Opinion ID: 2116768
Heading Depth: 2
Heading Rank: 1

Heading: Method of Measurement

Text: The commission determined that WCL's compensation for the private crossing should consist of two components: (1) compensation for the right of crossing, which is measured by the diminution in value of the right-of-way after installation of WSG's pipeline; and (2) compensation for the consequential damages that result directly from the construction and maintenance of the utility's crossing. WCL argues that using the diminution in value approach misinterprets sec. 196.04(4), Stats. WCL claims that if the legislature had intended diminution in value as the appropriate measure, it would have made an express provision in the statute as it did in sec. 32.09(6g), Stats., which specifies the compensation to a property owner for a utility easement. WCL maintains that the broad equitable and reasonable standard requires that WCL be compensated for the benefit to the utility of the crossing as well as WCL's loss. WCL attacks the consequential damages component as being outside the scope of the commission's authority. The commission distinguished between direct and indirect costs and ordered WCL to bill WSG only for direct costs, including reasonable overhead. WCL argues that the language of the statute neither warrants the distinction nor should it preclude recovery of administrative costs which WCL cannot identify on a one-for-one basis with specific license agreements. [7] As discussed above, sec. 196.04(4), Stats., grants broad discretion to the commission and we may not reverse its order unless we find that it has acted in an arbitrary or capricious manner. We now apply this standard to the commission's method of compensation. The commission selected the diminution in value measure after considering the testimony of the parties' two experts on valuation. The commission regarded it as the method which best comports with the statutory `equitable and reasonable' standard. The commission also noted that the supreme court had selected diminution in value as the appropriate compensation to a rail-road when a new highway was constructed across its tracks, a situation analogous to the case at bar. See Green Bay & W.R.R. v. Public Serv. Comm'n, 269 Wis. 178, 189-91, 68 N.W.2d 828, 833-34 (1955). These considerations provide a rational basis for the diminution in value approach. Furthermore, the commission's overall method of compensation reasonably balances competing interests and achieves several important objectives. First, it permits WSG to provide natural gas service in a cost-efficient manner, which in turn benefits the ratepayers. Second, it ensures that WCL is in no worse an economic position as a result of the pipeline crossing. Finally, it is consistent with the legislative intent underlying the statute. [3] [8] We conclude that the commission's method of compensating WCL for the private crossing represented a reasonable exercise of its discretion under sec. 196.04(4), Stats.