In June 1998, a young(ish) editor wrote an editorial in which he opined that widespread Wisconsin power blackouts were caused in part by the state’s inability to tap into outside sources of electricity. “Wisconsin would benefit if it could more easily get power from other sources — especially electric power from Canadian hydropower plants.”
That same year, the Wisconsin Legislature created American Transmission Company — a private, for-profit company that now owns most of the infrastructure for delivering power in Wisconsin and parts of three other states. That era also saw approval of the Midcontinent Independent System Operator, which runs the electric transmission system in parts of 15 U.S. states and the Canadian province of Manitoba.
That opinion editor (yours truly) is a lot older and grayer today. The transmission system, however, is much less creaky than it was a quarter-century ago.
Reliability is one issue at the core of one of the most intense debates in Wisconsin’s State Capitol, which boils down to a four-letter acronym that has especially divided majority Republicans among themselves. The issue is ROFR — short for “Right of First Refusal” — and it carries a sizable and politically electric charge of its own.
Data requested from ATC shows blackouts and brownouts since 2002 have been reduced by well over half, to about 38% of historic highs, so that part of the picture has improved. Opponents of the ROFR bills in the Legislature don’t seem to question that progress; their real problem lies with who gets to compete for building new power lines — and how much that costs ratepayers.
The bills in question mean Wisconsin utilities that are part of the ATC network would have the “right of first refusal” to construct such power lines, which would block out-of-state companies from bidding to build about $1.8 billion in new transmission lines approved by MISO. Opponents say that’s anti-competitive and would likely raise electric rates in Wisconsin, which already exceed the Midwest average.
Proponents argue costs won’t increase because states with ROFR laws in the MISO service area are able to spread planning and construction costs across the full system, per federal rules that currently allow such cost-sharing for regional projects. They also note that out-of-state firms would be required to go through MISO’s vetting process, which would add time and costs.
Some groups and members of the Legislature aren’t buying it. Organizations on the skeptical side include the Wisconsin Industrial Energy Group, which represents 25 of the state’s largest energy consumers; the Citizens Utility Board; AARP; the Wisconsin Institute for Law & Liberty; Clean Wisconsin and, perhaps most notably in some ways, Americans for Prosperity (AFP).
The AFP is a free-market network of advocates who are active nationwide, including Wisconsin, and it carries clout with many Republican lawmakers at the state and federal levels.
That is a major reason why there is a divide within both the state Senate and Assembly, where some members think the incumbent utilities that work with ATC and the MISO system shouldn’t be exempt from competition.
Pro-ROFR members in those GOP caucuses note that what’s worked for Wisconsin’s neighbors — including eight Republican-leaning states that have passed similar legislation by sizable margins — should be good enough at home. They ask: Why risk Balkanizing the MISO power system over what may be nothing more than a penny or two on the dollar?
The anti-ROFR lawmakers, as well as AFP, counter the waves of regulatory change unleashed by the Trump administration that will eventually lead to repeal of federal rules allowing the “in-state-only” bidding approach.
It’s still up for grabs how the debate will end, but one bottom line for both sides should be keeping the lights on in all kinds of conditions. Productivity, safety and health can be jeopardized when power systems go down — and demand is going nowhere but up.
Will ROFR ensure future reliability, or are opponents correct in asserting that out-of-state transmission line expertise is just as good as what may be found at home? The coming weeks will tell which way the political currents flow.
