Opinion ID: 1713897
Heading Depth: 1
Heading Rank: 8

Heading: Biases in EGEAS Variables

Text: ś 154. Clean Wisconsin next argues that the PSC ignored flaws in the EGEAS inputs, including artificially low reliability for existing facilities, artificially high availability for ERGS and inconsistent allocation of costs, which were all biased in favor of making ERGS look more attractive from a cost standpoint. It argues that these biases undermine the reliability of the EGEAS forecasts. ś 155. This issue was specifically addressed in the PSC's Final Decision: S.C. Johnson criticizes a number of modeling inputs, alleging that WEC is using improper engineering and fuel data for existing WEPCO units, an improper common systems cost allocation to the OCPP units, a demand and energy forecast that is too high, an improper addition of 200 MW of demand obligations for WPPI and MEUW, overly favorable engineering assumptions for the proposed SCPC units, and an improper early retirement of certain OCPP and Presque Isle units, while it is also ignoring the likely availability of additional energy efficiency efforts that would reduce the growth in electric demand. Commission staff evaluated these concerns, revised some of its assumptions, and prepared an EGEAS run to demonstrate how these changes would affect the optimal expansion plan. Because it includes additional energy efficiency to control electric demand, in addition to generation options, Commission staff described this run as an integrated alternative that integrates the energy priorities described in Wis. Stat. §§ 1.12(4) and 196.025. For example, this EGEAS run includes lower forecast demand and energy growth rates of 1.8 to 2.1 percent per year, instead of the 2.5 to 2.9 percent per year growth rates in the base forecast. In addition, a total of 600 MW of demand is stripped away from the WEPCO base electric demand forecast, in 200 MW increments every two years through 2011, to reflect a more aggressive approach to energy conservation. This integrated alternative also includes a less favorable 4 percent forced outage rate for the SCPC units. Even with the revised input assumptions of this integrated alternative, the EGEAS model results are not significantly different. EGEAS still selects an SCPC unit, by the year 2012. ś 156. While there is also evidence in the record rebutting the charge that various inputs were biased, the above discussion demonstrates that the PSC was aware of the alleged biases in input variables and that even after adjustments were made to account for alleged biases, EGEAS selected a coal-fired baseload plant. As the record is clear that the PSC was aware of these alleged biases and made substantial efforts to adjust its modeling to correct for any defects, we can find no error in the PSC's use of EGEAS modeling to assess the statutory requirements in § 196.491(3)(d)2.-3. The PSC clearly has discretion over what inputs are utilized for EGEAS modeling. Simply put, this court lacks the technical knowledge and expertise to dictate to the PSC what inputs it must utilize in its EGEAS modeling and the values for those inputs.
ś 157. Calpine argues that it is PSC policy to award CPCNs to the least cost alternative, and that in this case, Calpine's natural gas proposal for part of the project was the least cost alternative. Calpine cites to previous PSC decisions to support its argument that the least cost alternative is routinely approved. ś 158. This argument ignores the text of the Plant Siting Law and misconstrues the previous decisions of the PSC upon which Calpine relies. An examination of Wis. Stat. § 196.491(3)(d)2.-8. reveals that economics is but one factor in the multifaceted decision-making process the PSC utilizes. As we indicated in our discussion of the EPL supra, there is significant evidence in the record supporting the decision to use coal power for baseload capacity. ś 159. Contrary to Calpine's argument, prior decisions of the PSC demonstrate that cost is but one factor in the determination. For instance, Calpine relies on the following language from Investigation on the Comm'n's Own Motion, No. 05-EI-112 (Wis. PSC Dec. 28, 1993): Under the Commission's integrated planning and CPCN principles, the least cost overall choice is the option the utility will be authorized to pursue. Id. at 19. However, Calpine takes this statement out of context, as immediately preceding that statement, the PSC stated: The winner . . . at Stage One, is, by definition, the lowest overall cost alternative the utility has available, considering engineering, economic, health, safety, reliability, efficiency and environmental factors.  Id. (emphasis added). Furthermore, the PSC indicated in the same Final Decision that [t]he bidding process selected by the Commission requires consideration of a wide range of factors in selecting the winning bid(s). Id. at 23. ś 160. In the present case, the PSC clearly followed its past precedent of considering all of the statutorily mandated factors. We conclude there was no practice of selecting the least cost alternative while ignoring the other statutory factors.
ś 161. Calpine also argues that their natural-gas alternative could be operated as a baseload facility and that there was no basis for the PSC's determination that no gas-fired, baseload facilities were presented. Again, as indicated in our discussion of the evaluation of the EPL, there is significant evidence in the record supporting the decision to use coal power for baseload capacity in this case. Given the abundant evidence supporting the determination that coal power was the only cost-effective, technically feasible option for baseload capacity in this instance, we conclude that it was reasonable for the PSC to rule out natural gas as a baseload fuel. ś 162. In sum, we conclude that the PSC's interpretation of the Energies Priority Law and the Plant Siting Law are entitled to great weight deference. Further, we conclude that substantial evidence exists to support the various factual findings made by the PSC in applying the provisions of the EPL and Plant Siting Law in relation to the selection of type of fuel to be used in this project. Finally, we conclude that a rational basis exists to support the PSC's application of these provisions to the facts of this case to select ERGS as a site for new power generation and coal as a baseload fuel source.
ś 163. Calpine also argues that the PSC erroneously failed to apply the portion of the Plant Siting Law relating to consideration of adverse impacts of the proposed project on the environment. Pursuant to Wis. Stat. § 196.491(3)(d)4., the PSC must determine that [t]he proposed facility will not have undue adverse impact on . . . environmental values . . . . Although Calpine recognizes that the PSC made this finding, it advances two arguments as to why the PSC could not have made this determination. We reject both of them. ś 164. Calpine first contends that the PSC cannot lawfully make this finding because it has inconsistently applied the environmental requirements of Wis. Stat. § 196.491(3)(d)4. For support, Calpine marshals a total of two prior CPCN proceedings involving two of Calpine's facilities, the Fond du Lac Energy Center and a proposed Sherry plant. Regarding the Fond du Lac Center, Calpine claims that the PSC required Calpine to submit a full characterization of the effluent stream from the facilityâ including composition, flow rates, temperature, and proposed water treatment chemicals â and also required Calpine to confirm that all such characteristics were in compliance with applicable federal and state requirements. ś 165. Regarding the Sherry plant, Calpine argues that the DNR required Calpine to examine the use of certain off-site nonproject alternatives (such as the practicality of using another site already approved by the PSC) and alternative power sources at the Sherry site. To be consistent, Calpine claims that the PSC should have required a commensurate level of analysis for ERGS so that the PSC could have clearly demonstrated that ERGS would meet the requisite environmental standards. ś 166. We agree with the PSC that nothing in these two prior proceedings mandates how a Wis. Stat. § 196.491(3)(d)4. analysis is to occur in all cases. Requiring additional information in one project does not necessarily mean it is required in all. Given the particulars of these massive projects, and given the PSC's expertise in handling what specifics ought to be examined in a CPCN proceeding, we must defer to the PSC's determination of what information is required for it to make the required findings under § 196.491(3)(d)4. ś 167. Calpine's second argument is that the PSC improperly delegated its ultimate determination of no undue adverse impacts under Wis. Stat. § 196.491(3)(d)4. to the DNR. [37] The PSC's final decision recognizes that ERGS remains under continuing regulatory review by the DNR. The PSC noted that certain aspects of ERGS still required regulatory approvals from the DNR, and therefore, the PSC only conditionally issued the CPCN. This court has previously concluded that an agency may assume that any environmental consequences will be controlled through compliance with the applicable administrative code provisions. State ex rel. Boehm v. DNR, 174 Wis. 2d 657, 676, 497 N.W.2d 445 (1993). [38] ś 168. Additionally, this court has already recognized the DNR's special expertise on environmental matters. Wis. Envtl. Decade, Inc. v. DNR, 115 Wis. 2d 381, 398, 340 N.W.2d 722 (1983). Thus, it is not error for the PSC to rely on the DNR's expertise and regulatory approval process when making its finding under Wis. Stat. § 196.491(3)(d)4., even if those determinations are forthcoming. [39] Therefore, we reject Calpine's contention that the PSC erred by issuing the CPCN by failing to make the required findings under § 196.491(3)(d)4.
ś 169. Calpine argues that the PSC incorrectly applied Wis. Stat. § 196.491(3)(d)7., which requires the agency to conclude that [t]he proposed facility will not have a material adverse impact on competition in the relevant wholesale electric service market in order to grant a CPCN. After reviewing the PSC's discussion of the wholesale competition provision in the Final Decision, we reject these arguments and conclude Calpine fails to show the PSC's application of Wis. Stat. § 196.491(3)(d)7. was unreasonable. ś 170. In its Final Decision, the PSC stated that a determination under Wis. Stat. § 196.491(3)(d)7. requires an analysis of market power, which it defined as the ability of a firm to charge prices for its product above what a competitive market would allow. The PSC first noted that its analysis needed to focus only on horizontal market power issues because vertical market power issues were mitigated by the Midwest Independent System Operator's control over the ATC transmission system. The PSC then cited a 2000 market power study for the conclusion that the agency's rate reviewing power mitigated against market power. The PSC also noted that the Federal Energy Regulatory Agency allows WEPCO to sell in the Wisconsin Upper Michigan (WUMS) wholesale electric service market only at cost-based rates. ś 171. In response to concerns that approval of ERGS would have a material adverse impact on competition by preventing the development of a competitive wholesale generation sector and hindering further electric industry restructuring in Wisconsin, the PSC noted that WEPCO planned to continue contracting for power with independent power producers, and that W.E. Power LLC, the non-utility affiliate that would have majority ownership of the corporations that would construct and own ERGS, could more easily be divested by WEC than generating assets that are held within WEPCO, should a future legislature split generating plant assets away from utilities. ś 172. Calpine argues that the PSC incorrectly applied the wholesale competition provision because the PSC abandoned its focus on entry of competitors as the primary factor in applying the provision, and that the PSC relied only on its rate review authority, which does not prevent a material adverse impact on competition.
ś 173. Calpine argues that previous PSC Final Decisions have emphasized the need for competitors in the wholesale electric service market. For instance, Calpine cites Joint Application of Mirant Portage County LLC and Am. Trans. Co. LLC, No. 05-CE-116 (Wis. PSC Mar. 22, 2002) where the PSC stated: The record shows that an adverse effect on competition is unlikely because the Mirant Portage County power plant project would essentially act as a new entrant. . . . Consequently, the Portage County project would be adding a new competitor to WUMS, and thereby likely improving the competitive market. Id. at 10. Calpine also relies on Application of Fond du Lac Energy Center, LLC, No. 9343-CE-100 (Wis. PSC May 5, 2003), where the PSC stated: The record shows that an adverse effect on competition is unlikely because, even with the addition of the Fond du Lac Energy Center, Calpine will remain a relatively small operator of power plants in Wisconsin. . . . In summary, even though WUMS is a highly concentrated wholesale electric service market, the fact that Calpine's Fond du Lac Energy Center will act as a new entrant means that the facility is unlikely to have a material adverse impact on competition in WUMS. Id. at 13-14. ś 174. Calpine asserts that the PSC's analysis of Wis. Stat. § 196.491(3)(d)7. is flawed because ERGS does not introduce new competitors, while Calpine's proposal would have increased competition in the state. It argues that the focus on entry of competitors is supported by the state's policy of fostering competitive marketplaces as stated in Wis. Stat. § 133.01: 133.01. Legislative intent. . . . It is the intent of the legislature to make competition the fundamental economic policy of this state and, to that end, state regulatory agencies shall regard the public interest as requiring the preservation and promotion of the maximum level of competition in any regulated industry consistent with the other public interest goals established by the legislature. ś 175. We find Calpine's arguments unpersuasive. The plain language of the provision rebuts the assertion that introducing competition is the standard under Wis. Stat. § 196.491(3)(d)7., as the provision states only that a facility cannot have a material adverse impact on competition. While Wis. Stat. § 133.01 states the general policy of the state, § 196.491(3)(d)7. specifically addresses competition in the context of CPCN determinations. Where two statutes apply to the same subject, the more specific controls, and this is especially true where the specific statute is enacted after the general statute. Martineau v. State Conservation Comm'n, 46 Wis. 2d 443, 449, 175 N.W.2d 206 (1970). While introducing competitors can be one way in which the requirement of no material adverse impact can be met, it is not the only way to meet the requirement, as other PSC decisions demonstrate. ś 176. For example, in the Port Washington Order, the PSC stated: Capacity and energy from the PWGS facility will be provided to WEPCO via the Facility Lease, at rates this Commission regulates through its review of the lease's economic terms and conditions. This regulation prevents any material adverse impact on competition in WUMS. As the market power study conducted for the Commission in 2000 by Tabors, Caramanis and Associates found, fixed price contracts such as the proposed Facility Lease, mitigate market power. In addition, the Federal Energy Regulatory Commission only allows WEPCO to sell in WUMS at cost-based rates. . . . WEPCO plans to continue contracting for power with IPPs, obtaining up to 1,000 MW of capacity from these providers. Furthermore, a stand-alone generation company such as W.E. Power LLC could more easily be divested by WEC than generating assets that are held within WEPCO, should a future legislature split the generating plant assets away from utilities. For these reasons, the Commission finds that approval of the PWGS project will not create material adverse impacts on competition. Port Washington Order, at 24. ś 177. Likewise, in its Weston Order, the PSC stated: Wis. Stat. § 196.491(3)(d)7. requires the Commission to discern whether the addition of Weston 4 to WPSC's electric supply portfolio would have a material adverse impact on competition in the relevant wholesale electric service market. The Commission finds it would not. Prices, terms, and conditions of the capacity and energy being sold to native load customers will be regulated by the Commission. Weston Order, at 19-20. These examples indicate that the PSC previously has concluded that the wholesale competition requirement was met based on factors other than the introducing competitors rationale.
ś 178. Calpine argues that the PSC erred by reasoning that its rate reviewing power mitigated against market power. It contends the rate reviewing authority does not encourage the entrance of competitors. We reject Calpine's argument because as we concluded above, an application for a CPCN need not prove that the plan will introduce competitors into the wholesale electric service marketplace in order to meet the requirement in Wis. Stat. § 196.491(3)(d)7. that the proposed facility will not have a material adverse impact on competition in that market. ś 179. Calpine next argues that using the agency's rate reviewing power as a basis for meeting the wholesale competition requirement in Wis. Stat. § 196.491(3)(d)7. is in error because it renders § 196.491(3)(d)7. superfluous. In re Disciplinary Proceedings Against Trewin, 2004 WI 116, ś 38, 275 Wis. 2d 116, 684 N.W.2d 121 (2004) (`It is a cardinal rule that when interpreting a statute a court must attempt to give effect to every word, so as not to render any portion of the statute superfluous.')(citation omitted). Calpine argues that if the wholesale competition requirement in § 196.491(3)(d)7. can be met by the PSC's duty to regulate rates, then § 196.491(3)(d)7. is mere surplussage. ś 180. We reject this argument because we conclude that the PSC did not rely solely on its rate reviewing authority for its conclusion that the wholesale competition requirement was met. The PSC's rate reviewing power was one basis noted in the Final Decision that mitigated against market power. The PSC also noted that the Federal Energy Regulatory Agency allows WEPCO to sell in WUMS only at cost-based rates and that WEPCO planned to continue contracting for power with independent power producers. Further, the PSC noted that W.E. Power LLC, the non-utility affiliate that would have majority ownership of the corporations that would construct and own ERGS, could more easily be divested by WEC than generating assets that are held within WEPCO, should a future legislature split generating plant assets away from utilities. The PSC cited all of these factors as reasons it concluded ERGS would not materially harm competition, so the argument that PSC's rate review alone satisfies the wholesale competition requirement is not supported by the record. [40] ś 181. In sum, we reject Calpine's arguments that the PSC incorrectly applied Wis. Stat. § 196.491(3)(d)7. to its CPCN determination here. We conclude Calpine fails to show the PSC's application of Wis. Stat. § 196.491(3)(d)7. was unreasonable.
ś 182. As previously noted, WEC's CPCN application originally proposed two SCPC units and a single IGCC unit. Construction of these units would involve building certain common systems designed to service all three proposed units. The PSC ultimately approved the construction of only the two SCPC units. However, in its final decision and order, the PSC approved the construction of common systems capable of supporting a system output greater than that of the two SCPC units. The PSC reasoned: In approving construction of the SCPC units for 2009 and 2010, the Commission must ascertain the appropriate costs to be placed into each Facility Lease as the Approved Amount. ERGS includes common facilities that would serve 1,800 MW of new coal-fired capacity as well as 1,200 MW of existing coal-fired capacity from OCPP, i.e., a 3,000 MW campus at this site. Although the Commission has rejected the IGCC unit, it finds that a 3,000 MW coal campus remains an appropriate size, because it affords future planning flexibility to WEC. The additional cost of sizing common systems at 3,000 MW, instead of 2,400 MW, is approximately $20 million, which is a modest amount to pay in order to provide additional planning flexibility. Thus, the PSC's final order provided that [a]lthough the application to construct an IGCC unit is denied, [WEC] may construct common facilities with the SCPC units to accommodate up to 3,000 MW of generation at this site. ś 183. The circuit court vacated the PSC's order to the extent that it approved construction of common systems not necessary to operate a 2,400 MW facility. The circuit court noted that while the PSC's order demonstrated prudent foresight, authorization of the construction of these common facilities was error because there is to be no construction of any generating facility until there has been the issuance of a CPCN pursuant to § 196.491(3). The circuit court stated that by approving the common facilities, the PSC was forcing ratepayers to bear the cost of a facility for which a CPCN had not been issued. Additionally, the circuit court stated that allowing construction of these facilities would unduly influence the site selection for any future proposed utility construction. ś 184. Clean Wisconsin urges this court to affirm the circuit court's order, arguing that the PSC's order violated § 196.491(3)(d)2.-3. and that the PSC has effectively predetermined that additional coal units at this location are in the public interest, without considering alternative sites, at the same time that it explicitly determined that another coal unit is not in the public interest. Clean Wisconsin's Resp. Br. at 49. In contrast, the PSC and WEC argue that the PSC did not approve a new facility without a CPCN; rather, it merely authorized the construction of systems to service the two plants for which it did issue a CPCN and allowed those systems to accommodate future expansion. The PSC and WEC argue there is nothing in § 196.491 that prohibits the PSC's action in this regard. We conclude that the PSC's approval of the common systems was not contrary to law and had a rational basis. ś 185. First, we reject the suggestion of Clean Wisconsin and the circuit court that by authorizing the construction of common systems with excess capacity the PSC approved an additional facility without issuing a CPCN in violation of the Plant Siting Law. There is no dispute that the PSC would be required to issue a CPCN for the construction of a third facility. Wis. Stat. § 196.491(3)(a)1. However, the common systems approved by the PSC are not a facility, which is defined as a large electric generating facility or a high-voltage transmission line. Wis. Stat. § 196.491(1)(e). [41] The common systems to which Clean Wisconsin objects include a cooling water structure which will extend from the site onto Lake Michigan and also coal handling facilities. There is no dispute that this equipment is required to operate the two SCPC power plants the PSC approved. The PSC simply authorized WEC to size this equipment to support capacity in excess of the output of the two SCPCs. Simply put, nothing in the text of § 196.491(3) prohibits the PSC from authorizing integral components of a facility for which it issues a CPCN to be sized so as to support added capacity. ś 186. As the PSC's order does not contravene the express language of § 196.491(3), we must assess whether the PSC had a rational basis for authorizing some of the components of the SCPCs to be sized so as to support added capacity. The PSC's order stated: The additional cost of sizing common systems at 3,000 MW, instead of 2,400 MW, is approximately $20 million, which is a modest amount to pay in order to provide additional planning flexibility. In essence, the PSC concluded that it would be more cost effective to allow WEC to build needed systems larger than are necessary at the present time rather than requiring the construction of duplicate systems at a higher cost should there be a future expansion at the Oak Creek site. This clearly constitutes a rational basis for the PSC's order.
ś 187. Clean Wisconsin argues the PSC and DNR's EIS [42] did not adequately consider the environmental impacts of ERGS, as required by the Wisconsin Environmental Policy Act (WEPA), Wis. Stat. § 1.11. We disagree. ś 188. The purpose of WEPA is to insure that agencies consider environmental impacts during decision making. Boehm, 174 Wis. 2d at 665. That purpose includes effecting an across-the-board adjustment of priorities in the decision-making processes of state agencies. Wis. Envtl. Decade, Inc. v. PSC, 79 Wis. 2d 409, 416, 256 N.W.2d 149 (1977) ( WED III ). WEPA requires that agencies consider and evaluate the environmental consequences of alternatives available to them and undertake that consideration in the framework provided by [§ 1.11]. Boehm, 174 Wis. 2d at 665. WEPA constitutes a clear legislative declaration that protection of the environment is an essential mandate of every state agency and an essential component of state policy. WED III, 79 Wis. 2d at 416. WEPA does not directly control agency discretion; rather, it represents an important procedural step agencies must take during their decision-making process. Id. If the adverse environmental consequences of the proposed action are adequately evaluated, WEPA does not prevent an agency from determining that other values outweigh the environmental costs. See Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 351 (1989) ([National Environmental Policy Act] merely prohibits uninformedâ rather than unwiseâ agency action.). [43] ś 189. The purpose of the EIS is to enable agencies to take a hard look at the environmental consequences of a proposed action. Milwaukee Brewers Baseball Club v. DHSS, 130 Wis. 2d 56, 72, 387 N.W.2d 245 (1986); WED IV, 98 Wis. 2d at 690. To the extent that relevant information is complete and available, [44] the EIS shall evaluate reasonably foreseeable, significant effects to the human environment.... Wis. Admin. Code § PSC 4.30(1)(b). The required content of an EIS is set forth in the administrative regulations. See Wis. Admin. Code § PSC 4.30(3); Wis. Admin. Code § NR 150.22(2). ś 190. This court's review of an EIS is narrow. The PSC's determination that an EIS is adequate is a conclusion of law to which this court accords great weight deference. Citizens' Util. Bd., 211 Wis. 2d at 550. As such, it is not our role to evaluate the adequacy of the EIS; we instead evaluate whether the PSC's determination that the EIS was adequate was reasonable. Id. at 553-54. Clean Wisconsin bears the burden of demonstrating that the PSC's determination that the EIS was adequate was without a rational basis. ś 191. Aside from these principles, we are also mindful that [n]o matter how exhaustive the discussion of environmental impacts in a particular EIS might be, a challenger can always point to a potentiality that was not addressed. Id. at 554. While reasonable alternatives are to be considered, every potentiality need not be evaluated, as [t]he duty of an agency to prepare an EIS does not require it to engage in remote and speculative analysis. Milwaukee Brewers Baseball Club, 130 Wis. 2d at 72 (citing Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc., 435 U.S. 519 (1978)). We must assess an EIS in light of the rule of reason, which requires an EIS to furnish only such information as appears to be reasonably necessary under the circumstances for evaluation of the project rather than to be so all-encompassing in scope that the task of preparing it would become either fruitless or well nigh impossible. New York v. Kleppe, 429 U.S. 1307, 1311 (1976); See also Milwaukee Brewers Baseball Club, 130 Wis. 2d at 72. With these principles in hand, we now turn to Clean Wisconsin's arguments.
ś 192. Clean Wisconsin argues that the EIS did not analyze the availability and cost effectiveness of lower emitting alternatives to ERGS's SCPC units. Clean Wisconsin claims that ERGS will emit approximately two billion pounds of pollutants into the air over a projected 50 years of operation. As a consequence, Clean Wisconsin contends that the EIS was required to take a hard look at SCPC technology and consider whether alternative, cleaner technologiesâ such as wind, natural gas, or IGCCâ could be used at a reasonable cost instead of coal-fired technology utilized in ERGS. We conclude that there was a rational basis for the PSC to conclude that the EIS adequately addressed these concerns. ś 193. Chapter 4 of the EIS is devoted to the cost effectiveness of lower-emitting alternatives. [45] Our review of that section reveals that the PSC considered the environmental effects of taking no action, increasing energy efficiency (through conservation, load management, and fuel switching), the environmental costs of renewable fuel sources (wind, solar, hydro electric, biomass, and biogas sources), as well as natural gas as alternatives to ERGS. Most of the data concerning these alternatives is extremely technical. With regard to Clean Wisconsin's particular complaint, and as a distilled illustration, we note the EIS evaluated wind generation, both from on and offshore locations. The EIS explained that after considering the overall costs of wind generation (the credit to reserve margin, capital, and operating and maintenance costs, a capacity of 35 percent assuming a 16 mph wind at 100 meters two miles offshore, and the speculative continuing viability of the federal product tax credit for wind generation of $18 per MWh, adjusted for inflation), it is not likely capable of replacing ERGS as a stand-alone alternative. Applying great weight deference, we conclude that the PSC's determination that this evaluation was adequate is reasonable. ś 194. Regarding the consideration of natural gas, we note that the EIS evaluated Calpine's 523 MW natural gas plant proposal, as well as the consequences of a 30-year expansion that relied exclusively on natural gas. [46] Also, the EIS included an appendix incorporating another EIS completed for Calpine's Fox Energy Center, a 530 MW natural gas power plant. See also Wis. Admin. Code § PSC 4.60; WED III, 79 Wis. 2d at 424 n. 14 (agency should not ignore previous investigations). The Fox Energy Center EIS noted that project emissions from a natural gas-fired plant operating 100 percent of the time are much lower for most criteria pollutants than a similarly sized coal-fired power plant using the SCPC technology. Comparing the coal-fired ERGS with the 1050 MW natural gas-fired Badger Generating Plant, the Fox Energy Center EIS noted that emissions of NOx, CO, PM10, SO2, ammonia, and VOC (volatile organic compounds) are all significantly lower in the similarly sized natural gas plant. The Fox Energy Center EIS also noted that CO2 emissions from a 500 MW natural gas-fired combined-cycle plant would be about 450,000 tons per year compared to about 3.5 million or more tons per year for a 600 MW coal plant. ś 195. However, the EIS nevertheless concluded that because of the extreme volatility of natural gas prices, and the need for predictable planning, a natural gas alternative to ERGS was not cost effective. Thus, there is a rational basis to conclude that the EIS adequately addressed reasonable natural gas alternatives to ERGS. ś 196. Finally, Clean Wisconsin argues that the EIS was deficient because it failed to evaluate the effects of constructing enough IGCC units to equal ERGS's capacity. The EIS did note that EGEAS modeling demonstrated that the single 600 MW IGCC unit that was initially proposed as part of ERGS was not cost-effective. Given that the PSC determined that one IGCC unit was not cost effective, the PSC's decision not to evaluate a number of IGCC units in the EIS was not unreasonable. In addition, we note that there was no IGCC proposal submitted that would rival ERGS, and an EIS does not have to engage in remote or speculative analysis. Milwaukee Brewers Baseball Club, 130 Wis. 2d at 72. We therefore conclude that the PSC's determination that the EIS adequately discussed natural gas alternatives was reasonable.
ś 197. Next, Clean Wisconsin contends that the EIS failed to analyze alternatives to ERGS's once-through coolingâ a process that would aspirate cold water from Lake Michigan, cycle it through the plant for cooling purposes, and then dispel it back into Lake Michiganâ and failed to analyze the impacts this would have on Lake Michigan. The once-through cooling process would draw an enormous amount of water from Lake Michigan (approximately 740,000 gallons per minute), which would possibly kill millions of aquatic organisms every year. Clean Wisconsin notes that there are alternatives to this cooling process, including cooling towers (that withdraw less water and also reuse the water) and dry cooling (that uses very little water and would have virtually no adverse aquatic impacts). Clean Wisconsin also notes that the last coal-fired power plant that was built (in Pleasant Prairie) uses cooling towers. According to Clean Wisconsin, the EIS's failure to discuss these alternatives constitutes a fundamental violation of WEPA. Calpine also adds that the EIS failed to discuss the cumulative impacts of ERGS's once-through cooling. We disagree with both arguments. ś 198. At the outset, we note that the EIS thoroughly analyzed the consequences of once-through cooling. The EIS examined a monitoring study completed in the mid-1970s of the effects of OCPP's once-through cooling system on Lake Michigan. After noting the large number of aquatic organisms that were impinged and entrained due to this technology, [47] the EIS observed that the study ultimately concluded that once-through cooling has inconsequential effects on overall affected populations' ecosystems. [48] The EIS commented that the monitoring report determined: The absolute magnitude of the number of fish, larvae, or eggs impinged or entrained is not a measure of the significance of the impact. Rather, the losses must be evaluated relative to the sizes and productivity of the affected populations. The report concluded that, relative to the Lake Michigan fishery, the impacts of entrainment and impingement were inconsequential to aquatic life in Lake Michigan. The DNR concurred with that conclusion. ś 199. Regarding the discharged water, the EIS also indicated that a study of once-through cooling at the OCPP site along with several other studies for large power plants on Lake Michigan conducted in the 1970's concluded that operation of the power plants did not significantly affect fish populations in the general vicinity surrounding each facility, or in the far-field areas that were studied beyond thermal plume limits. Further, the EIS stated that [t]hese studies indicated that both the individual and the aggregate impacts of power plant cooling water discharges on the Lake Michigan ecosystem were insignificant, and were limited to localized shifts in fish distribution and periphyton growth in areas immediately associated with the thermal plumes. ś 200. Different minds can disagree on what constitutes inconsequential effects, but we are not making a qualitative assessment of our own, nor are we independently reviewing the PSC and DNR's conclusion. Instead, we are merely looking for whether there is a rational basis for the PSC to conclude that the EIS took a hard look at the environmental effects of the once-through cooling system. We conclude that there is. If the adverse environmental consequences of once-through cooling are adequately evaluated, WEPA does not prevent an agency from determining that other values outweigh the environmental costs. See Robertson, 490 U.S. at 350. Because the adequacy of the EIS is intertwined with factual, value, and public policy considerations, we will defer to those agencies whose responsibility it is to make those determinations. See Citizens' Util. Bd., 211 Wis. 2d at 552. ś 201. In addition to the studies from the 1970s, the EIS considered and discussed current data concerning the effects of the proposed once-through cooling structure. The EIS stated: In February 2003, the applicants submitted a report, titled Oak Creek Power Plant and Proposed Elm Road Station Cooling Water Intake and Lake Monitoring Study, February 2003. The report described the results from the first year of a two-year program, which will be used to determine the abundance of fish eggs and larvae in the vicinity of the existing on-shore intake structure and the site of the proposed new off-shore intake structure. The data presented in this and the final report will be used to help establish location, design, and operational parameters for achieving compliance with the impingement and entrainment reduction criteria in the proposed EPA regulations for intake structures at existing facilities. This report summarized data from icthyoplankton collections collected from June through September 2002, at transects near the present intake . . . and the site of the new intake. . . . This data clearly shows a marked reduction in total icthyoplankton densities at the 40 ft contour (the depth of the probable new intake structure site) in comparison to near-shore contours. Offsetting the benefit of the reduced icthyoplankton density at the far-shore intake site is the fact that the cooling water demand would increase incrementally as new units are added to the intake. The second phase of the study will involve near-shore and far-shore icthyoplankton collections from early May through September, 2003. Off-shore icthyoplankton sampling will be focused more precisely at the proposed intake location. This February report gave calculated intake velocities at the present nearshore structure ranging from 0.5 to 1.8 ft/second (one to four pumps, respectively). The proposed design velocity at the entrance to the proposed offshore structure (whether consisting of intake cribs or velocity caps) is 1.0 ft/second; however, a velocity range of 0.5 ft/second to 1.0 ft/second is under consideration as detailed design for the caps or cribs is finalized. It should be noted that limiting intake velocity is not the sole factor in determining how best to design an intake structure to minimize adverse environmental impacts to fish and other aquatic life. If the velocity is reduced, there is a proportional increase in the intake area needed. This would require additional cribs or caps. Since the location selected is a sandy featureless area of the lake bottom, the potential impacts of adding more structure to the lake bottom must be weighed against the potential benefits of reducing the approach velocity. Based on Electric Power Research Institute report [a report drafted in December of 2000], a velocity of 1 ft/second has the potential to pull in salmon that are less than 10 cm in total length. This is based on EPRI's review of all published or otherwise available fish swim speed data. These data generally show that small (under 10 cm in length) salmon have sustainable swimming speeds that are less than 1 ft/second. Small salmon greater than 10 cm in length size have swimming speeds that are typically greater than one ft/second. Thus, these larger fish should be able to avoid the currents surrounding the intake structure caps/cribs. Data are not available for trout, but the swimming speeds are expected to be similar to salmon. If fish enter the tunnel and reach the pumphouse, fish removal will occur at the traveling water screens. The traveling water screens for this project have not yet been selected, but there are designs and operations (low pressure and/or continuous screen wash) that can increase fish survival if impingement occurs. (Footnote omitted.) ś 202. In addition to the above in-depth discussion concerning the effects of the intake component of the proposed once-through cooling system, the EIS similarly discussed the effects of the water discharge component of the proposed once-through cooling system. For example, the EIS provided: Potential impacts of construction of the water discharge structure The impacts to Lake Michigan from the construction of the discharge structure include temporary impacts such as local increases in turbidity within the water column, reductions in local dissolved oxygen levels, and the reductions in local light penetration. The construction of the discharge structure would also temporarily disrupt and possibly destroy the local flora, fauna and aquatic habitat, including fish. Measures such as silt curtains or turbidity barriers would be required to reduce the extent of these temporary impacts. The long-term effects of the placement and operation of the discharge structure include a loss or modification to the existing aquatic and nearshore habitat area, and changes to local water quality. If the discharge structure is placed north of the existing coal dock the presence of the discharge structure may disrupt local wildlife species which utilize the sand beach in this area and would likely require more frequent maintenance dredging of the discharge channel due to littoral drift in this area. Potential impacts of operation of the water discharge structure The anticipated maximum flow through rate for each SCPC unit and the IGCC is 485,000 gpm with a temperature rise of 12 [degrees] F. The maximum heat rejection rate for the three units combined would be 8,740 million BTU/h. The primary effluent from the OCPP is once-through cooling water from the steam condensers. No chemicals are added to the water; therefore, temperature is the only water quality parameter significantly affected by the discharge of cooling water. Heated effluent from the two proposed SCPC units would be discharged north of the coal dock through either a single or combined outfall structure or combined with the SCPC outfall. . . . . Zebra mussel control At the lake bottom intake structure, the only option for zebra mussel control would be manual cleaning by divers. The intake drop shafts and tunnels should not have significant zebra mussel accumulations because velocities would be too high (over six feet per second) for mussel settlement to occur. Pump house wet wells, frames for the traveling water screens, pump bell housings and other on-shore equipment would also need to be periodically cleaned. Plant service water would be treated using the copper ion generator that has been successfully used at the existing OCPP units 5-8. This device involves the electrolytic dissolution of a low level of copper ions and also releases an aluminum floc. Parts-per-billion levels of copper cause the mussels to be agitated and the inside of the plant water system becomes less habitable. Mussels likely would continue to free float through the system and ultimately be returned back to the lake. Furthermore, the aluminum floc forms a coating inside of piping, heating exchangers and other equipment using service water which helps inhibit zebra mussel settlement. The copper ion generator is located downstream of the traveling water screens. Condenser cooling water zebra mussel treatment is not anticipated based on operational experience at other WEPCO facilities on Lake Michigan. This could differ at the ERGS units depending on the water quality from the off-shore intake location and metallurgy of the condenser tubing. At this time, there is not a specific plan for controlling zebra mussels in the condenser cooling water. ś 203. In sum, the EIS contained a plethora of data concerning the environmental impacts of the proposed once-through cooling system, including both older and newer studies of the likely effects of the system on the local aquatic environment. In addition to noting a variety of likely adverse environmental impacts of the proposed once-through cooling system, the EIS also discussed proposed remedial action and strategies to lessen the projected effects. [49] We conclude that the data and factual findings contained in the EIS concerning the projected adverse environmental consequences of the once-through cooling system allowed the PSC to take a hard look at the environmental consequences of this proposed action, Milwaukee Brewers Baseball Club, 130 Wis. 2d at 72, and provided it with a rational basis to conclude that the EIS adequately described the effects of once-through cooling. We again emphasize that the EIS is an informational tool that does not compel a particular decision by the agency or prevent the agency from concluding that other values outweigh the environmental consequences of a proposed action. ś 204. The EIS also acknowledged that coal-fired plants could be constructed using cooling towers, although the efficiency of such plants would likely be reduced. Commenting on the draft EIS, several entities [50] requested that the EIS discuss other possibilities to once-through cooling. The EIS writers responded: Once through cooling water and closed-cycle cooling are commonly used cooling alternatives. WEPCO has proposed to use once-through cooling water for the ERGS. The Clean Water Act does not prohibit the use of once-through cooling water, nor does it compel anyone to use closed-cycle cooling. DNR does not have the authority to require closed-cycle cooling for this project. In addition, the EIS explained that it would be premature to discuss the comparative effects of once-through cooling versus closed-cycle cooling or cooling towers until the DNR and EPA agree on the BTA to which the ERGS facility would be held. [51] ś 205. While an EIS should analyze reasonable alternatives to the proposed action and discuss measures that can mitigate environmental harm, it is not required to discuss unreasonable alternatives. Milwaukee Brewers Baseball Club, 130 Wis. 2d at 72. We construe the EIS's writers' response as concluding that cooling towers are not a reasonable alternative due to the DNR's inability to require them. The EIS writers essentially concluded that until the EPA and DNR determined the BTA applicable to the ERGS facilities, it would not be reasonable to discuss some alternatives the DNR would not be empowered to require through its permit process. See Citizens' Util. Bd., 211 Wis. 2d at 556 (Section 1.11, Stats., does not require an agency to `engage in remote and speculative analysis[.]'). Given that the PSC is best situated to determine what constitutes a reasonable alternative, we cannot conclude that the PSC's determination that this analysis is reasonable lacks a rational basis. See id. at 553, 560 (PSC may rationally limit its EIS discussion to what it found was reasonably necessary to meet present needs). ś 206. Regarding the EIS's discussion of mitigating the harm from the once-through cooling process, the EIS responded to another criticism that the draft EIS did not sufficiently discuss once-through cooling or how it can be deemed to be best technology available. The EIS stated: EPA has promulgated regulations for cooling water intake structures for new facilities, and has proposed regulations for cooling water intake structures for existing facilities. Both the promulgated 316(b) regulations for new facilities and the proposed 316(b) regulations for existing facilities provide for site-specific alternatives to the use of a cooling tower. Currently, US EPA and the DNR disagree on which regulation is applicable to the ERGS facilities. It has been the DNR's position that the proposed existing facility regulation is applicable to the ERGS project. The EIS states that, regardless of the characterization of the proposed units as new or existing under the 316(b) requirements, the WPDES permit will require Best Technology Available (BTA). If ultimately the DNR and EPA agree that the intake should be regulated under the promulgated new facility regulation, then WEPCO would request a site-specific determination of the BTA. At that juncture, the DNR would require the comparative impact analysis of closed versus open cycle cooling. If ultimately the DNR and EPA agree that the intake should be regulated under the proposed existing facility regulation, then the DNR will require WEPCO to demonstrate that the location, design, and operation of the intake will reduce fish and shellfish impingement mortality by 80 to 95 percent and entrainment by 60 to 90 percent. Fish deterrent systems, barrier nets, modified Ristroph screens with fish return systems, aquatic filter barriers, variable speed pumps, fine mesh traveling screens, angled and modular inclined screens, and low pressure spray washes may be used. Siting of the intake is also critical for minimizing impingement and entrainment. In general, the littoral zone of large lakes, such as Lake Michigan, serve as the principal spawning and nursery area for most species of freshwater fish, and is considered one of the most productive areas of the waterbody. The placement of the intake structure beyond the littoral zone should reduce impingement and entrainment. The 2002/2003 study that WEPCO is currently conducting is intended to be part of that demonstration. If WEPCO is unsuccessful in demonstrating the percent reductions, it would seek a site-specific determination of BTA. At that juncture, the DNR would require the comparative impact analysis of closed-versus open-cycle cooling. (Final two emphases added.) ś 207. The EIS's recognition that the applicants will have to work with the EPA and DNR to achieve BTA regardless of whether the facility is considered new or existing demonstrates how the intake structure will have to mitigate harm. An EIS may be validly approved by the agency even though conditioned on further development of mitigation measures. County of Bergen v. Dole, 620 F. Supp. 1009, 1061 (D.N.J. 1985). Because the environmental evaluation process is a continuing one, it is not necessary, nor is it possible, that every detail be contained in the [EIS]. General commitments to future action suffice to meet mitigation requirements. Id. Therefore, it is reasonable to conclude that this particular commitment to inter-agency cooperation with the DNR and EPA satisfies the EIS's mitigation assessment obligation.
ś 208. Clean Wisconsin also contends that the EIS failed to analyze alternatives to the OCPP site. We do not agree. ś 209. As the EIS noted, the site selection process started with over 140 potentials. Due to 55 screening criteria of various social, environmental, technical, and economic considerations, that number was narrowed down to five: Pleasant Prairie (in Kenosha County); Haven (in Sheboygan County); Ozaukee (in Ozaukee County); Little Suamico (in Oconto County); and North Oak Creek (in Milwaukee County), also known as the OCPP. ś 210. The sites in Ozaukee and Little Suamico were eliminated due to the increased cost of acquiring substantial amounts of land and the environmental impact of developing greenfield sites. The Haven site was rejected because of its irregular shape and because once-through cooling was not available. Similarly, the Pleasant Prairie site was eliminated because it could not accommodate all of ERGS's facilities and because cooling towers would have to be constructed given the significant distance from Lake Michigan. See Custer County Action Ass'n v. Garvey, 256 F.3d 1024, 1041 (10th Cir. 2001) (Alternatives that do not accomplish the purpose of an action are not reasonable.). ś 211. Upon evaluating the North Oak Creek site, other possible sites near the southern end of WEPCO-owned OCPP property in Racine County were identified. All of these sites, which shared the advantages of once-through cooling and use of existing transmission and rail line infrastructure, were the sites that were eventually identified in the CPCN application: One of the proposed sites is in the city of Oak Creek in Milwaukee County at the east end of Elm Road, north of the existing OCPP. This site is referred to as the North Site throughout this EIS. A second site, the South Site, is located south of the existing OCPP along the lakeshore. A variation of the South Site was proposed as the applicants' third site alternative. For purposes of description and analysis in this document, this alternative will be referred to as South-Exp Option. ś 212. Clean Wisconsin renews its argument that these OCPP sites are not alternatives. We have previously determined that it was reasonable for the PSC to consider the OCPP alternatives as alternative sites. The EIS noted some of the distinctions between the sites that we discussed supra: 1) having building footprints in different municipalities and counties resulting in different entities receiving shared-revenue payments if the ERGS proposal is approved, 2) separate service water discharge locations, and 3) significant differences in the amount of excavation required to build and safely operate the facilities. The EIS proceeded to analyze the sites' existing structures and general topography, as well as how the terrain will have to be redesigned and augmented to accommodate ERGS. In addition, the EIS noted significant differences in wetland impacts among the OCPP alternatives and differences in other environmental impacts, such as air quality. Thus, we are satisfied that there is a rational basis to conclude that the EIS adequately considered alternate sites.
ś 213. Clean Wisconsin's next argument is that the EIS fails to present sufficient information regarding ERGS's adverse impacts with regard to health consequences from air pollution. WEPA requires an EIS to disclose any significant health consequences of a proposed action's environmental impacts. See Baltimore Gas & Elec. Co. v. NRDC, 462 U.S. 87, 106-07 (1983) (concluding that NEPA requires an EIS to disclose the significant health, socioeconomic, and cumulative consequences of the environmental impact of a proposed action). We are satisfied that the PSC had a rational basis for concluding that the EIS adequately discussed ERGS's health impacts. ś 214. Chapter 7 of the EIS discussed the air emissions from ERGS and the general health and environmental concerns related to these pollutants. For example, the EIS noted that not only has particulate matter been correlated with increased hospitalizations for asthma attacks, worsening of lung disease, and heart disease, it has also been estimated to cause over 15,000 premature deaths in the United States per year. ś 215. Regarding the effects of NOx, the EIS stated: High levels of NO2 may be fatal to humans, while lower levels affect the delicate structure of lung tissue. Humans exposed to high concentrations suffer lung irritation and potential lung damage. Long-term lower levels of exposures can destroy lung tissue, leading to emphysema. Concentrations of NOx as low as 0.1 ppm, can cause lung irritation and measurable decreases in lung function in asthmatics. Children, the elderly and people with lung diseases, such as asthma, emphysema or bronchitis are sensitive to NOx. ś 216. Similarly, regarding SO2, the EIS stated: Sulfur dioxide causes a wide variety of health and environmental impacts because of the way it reacts with other substances in the air. SO2 irritates the respiratory system and can cause pronounced health problems. Sulfate particulates are a primary factor in the production of hazy atmospheric conditions. Acid rain is caused by SO2 and NOx reacting with other substances in the air (see Acid Rain section). Corrosion and damage to metals and masonry may also result from increased sulfur dioxide emissions. Severe health effects are associated with increased sulfur dioxide emissions. Peak levels of SO2 in the air can cause breathing difficulty for people with asthma. Long-term exposure to high levels of SO2 gas and particles may cause respiratory illness and aggravate existing heart disease. Sulfate particles are associated with increased respiratory symptoms, respiratory disease, and premature death. Exposure to high concentrations of sulfur dioxide for short periods of time can constrict the bronchi and increase mucous flow, making breathing difficult. Children, the elderly, those with chronic lung disease, and asthmatics are especially susceptible to these effects. In comparable fashions, where possible, the EIS also discussed acid rain, greenhouse gases (as they relate to global warming), VOCs, HAPs (hazardous air pollutants), and mercury. [52] ś 217. Moreover, in response to a specific request that the EIS [p]rovide information on the human health effects, morbidity, and mortality related to the emission of the proposed ERGS facilities, the EIS added: The chemicals found in emissions from coal-fired power plants are known to adversely affect the respiratory system (as well as have other effects), depending on the concentrations and the duration of exposure. Several scientific studies in recent years have found a relationship between increased levels of air emissions from these types of sources and increased respiratory symptoms. This means that people with existing lung diseases such as asthma, bronchitis, emphysema, and other diseases could experience an increase in the severity and frequency of symptoms as a result of increased emissions. There is evidence in the scientific literature that increases in particulate matter levels can also cause morbidity and mortality as well. Infants and children breathe in more air per pound of body weight and are perhaps more susceptible due to developing immune and nervous systems and other factors related to growth. Children can also be more active and spend more time outdoors and experience increased exposure to outdoor air pollution as a result. In addition, mercury is emitted from coal-fired combustion. Mercury has been associated with neurological and other effects (here the main exposure route is through ingestion of fish). In summary, there are numerous hazardous air pollutants released into the air from coal combustion. Past DNR analyses have evaluated the virgin fossil fuel exemption and found that, from the inhalation perspective, the risks resulting from well controlled facilities with tall stacks are low. Thus, a facility that meets applicable Wisconsin DNR requirements would not be likely to cause a significant inhalation risk. It is also true however, that as concentrations of air pollutants increase, even if they are below a federal or state standard, that there is a likelihood of increased respiratory symptoms and other adverse health effects occurring. For example, in the case of fine particulate matter (PM2.5), when US EPA evaluated the available data on health effects vs. exposure, there was no clear threshold that defined a safe vs. unsafe level of exposure. ś 218. We agree with the PSC that the EIS's evaluation constituted a hard look at the environmental health consequences from ERGS's air pollution emissions. Although Clean Wisconsin may take issue with the PSC's failure to somehow quantify the precise health impacts of ERGS, we find that the PSC's determination that the EIS adequately evaluated the health impacts of ERGS was reasonable.
ś 219. Given the significant concentration of baseload power generation at the OCPP site, Clean Wisconsin asserts that there will be considerable strain on the high voltage transmission system, which would inevitably require upgrades that would not be required if the generation was located elsewhere. Because of the massive construction that will be required to complete these improvements, Clean Wisconsin contends that the EIS was required to consider the accompanying environmental consequences. To the extent that it could, the EIS does do this. ś 220. Insofar as Clean Wisconsin's arguments relate to problems that will arise with ERGS construction, chapter 6 of the EIS discussed issues pertaining to transmission lines. In that chapter, the EIS described the necessary interconnections, the substation changes that will have to occur on the OCPP site, possible system-wide transmission projects, and stability issues, including associated solutions and ongoing studies. Recognizing that certain transmission improvements could change after further study, the EIS assumed that ERGS will need a major new transmission line to connect to the electric system. The EIS noted that rebuilding existing transmission line rights-of-way minimizes environmental effects, because land uses have adjusted to the barrier of the right-of-way and because the right-of-way is already disturbed to some extent. In contrast, should new lines need to be constructed, the EIS explained that the level of environmental effects will vary, depending on the location of the new right-of-way and the design of the structures. ś 221. Insofar as Clean Wisconsin's argument relates to future problems that may arise and the environmental consequences that the answers to those problems could pose, those are merely potentialities that may come to fruition; possibilities that an EIS is not legally required to consider. See Milwaukee Brewers Baseball Club, 130 Wis. 2d at 72. Given the little available information regarding the required transmission lines at the time the EIS was drafted, we conclude that the PSC's determination that the discussion is adequate is reasonable.
ś 222. Clean Wisconsin also argues the EIS is deficient in its assessment of wetland impacts. We again disagree. ś 223. Chapter 8 of the EIS discussed a variety of wetland issues, including the potential impact of ERGS. Depending on the eventual site chosen, the EIS quantified the estimated wetland acres that would be filled (to create berms and for grading) and the corresponding wetland reduction percentage. Chapter 8 and chapter 10 (entitled Land Resources) also discussed the secondary impacts on surrounding wetlands. The EIS recognized that at the time of its drafting, no mitigation plans or strategies had been proposed that would minimize the consequences of placing fill in wetlands. ś 224. Even absent mitigation plans, and regardless of the site chosen at OCPP, the EIS considered that four of the eight wetlands would remain unaffected, while the remaining four would be reduced anywhere from 12-20 percent. Therefore, we conclude that the PSC had a rational basis to conclude the EIS was adequate with regard to wetland impacts.
ś 225. Lastly, Clean Wisconsin maintains that the EIS's responsiveness summary is inadequate. However, this argument is little more than an adornment of its previous arguments, particularly its contentions that the EIS did not adequately discuss cooling towers, mitigation measures, and health-related impacts from air pollution. We have already rejected these arguments above, and therefore, we do not address them further here. ś 226. We once again emphasize that our review of the EIS adequacy determination is not a review of the PSC's factual findings. Citizens' Util. Bd., 211 Wis. 2d at 550. Because the PSC's determination of the adequacy of the EIS represents its conclusion that the requirements of Wis. Stat. § 1.11 have been met on the facts before it, we defer to the PSC as the agency whose responsibility it is to make that determination. Id. at 552. In sum, we conclude that the PSC's determination that the EIS was adequate is reasonable.
ś 227. Clean Wisconsin argued to the circuit court that the PSC improperly issued the CPCN before WEC obtained all necessary permits from the DNR as required by Wis. Stat. § 196.491(3)(e). [53] The circuit court agreed and vacated the PSC's order on that ground. Before this court, the PSC argues that the circuit court's holding was erroneous. We agree, and therefore reverse the circuit court's holding as to the legitimacy of the PSC's issuance of the CPCN conditioned on the future action of the DNR. ś 228. In order to obtain a CPCN, a utility must navigate the stringent procedural requirements of Wis. Stat. § 196.491. This statute requires the PSC and DNR to operate in tandem to accomplish the legislative goal of approving a utility's plan to construct a new facility capable of generating over 100 MW of electric power. Given the mammoth scope of that regulatory task, the timeline is tight. The following time requirements apply to the interplay between the DNR permitting process and the PSC's CPCN decision. ś 229. First, at least 60 days before filing a CPCN application, the utility shall provide the [DNR] with an engineering plan. Wis. Stat. § 196.491(3)(a)3.a. Within 30 days of receiving the engineering plan, the DNR must respond with a list of permits required to construct the proposed facility. Id. Twenty days after the DNR provides the list of required permits, the utility must apply for the identified permits. Wis. Stat. § 196.491(3)(a)3.b. Thirty days after receiving the permit applications, the DNR must make a completeness determination, and 120 days after a favorable completeness determination, the DNR must take final action on the applications. Id. Thus, theoretically the DNR permit approval process should take, at most, 200 days from the filing of the engineering plan to the DNR's final action. ś 230. The soonest the applicant may submit the CPCN application to the PSC is 60 days after the initial submission of the engineering plan to the DNR. Wis. Stat. § 196.491(3)(a)3.a. Thirty days after the applicant submits the CPCN application, the PSC's completeness determination is due. Wis. Stat. § 196.491(3)(a)2. ś 231. Upon pronouncing the application complete, the PSC has 180 days to approve the completed application. Wis. Stat. § 196.491(3)(g). This period may be extended, by court order, for an additional 180 days. Id. Thus, the PSC approval process theoretically takes, at most, 210 days, or 390 days if the PSC receives a court-ordered extension. ś 232. The PSC must remain cognizant that it may not issue a certificate of public convenience and necessity under this subsection until the [DNR] has issued all permits and approvals identified in the listing specified in par. (a)3.a. that are required prior to construction. Wis. Stat. § 196.491(3)(e). ś 233. Theoretically, this should not be an obstacle, because the DNR must act within 200 days after the utility files the engineering plan, or 140 days after the utility files the CPCN application with the PSC. Therefore, at the time of DNR final action, the PSC should still have at least 40 days (and potentially as many as 220 days) to finish its evaluation of the application. ś 234. However, the closely interrelated nature of the legislative timelines means that the PSC's timeline is at the mercy of any difficulties that arise in obtaining the DNR permits. In reality, these two separate timelines do not always march in lockstep. For example, the utility often must submit several different permit applications to the DNR. In this case, the DNR required separate permits for air pollution impacts, a site grading permit, a stormwater permit, and other water-related permits and approvals. If even one of these permit approvals falls behind schedule, it is possible, as happened here, that the DNR will not have fully acted at the time when the PSC must make a final decision on the CPCN application. This lag in the timeline can occur for many reasons. For example, the DNR may determine that one particular permit application is not complete, thus setting back the timeline applicable to that particular permit. ś 235. If, for whatever reason, the DNR permits are not timely issued, the PSC is placed in a precarious position. [54] If the PSC's time limit elapses before final DNR action, the PSC effectively has four options: 1) deny the application; 2) take no action, and thus passively allow the CPCN to become effective by operation of law; [55] 3) unconditionally approve the application in violation of its statutory duties; or 4) conditionally approve the application. ś 236. In this case, it is undisputed that the applicant had not obtained all the required DNR permits at the time the PSC issued its final decision. [56] The PSC chose the fourth option listed above; it conditionally approved the CPCN. In its final decision, under the heading Certificate of Public Convenience and Necessity, the PSC stated: W.E. Power LLC . . . may commence construction of two 615 MW . . . electric generating units, as described in WEC's project application and modified by this Final Decision . . . . Application of Wis. Elec. Power Co., No. 05-CE-130 at 56 (Wis. PSC Nov. 10, 2003). The PSC conditioned its approval of the CPCN as follows: This Final Decision takes effect on the day after it is mailed. The CPCN for the ERGS facility takes effect only when the DNR issues all permits and approvals that it identified, pursuant to Wis. Stat. § 196.491(3)(a)3.a., as being required prior to construction of the facility. Id. at 62. ś 237. Upon reviewing the order, the circuit court determined that the PSC acted improperly: [Wisconsin Stat. § 196.491(3)(e)] plainly states that the Commission shall not do what is being done here, issue the CPCN before the regulatory permits have been obtained . . . . Potentially, this is a matter of substantial consequence. The Commission in its Order notes the possibility that [if] the planned draw of 1.4 billion gallons of Lake Michigan water daily is not approved, cost of the proposal will escalate by some $200 million and may even preclude project viability. The approval stated in the Order was issued in clear violation of sec. 196.491(3)(e), Wis. Stats. It is the Order of this court that the PSC Order is hereby vacated and the matter remanded to the Commission to permit the applicant to demonstrate that the required regulatory permits have been obtained. ś 238. On appeal, the PSC raises two theories to justify its action and explain why it believes the circuit court is mistaken. First, the PSC argues that its final decision did not actually issue the CPCN; rather, it simply approved the utility's CPCN application. [57] Second, and alternatively, the PSC argues that it gave full effect to the statute by issuing the CPCN but staying its effectiveness until the DNR issued the necessary permits. ś 239. We implicitly rejected the PSC's first argument in RURAL, 239 Wis. 2d 660. In RURAL, the PSC approved a CPCN with the condition that RockGen Energy shall obtain from [the] DNR all permits and approvals that are required before beginning any construction. Id., ś 58. The court determined that this approach, a conditional order, effectively issued the CPCN. See id., śś 16, 58, 61. ś 240. Our RURAL opinion did not fully explain the reason for its use of that terminology, so that we here proceed to make explicit what is implicit in RURAL. If we agreed with the PSC that the CPCN did not issue until the DNR permits became effective, we would effectively be amending the statute to allow the PSC to extend the time limit within which it must finally act to approve or deny a utility's application. We decline to do so. [58] ś 241. We agree with Clean Wisconsin that the statute contemplates only one decision by the PSC. If the PSC's decision did not take effect until after the DNR's final action, the PSC's final decision would not be final. Rather, it would be an interim endorsement anticipating the final action: issuance of the CPCN. The statute is clear: the PSC must take final action within the statutory time period. Accordingly, we hold that the PSC's final decision conditionally issued the CPCN. ś 242. Alternatively, the PSC argues that if the court finds, as we do, that its decision issued the CPCN, such conditional issuance was the only way for the PSC to reasonably harmonize and give full effect to the language in § 196.491(3)(e), the impending statutory timelines, and the need to maintain an adequate energy supply. In arguing this point, both parties rely on the RURAL decision. ś 243. In RURAL, the court evaluated the PSC's action on a CPCN application submitted under the nonstatutory provisions of 1997 Wis. Act 204, § 96. Those provisions decreased the time limit within which the PSC had to make a final determination on a CPCN application from 180 days to 90 days; however, the provisions applied for only a limited time and with respect to only certain eastern Wisconsin utilities. See 1997 Wis. Act 204, § 96. At the end of the 90-day period, the DNR had not acted with respect to one permit. RURAL, 239 Wis. 2d 660, ś 60. As it did in the instant case, the PSC conditionally issued the CPCN. Id., ś 58. ś 244. On review, the appellant environmental group argued that by so doing, the PSC violated § 196.491(3)(e). This court disagreed, given the particulars of this case. . . . [H]ad the PSC strictly complied with Wis. Stat. § 196.491(3)(e), the result would have defeated, rather than fulfilled, the purpose of § 96 and Act 204. Id., ś 59. Instead, the court approved the PSC's method: We believe that the PSC took an approach that not only harmonized the conflicting mandates of § 96 and Wis. Stat. § 196.491(3)(e), but also fulfilled the purpose to expedite the construction of much-needed electric generation capacity. Id., ś 61. ś 245. The PSC cites this language as evidence of the court's recognition of the PSC's power to condition a CPCN upon the DNR's issuance of the required permits. However, the court in RURAL appeared to limit its holding: Where the PSC has before it an application to process according to the longer timeline in Wis. Stat. § 196.491(3), the PSC should, and could, comply with subdivision (e). Id., ś 59. That is exactly the situation presented here. The PSC basically argues that this single sentence from RURAL is inconsistent with the rest of the opinion, and asks us to withdraw it as dicta because the RURAL court's concern about harmonizing the statute and the need for reliable energy generation applies similarly to applications made under § 196.491. ś 246. We conclude that great weight deference is appropriate as to this issue. First, the legislature has specifically charged the PSC with the interpretation of chapter 196. Under Wis. Stat. § 196.02(1), 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. ś 247. Second, unlike the situation in RURAL, the PSC is not interpreting nonstatutory provisions of a recently passed act. Instead, it is applying § 196.491(3)(e), which it has exclusively administered since that statute's enactment in 1975. Before the circuit court, the PSC reiterated: [T]he commission's interpretation of the law that describes when DNR permits should be issued has been its standard practice for many years and remains its standard practice today. . . . [W]e always stay the execution of our CPCN orders until after the necessary DNR permits have been received. ś 248. Third, there is no dispute that the agency employed its expertise and specialized knowledge in forming this interpretation. Fourth, while we may not necessarily agree that the PSC's interpretation of the statute is the best available, we conclude that it will provide uniformity and consistency in the application of the statute in that the PSC, the DNR, utilities, and the public have a standard rule under which to operate. Once we have determined that the PSC's interpretation of this issue is subject to great weight deference, we need merely decide whether that interpretation is reasonable. Harnsichfeger, 196 Wis. 2d at 661 (collecting cases). ś 249. Therefore, we proceed to evaluate the PSC's interpretation of the statutory language to determine whether it is reasonable. Statutory interpretation begins with the plain language of the statute. State ex rel. Kalal v. Circuit Court for Dane County, 2004 WI 58, ś 45, 271 Wis. 2d 633, 681 N.W.2d 110. However, the statute is not interpreted in a vacuum; it is considered in the context of the surrounding provisions. Id., ś 46. ś 250. It is certainly true, as Clean Wisconsin points out, that the statute says the PSC may not issue the CPCN before the DNR has issued the necessary permits. However, it also is true that the PSC has the power to issue conditional orders. Wis. Stat. § 196.395; [59] see also RURAL, 239 Wis. 2d 660, ś 59. This power, though, is not unlimited. Rather, the power contained in sec. 196.395 to issue conditional . . . orders is subject . . . to the procedural requirements of other provisions of ch. 196, Stats., because they are in pari materia. RURAL, 239 Wis. 2d 660, ś 59 (quoting Mid-Plains Tel. v. PSC, 56 Wis. 2d 780, 787, 202 N.W.2d 907 (1973) (quoting Wisconsin Tel. Co. v. PSC, 232 Wis. 274, 287 N.W. 122 (1939))). ś 251. Clean Wisconsin argues that the PSC's power to issue conditional orders does not extend to waiving the directives of § 196.491(3)(e), because that would violate the in pari materia rule expressed in RURAL and our earlier cases. Nevertheless, the RURAL court allowed the PSC to condition CPCN issuance on DNR permit issuance, plainly a procedural requirement[] of other provisions of ch. 196. Id. ś 252. These competing interpretations do not conclusively settle the question of whether the PSC's interpretation is reasonable. Accordingly, we proceed to review the legislative history of the statute and the administrative history of the PSC's interpretation in order to determine whether the PSC's present interpretation is reasonable. ś 253. The PSC's interpretation is longstanding and consistent, and in fact predates the passage of the CPCN law. Before 1975 utilities had to obtain a certificate from the PSC authorizing them to commence the construction of any public utility plant, extension or facility. . . . Wis. Stat. § 196.49(1) (1975). The PSC thus certified that public convenience and necessity require such work. . . . Wis. Stat. § 196.49(4) (1975). ś 254. In 1977, considering WEC's 1975 application to construct a coal-fired power plant in Kenosha County, the PSC conditioned its certificate on three prerequisites, including: That applicant obtain any needed authorization from the Wisconsin Department of Natural Resources in the areas in which that department has jurisdiction. [60] ś 255. The duties of the PSC sharply increased in 1975. In that year, the legislature passed Assembly Bill 463, which became chapter 68, Laws of 1975. The essential language in current § 196.491(3)(e), like most of § 196.491, dates back to that act. It has changed little since. In 1975, the provision read: The [PSC] may not issue a certificate of public convenience and necessity until the [DNR] has issued all permits and approvals designated under sub. (2m) as necessary prior to the issuance of the certificate of public convenience and necessity. See ch. 68, Laws of 1975. ś 256. One piece of the legislative history of 1975 Assembly Bill 463 seems, at first glance, to run counter to the PSC's interpretation. An early draft of the bill contained the language: A failure of the department to have issued any of the permits or approvals for which preliminary application has been made under par. (a) may not prevent issuance of the certificate of convenience and necessity, but the applicant may not undertake the specific part of the construction or the specific operation until the permit or approval therefor has been granted by the department [of natural resources]. Drafting records, ch. 68, Laws of 1975, on file at Wisconsin Legislative Reference Bureau, Madison, Wisconsin. This language, deleted from a subsequent draft, embodies the approach that the PSC now uses. The deletion of this language from the draft weighs against the reasonableness of PSC's interpretation of the statute. ś 257. However, the 1975 law as enacted contained a provision authorizing the DNR to waive compliance with § 196.491(3)(e): At any time prior to the issuance of the certificate of public convenience and necessity, the department may, in consultation with the commission, waive the necessity of obtaining any such permit or approval in advance of such certificate.  Wis. Stat. § 196.491(2m) (1975) (emphasis added). This provision established an escape hatch that allowed the PSC to avoid the dilemma that occurs when the PSC's time limit for action draws to a close before the DNR has issued its final decision on the permit applications. ś 258. 1997 Wis. Act 204 removed the DNR's authority to waive compliance with § 196.491(3)(e) and reinstated the potential for the PSC to face the present dilemma. Shortly thereafter, the PSC began conditioning CPCN grants on DNR permit approvals; in fact, within the past five years, almost all its CPCN orders have been so conditioned. [61] ś 259. Under these circumstances, we agree with the RURAL court that the PSC's conditional issuance approach harmonizes the goal of the statutes with the purpose [of] expedit[ing] the construction of much-needed electric generation capacity. RURAL, 239 Wis. 2d 660, ś 61. As the court put it: [T]he PSC reasonably interpreted and applied both § 96(1)(e)3. of Act 204 and Wis. Stat. § 196.491(3)(e) to give them both full effect by issuing the certificate here with the condition that [the utility] obtain all necessary permits prior to starting construction. Id. The same is true of the PSC's interpretation of § 196.491(3)(e) in this case. Had the PSC simply approved the CPCN without conditions, or through inaction allowed the CPCN to be approved through operation of law, it would have acted without regard for the requirements of § 196.491(3)(e). It did not do so. By conditionally approving the CPCN, it maintained the requirements of that section while simultaneously satisfying the strict time limits of chapter 196. ś 260. The PSC and the DNR are independent regulatory agencies. The PSC has no authority to order the DNR to complete its review by a certain date. Clean Wisconsin argues that if Wisconsin Electric had timely filed all the appropriate permit applications with the DNR, then the DNR would have been forced to take final action before the PSC did. Yet nothing in § 196.491 gives the PSC the authority to extend the statutory time limits based on the applicant's, or the DNR's, failure to act within other time limits. The PSC is limited to the options described above. ś 261. We further observe that, practically speaking, the PSC's approach works. In this case, for example, the DNR has now issued the required permits. The PSC's method prevents applicants from escaping compliance with § 196.491(3)(e) while simultaneously maintaining the reliable supply of energy for the public. The PSC has simply concluded that rather than make an applicant start from scratch and begin the cycle again, it will conditionally issue the CPCN so long as the applicant has complied with the other statutory requirements. This does not excuse the applicant from ultimately complying with § 196.491(3)(e) and obtaining the necessary permits, and thus, the object of the statute is maintained. ś 262. Under the great weight deference standard of review, our role is not to say whether we believe the PSC's approach is the best way to handle this regulatory issue. We are limited to deciding whether it is a reasonable agency decision that comports with the purpose of the statute. See RURAL, 239 Wis. 2d 660, ś 46 (quoting UFE, 201 Wis. 2d at 286-87). Because we cannot say that the PSC's approach fails that test, we reverse the circuit court's decision vacating the PSC's order pursuant to this issue.
ś 263. On April 2, 2003, the City of Oak Creek entered into an agreement with WEC and its subsidiaries regarding the construction of ERGS. The agreement included provisions relating to air quality issues, the redevelopment of certain property, payment of mitigation costs, and the compromise of city claims. The agreement noted that it is anticipated that the construction and operation of the new facilities may have certain effects on the City and that in order to mitigate any such effects on the City, WEC and the City desire to enter into this agreement. ś 264. The section of the agreement pertaining to payment of mitigation costs provided, in pertinent part: WEPCO shall support, and shall use its best efforts to have approved, an annual mitigation payment to the City in the amount of $1.5 million for the first unit (Elm Road Unit 1), $750,000 for the second unit (Elm Road Unit 2), and $250,000 for the third unit (Elm Road Unit 3), respectively (a Mitigation Payment). If, and to the extent, approved by the PSCW, Mitigation Payments will be made on a calendar year basis. The first Mitigation Payment for each unit shall be made thirty days after commencement of construction . . . of a unit. Thereafter, Mitigation Payments shall be paid in one annual payment on June 30th each year during the Lease Term. . . . The obligation to pay Mitigation Payments is independent of the receipt of shared revenue funds from the State of Wisconsin and of any future changes in state law pertaining to utility taxation. Notwithstanding anything to the contrary contained herein, in no event will WEC or any of the Subsidiaries have any obligation under this paragraph 3 in the event that (i) the PSCW determines that the payments described in this Section 3 may not be properly included in the rent payments under the Facility Lease, or (ii) a unit of the New Facility permanently ceases operation after start-up and is decommissioned. There is no dispute that the mitigation payments to which the agreement refers will be passed onto ratepayers if the agreement is approved and that the mitigation payment is contingent upon WEC's ability to pass the costs of the payment on to ratepayers. ś 265. In its final decision and order issuing the CPCN, the PSC approved only partial mitigation payments under this agreement. The PSC limited mitigation payments to the period during which ERGS would be constructed, noting that a change in state law pertaining to shared revenue would offset the City's costs once ERGS was constructed: This new shared revenue program commences the annual payments when a generating unit becomes operational. Shared revenue payments to the city of Oak Creek will be $1.6 million for the first SCPC unit and increase to $3.2 million for the second unit. These payments will be added to the shared revenue payments that the city is currently receiving for the existing OCPP [$750,000 per year]. Under Act 31, the annual state shared revenue payments to the city of Oak Creek when ERGS is completed will exceed the amount the city is requesting in the form of mitigation payments from WEPCO ratepayers. Thus, mitigation payments are not required while compensating shared revenue dollars for ERGS are forthcoming. The shared revenue payments, however, will not begin until 2009 when SCPC 1 is first scheduled to be in service, and the city has introduced evidence that it will begin incurring costs as soon as construction commences. For this reason, the Commission finds it appropriate to authorize annual mitigation payments, as described in the Development Agreement, for the period from the commencement of construction of SCPC 1 until the year when SCPC 2 enters service, which is scheduled for 2010. The shared revenue payments for ERGS that commence in 2009, however, will partially offset the city's costs and it is appropriate to reduce the annual mitigation payment by the amount of shared revenue that the city receives for ERGS. When ERGS is fully in service, the shared revenue payments will fully replace any mitigation payment under the Development Agreement, so any further mitigation payment cannot be billed to WEPCO. If, however, state shared revenue payments decrease during the course of the 30-year Facility Lease and are no longer sufficient to offset fully the mitigation payment that would have been paid under the Development Agreement, the Commission finds it reasonable for W.E. Power LLC to make a partial mitigation payment to the city that equals the remaining portion. ś 266. Following the PSC's final decision and order, the legislature enacted 2003 Wis. Act 89. Section 33 of 2003 Wis. Act 89 created Wis. Stat. § 196.20(7) (2003-04). [62] This section provides: (a) In this subsection, mitigation payment means, as approved by the commission, an unrestricted or recurring monetary payment to a local unit of government in which an electric generating facility is located to mitigate the impact of the electric generating facility on the local unit of government. Mitigation payment does not include payments made or inkind contributions for restricted purposes to directly address health or safety impacts of the electric generating facility on the local unit of government. (b) Except as provided in par. (c), an electric public utility may not recover in rates any of the following: 1. The cost of mitigation payments paid by the utility. 2. The cost of mitigation payments paid by the owner or operator of an electric generating facility that the owner or operator recovers from the utility by selling electricity to the utility, by leasing the facility to the utility, or by any agreement between the owner or operator of the electric generating facility and the public utility. (c) The commission shall only approve a mitigation payment agreement that is received by the commission before June 10, 2003, and, if the commission finds the agreement to be reasonable, shall not subsequently modify the agreement. ś 267. The City sought review of that portion of the PSC's order modifying the mitigation payment agreement. When addressing this issue, the circuit court noted: The parties agree that the agreement between the City of Oak Creek and WEC was submitted to the PSC before June 10, 2003 and involves a mitigation payment within the meaning of sec. 196.20(7), Wis. Stats., as amended by 2003 Wisconsin Act 33. The parties further agree that the treatment of the agreement by the PSC is to be governed by section 196.20, Wis. Stats., as amended by 2003 Wisconsin Act 89, Section 33, effective December 18, 2003 . . . . ś 268. The circuit court concluded that under the statute, the PSC was limited to accepting a mitigation payment agreement in whole or rejecting it in whole. Thus, the circuit court concluded that the PSC was without jurisdiction to modify the agreement. As such, it remanded this issue to the PSC to accept or reject the agreement in whole. ś 269. Before this court, the PSC argues that § 196.20(7) does not apply retroactively and that in any event, it does not curtail the PSC's ratemaking authority or require the PSC to approve a mitigation agreement in its entirety. In contrast, the City argues that the PSC has waived any argument that § 196.20(7) does not apply retroactively, as it conceded the applicability of the statute in the circuit court. The City asserts that § 196.20(7) specifically exempts payments for health and safety impacts from the statutory limitations. As such, the City argues that the PSC had no authority to review the reasonableness of payments for health and safety impacts. In the alternative, the City asserts that even if § 196.20(7) is inapplicable, the PSC erroneously exercised its ratemaking authority under Wis. Stat. § 196.37 because there is not substantial evidence to support the conclusion that passing the mitigation payments onto ratepayers would be unjust or unreasonable. ś 270. We begin by first addressing the issue of waiver. The waiver rule is a rule of judicial administration, and as such, a reviewing court has the inherent authority to disregard a waiver and address the merits of an unpreserved issue in exceptional cases. Also, Wis. Stat. §§ 751.06 and 752.35 provide a procedural mechanism for discretionary appellate review and reversal on grounds not preserved in the circuit court. Village of Trempealeau v. Mikrut, 2004 Wi 79, ś 17, 273 Wis. 2d 76, 681 N.W.2d 190 (citation omitted). ś 271. We believe this case to be one of the exceptional cases where it is appropriate to relieve parties of any waiver. Given the public importance of the legal issues and ultimate result in this case, it is more important in this instance to settle the legal issues raised correctly, rather than hold parties to any waiver. We also note that if we were to hold the PSC to any waiver regarding the retroactive application of § 196.37, the City would be precluded from arguing that the agreement at issue falls within the exclusion to the statutory definition of mitigation agreement in § 196.20(7)(a). The circuit court specifically stated: The parties agree that the agreement between the City of Oak Creek and WEC was submitted to the PSC before June 10, 2003 and involves a `mitigation payment' within the meaning of sec. 196.20(7) . . . . (emphasis added). ś 272. Wisconsin Stat. § 196.20(7)(c) provides: The commission shall only approve a mitigation payment agreement that is received by the commission before June 10, 2003, and, if the commission finds the agreement to be reasonable, shall not subsequently modify the agreement. There is no dispute that the agreement in this case was received by the PSC before June 10, 2003. [63] However, the effective date of 2003 Wis. Act 89 was December 17, 2003, a full month after the PSC rendered its final decision and order. [64] Although § 51 of 2003 Wis. Act 89 contained three specific initial applicability provisions, § 196.20(7) was not listed in any of them. ś 273. Simply put, 2003 Wis. Act 89 was not in effect on November 10, 2003, the date the PSC rendered its final decision and order in this case. Thus, there simply was no way the PSC could have evaluated the mitigation payment agreement in this case under the standards set forth in § 196.20(7). Further, there is nothing in the text of 2003 Wis. Act 89 that expressly indicates the legislature intended § 196.20(7) to apply retroactively to PSC orders issued before the Act's effective date. Likewise, there is no necessary implication in the text of § 196.20(7) that the statute was intended to apply retroactively. State v. Chrysler Outboard Corp., 219 Wis. 2d 130, 162, 580 N.W.2d 203 (1998). ś 274. That the statute provides the PSC shall only approve a mitigation payment agreement that is received by the commission before June 10, 2003 does not necessarily implicate an intent that the statute apply retroactively. Given the effective date of 2003 Wis. Act 89 and the absence of § 196.20(7) from the initial applicability provisions of § 51 of the Act, the only necessary implication in the statute is that the statute applies to mitigation payment agreements received by the PSC prior to June 10, 2003, that are considered by the PSC on or after December 18, 2003. A contrary conclusion would require every mitigation payment agreement approved or rejected by the PSC issued prior to December 18, 2003, to be reconsidered. Therefore, we conclude that Wis. Stat. § 196.20(7) does not apply to the agreement at issue in this case. [65] ś 275. The City concedes that if § 196.20(7) does not apply to this case, then the PSC decision in relation to the agreement between the City and WEC is to be evaluated under § 196.37, governing the PSC's ratemaking authority. As noted supra, under the agreement, the mitigation payments from WEC are contingent upon the PSC approving the payments as part of WEC's Facility Lease. Given that the Facility Lease is part of WEC's PTF expansion project, which is designed to provide adequate service to ratepayers, the PSC would be required to allow WEC to pass the costs of the lease onto ratepayers, Wis. Pub. Serv. Corp. v. PSC, 109 Wis. 2d 256, 263, 325 N.W.2d 867 (1982), assuming such increased rates were not unjust or unreasonable. Wis. Stat. § 196.37(2). ś 276. Wisconsin Stat. § 196.37(2) provides: If the commission finds that any measurement, regulation, practice, act or service is unjust, unreasonable, insufficient, preferential, unjustly discriminatory or otherwise unreasonable or unlawful, or that any service is inadequate, or that any service which reasonably can be demanded cannot be obtained, the commission shall determine and make any just and reasonable order relating to a measurement, regulation, practice, act or service to be furnished, imposed, observed and followed in the future. ś 277. The City agrees that in analyzing the PSC's determination under the framework of § 196.37(2), the appropriate inquiry is whether the PSC's decision had a rational basis. The PSC's final decision and order notes that due to a substantial change in the state's shared revenue law, the City will receive an annual sum of money exceeding the sum the City would receive from WEC ratepayers once the first proposed power plant is scheduled to be in service. Under the new law, municipalities hosting a power plant are to be paid double and sometimes triple what they receive under the current law. ś 278. The PSC concluded that mitigation payments are not required while compensating shared revenue dollars for ERGS are forthcoming. The PSC further concluded that the increased money in shared revenue would partially offset the city's costs once the first plant is in service and once both plants were in service the shared revenue payments will fully replace any mitigation payment under the Development Agreement[.] The PSC further noted the annual state shared revenue payments to the City of Oak Creek when ERGS is completed will exceed the amount the city is requesting in the form of mitigation payments from [WEC] ratepayers. Therefore, the PSC ruled that it is appropriate to reduce the annual mitigation payment by the amount of shared revenue that the city receives for ERGS. ś 279. The PSC, noting the City would incur costs during the construction of ERGS, left intact the mitigation payments in full while the first SCPC is being constructed and merely reduced mitigation payments during the construction of the second SCPC in proportion to the amount of money the City would receive in increased shared revenue. Bearing in mind that one of the purposes of judicial review of final orders of the PSC is to protect the interests of the ratepayer, Algoma, 91 Wis. 2d at 265, we cannot conclude that the PSC's decision that ratepayers in this state should not be double-taxed for the ERGS project is without a rational basis. ś 280. While the City argues that the costs of ERGS project to the City are far in excess of the amount requested as mitigation payments, the PSC specifically found that mitigation payments are not required while compensating shared revenue dollars for ERGS are forthcoming. Given the public hearing testimony that the increased shared revenue payments are almost exactly the same amount as the city is requesting in the form of mitigation payments[,] we cannot conclude the PSC's finding was without substantial evidence. Therefore, we uphold the PSC's determination that the mitigation payments to the City from ratepayers under its agreement with WEC should be reduced in an amount corresponding to the increased monies the City will receive in the form of shared revenue. As such, we reverse that part of the circuit court's decision reversing and remanding this issue to the PSC.