIEG asks that we apply Wis. Stat. § 990.001(11), which provides that "[t]he provisions of the statutes are severable.... If any provision of the statutes . is invalid,... such invalidity shall not affect other provisions or applications which can be given effect without the invalid provision or application."
¶ 56. We have stated that severing invalid provisions is favored where doing so would not frustrate the purpose of a law. See State v. Janssen, 219 Wis. 2d 362, 378-79, 580 N.W.2d 260 (1998). Here, however, it seems that any severance would frustrate a significant purpose of the CPCN law, which is to require the PSC to consider multiple site-specific factors in determining whether a facility should be sited at a particular loca tion. We, therefore, decline to engage in severance as a means to save the CPCN law for application out of Wisconsin.
¶ 57. Alternatively, if we decline to sever those provisions and the CPCN law were applied to out-of-state facilities, the PSC would be required to undertake unreasonable, or even absurd, actions that would have little, if any, direct benefit on the State of Wisconsin or its residents. We construe statutes whenever possible to avoid unreasonable or absurd results. See Watton, 311 Wis. 2d 52, ¶ 14. Construing the CPCN to require, for example, that the PSC mail copies of applications to Minnesota libraries or thoroughly consider the impact of a Minnesota facility on the local ecology of Minnesota would be unreasonable and absurd.
¶ 58. Any unreasonable or absurd results are avoided by the PSC's construction of the CPCN law as applying exclusively to facilities in this state. As the PSC represented to us, "[e] it her the Wisconsin Legislature enacted a law that requires the PSC to ignore several of the law's provisions or the Wisconsin Legislature enacted a law whose every word has meaning, but applies only to in-state projects."
¶ 59. Accordingly, from the foregoing, we conclude that the PSC's interpretations of the CA and CPCN laws are reasonable, and that there is not a more reasonable interpretation of those laws.
III. CONCLUSION
¶ 60. Applying due weight deference, we conclude that the PSC's interpretation of the CPCN law as applying exclusively to in-state facilities and its decision to analyze WPL's application under the CA law were reasonable, and that there is not a more reasonable interpretation of the laws. The PSC examined the language, purpose, and context of both the CA and the CPCN laws and concluded that the CA law governed WPL's application to construct an out-of-state facility. Additionally, the PSC concluded that applying the CPCN law to an out-of-state facility would exceed the jurisdiction of Wisconsin laws and lead to unreasonable results. Based on our review of these statutes and the corresponding administrative rules, we conclude that there is not a more reasonable interpretation of the CA and the CPCN laws. Accordingly, we affirm the circuit court's order, which affirmed the PSC's November 6, 2008, Interim Order in PSC Docket No. 6680-CE-173.
By the Court. — The order of the circuit court is affirmed.
All subsequent references to the Wisconsin Statutes are to the 2009-10 version unless otherwise indicated.
The titles "Certificate of Authority," as referring to Wis. Stat. § 196.49, and "Certificate of Public Convenience and Necessity," as referring to Wis. Stat. § 196.491(3), are somewhat misleading, in that both laws refer to the PSC's consideration of "public convenience and necessity." Nonetheless, the parties have used these titles, and we adopt their terminology in this case.
The Honorable John C. Albert of Dane County presided in the circuit court.
All subsequent references to the Wisconsin Administrative Code are to the May 2008 version unless otherwise indicated.
Under Wis. Stat. § 990.01(26), "person" includes "all partnerships, associations and bodies politic or corporate."
Wisconsin Stat. § 560.13(l)(a) was renumbered as Wis. Stat. § 238.13(l)(a) by 2011 Wis. Act 32, § 3341.
The DNR application procedure continues parallel to the PSC application, with further timing requirements not relevant here. See Wis. Stat. § 196.491(3)(a)3.b.
Exception may be made if the PSC petitions the Dane County Circuit Court for an extension. Wis. Stat. § 196.491(3)(g). Upon a showing of good cause, the court may grant an extension for a maximum of 180 days more. Then, too, if the PSC fails to act on the application, the CPCN will be deemed to have been granted for the proposed facility. Id.
Under the CPCN, "persons" might be construed as including only those persons who are located in Wisconsin during the construction of facilities outside the state, thereby making the CPCN applicable exclusively to in-state "persons" subject to the State's regulatory authority. Even disregarding that such construction would still regulate out-of-state activity, such reading suggests a distinction between "types" of persons. For example, a partnership, which is considered a "person" under Wis. Stat. § 990.01(26), and which could potentially be understood to "remain" in Wisconsin while its out-of-state facility was constructed, might be treated differently than a natural person who is a resident of Wisconsin, but who might physically leave the state entirely to construct a "facility" out of state, thereby removing him or her from Wisconsin's regulatory authority. The statutory language does not support any such distinction between "types" of "persons," and we therefore decline to adopt such an interpretation.
The dissent misperceives the import of State v. Mueller, 44 Wis. 2d 387, 171 N.W.2d 414 (1969), when it asserts that Mueller stands for the proposition that the State may "regulate the out-of-state actions of 'persons.'" Dissent, ¶ 69. Mueller, who was a Wisconsin resident, was not sanctioned for marrying out of state; rather, he was sanctioned because, as a Wisconsin resident required to comply with Wisconsin law, he had failed to obtain an instate court order before marriage when child support was due in Wisconsin. Mueller, 44 Wis. 2d at 395. Mueller provides no support for extraterritorial application of the laws of Wisconsin to persons beyond the state's physical boundaries.
The PSC must also consider whether "brownfields . are used to the extent practicable." Wis. Stat. § 196.491(3)(d)8.; see Wis. Stat. § 560.13(l)(a) (renumbered as Wis. Stat. § 238.13(l)(a) by 2011 Wis. Act 32, § 3341) (defining brownfields as "abandoned, idle or underused industrial or commercial facilities or sites, the expansion or redevelopment of which is adversely affected by actual or perceived environmental contamination"); see also Scott W Brunner, Note, Sharing the Green: Reformatting Wisconsin's Forgotten Green Space Grant with a Public-Private Partnership Design, 95 Marq. L. Rev. 305, 309-19 (2011) (discussing local benefits of brownfield reclamation). WIEG points to the identical requirement in the CA law in support of its argument that the CA law is no more reasonable when applied to out-of-state facilities than is the CPCN. We conclude, however, that the qualification, "to the extent practicable," affords the PSC sufficient discretion to determine, in the context of an application for an out-of-state facility, whether the use of brownfields, either in Wisconsin or out of state, is "practicable."
The dissent repeatedly asserts that the CPCN provides "greater ratepayer protections." Dissent, ¶ 67, 79, 81, and 87. The dissent cites incomplete authority for its repetitive assertion. It summarily concludes that because the CPCN requires a hearing and the CA does not, the CPCN must provide "greater ratepayer protections." This contention ignores the facts of this case in which a public hearing was held. It also ignores the expertise of the PSC members and their commitment to carefully consider the applications for electric generating facility construction, which careful consideration included holding a public hearing.
We note that neither the CA law nor the CPCN law directly governs ratemaking per se. Instead, the PSC's determination of rates occurs under a separate provision, Wis. Stat. § 196.20(1), which states that "No change may be made by any public utility in its [rate] schedules except by filing the change as proposed with the commission." Here, WPL moved to reopen the Bent Tree docket after the project had been certified and construction commenced. It was in that separate proceeding, which included a contested case hearing, that the PSC allowed a rate increase for WPL's customers.
Primarily, WIEG argues that the large, 100-megawatt facilities that trigger the CPCN law are more expensive and, therefore, demand greater scrutiny to protect ratepayers. Cost, however, is not the criterion that the legislature adopted for the CPCN. Indeed, the PSC has reviewed applications under the CA law for facilities almost double Bent Tree's estimated cost of $497 million. See, e.g., PSC Docket No. 6630-CE-299, Certificate and Order, at 1,15, Application of Wisconsin Electric Power Company for Authority to Construct Wet Flue Gas Desulfurization and Selective Catalytic Reduction Facilities and Associated Equipment for Control of Sulfur Dioxide and Nitrogen Oxide Emissions at its Oak Creek Power Plant Units 5, 6, 7, and 8, http://psc.wi.gov/apps35/ERF_view/viewdoc.aspx?docid=97457 (certifying $830 million construction project under CA law).
Similarly, the dissent sets forth a chart listing purported contrasts in ratepayer protections between the CA and CPCN review processes. The dissent's chart, however, proceeds from the incorrect premise that the central purpose of the CPCN law is to protect ratepayers. As discussed above, the central purpose of the CPCN law is to ensure that the PSC gives due consideration to the environmental impact of large-scale facilities on the locales in which they will be sited. Moreover, while the dissent's chart lists mandatory findings that the PSC must make when approving large-scale facilities, the dissent does not provide statutory support for its conclusion that the legislature intended the CPCN law to be a "ratepayer protection" law, rather than, as this court recently recognized, a "plant siting law." See Clean Wis., Inc. v. Pub. Serv. Comm'n of Wis., 2005 WI 93, ¶ 16, 282 Wis. 2d 250, 700 N.W.2d 768. Furthermore, and as discussed above, the review procedures that the PSC has mandated under the CA law require the agency to consider the same information under that law as the legislature has required the agency to consider under the CPCN law. See generally Wis. Admin. Code § PSC 112.05-.07 (setting forth information that CA applicants must submit and which the PSC must consider).