The Wisconsin Public Service Commission (PSC) has drafted a 425-page (plus appendices) environmental impact statement (EIS) as part of its investigation into restructuring (Docket No. 05-EI-114). The EIS examines a number of different proposed models. The "status quo" model would maintain the present regulatory structure, but the PSC admitted that the present rate case structure is time-consuming and does not respond quickly to changed circumstances.
The "plausible extreme" model proposes a single transmission system owner. Any firm would be allowed to own or construct generation facilities, and existing utility generation assets would be divested through a public auction or bidding process. The distribution system would be separated into a regulated monopoly of distribution lines, and an unregulated retail service entity.
The "flexible regulation" model would regulate generation, but utilities would be allowed to earn returns based on performance. The "incremental change" model would revamp regulation in the generation sector by eliminating certain regulatory activities in favor of measures to foster competition. Existing generation would not be transferable to a nonutility affiliate.
The "commercial" model would deregulate all generation, and set up three regional market structures: 1) a bilateral contract market in which buyers and sellers contract directly for supply, along with a derivatives market; 2) a short-term market in which customers purchase short-term or opportunity supply; and 3) a financial market that uses futures, derivatives, and contracts for differences.
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