EXHIBIT D-5
South Beloit Water, Gas and Electric Company
Docket No. EC00-120-000
FEDERAL ENERGY REGULATORY COMMISSION - OFFICE DIRECTOR
92 F.E.R.C. P62,266
ORDER AUTHORIZING DISPOSITION OF JURISDICTIONAL FACILITIES
September 27, 2000
OPINION:
On August 3, 2000, as supplemented on August 24, 2000, South Beloit Water,
Gas and Electric Company (South Beloit) filed an application pursuant to section
203 of the Federal Power Act (FPA)1 for Commission authorization to transfer
ownership and operational control of certain jurisdictional transmission
facilities to the American Transmission Company, LLC (American Transmission).
American Transmission will exercise control over these facilities until control
is assumed by the Midwest Independent System Operator (Midwest ISO) when the
Midwest ISO commences operations in 2001.
South Beloit is an Illinois corporation and a wholly-owned subsidiary of
Wisconsin Power & Light Company (WP&L). WP&L is a Wisconsin corporation and a
wholly-owned public utility subsidiary of Alliant Energy Corporation (Alliant
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1 16 U.S.C.ss.824b (1994).
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Energy).2 South Beloit provides retail electric service in areas adjacent to
the Illinois-Wisconsin State line. South Beloit's transmission system is in the
area of the Alliant Energy system known as the "Alliant Energy - East", and
contains less than one mile of 345 kV transmission facilities, ten miles of 69
kV transmission facilities, and one substation (the South Beloit transmission
system).
American Transmission is a transmission company created by Wisconsin law to
own and operate the high-voltage transmission system in Wisconsin. The Wisconsin
law encourages certain public utility affiliates of holding company systems in
Wisconsin to transfer ownership of their transmission assets so that American
Transmission will exclusively provide transmission services in geographic areas
formerly served by such utilities.3 However, under the provisions of the
Wisconsin law, American Transmission will be required to transfer operational
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2 South Beloit states that Alliant Energy was formed as a result of a
merger between WPL Holdings, Inc., IES Industries, Inc. (IES), and Interstate
Power Company (Interstate Power). WP&L, IES, and Interstate Power are
collectively referred to as the Alliant Energy Operating Company.
3 For purposes of defining the transmission facilities to be transferred to
American Transmission, a transmission facility is defined under the Wisconsin
statute to mean a facility that is not a radial facility and is designed to
operate above 130 kV. A facility from 50 kV through 130 kV that is not a radial
facility is presumed to be a transmission facility unless it is demonstrated to
the Wisconsin Commission that the facility is not a transmission facility.
Radial facilities or those facilities designed to operate at 50 kV or less are
presumed not to be transmission facilities unless the contrary is demonstrated.
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control of its facilities rated 100 kV and higher to the Midwest ISO or a
successor organization.
Under the proposed transaction, South Beloit will transfer ownership and
control of the South Beloit transmission system to American Transmission. South
Beloit states that these assets comprise its transmission facilities that
operate at voltages of generally 345 kV and 69 kV facilities. The transmission
facilities which are being transferred to American Transmission are listed in
Schedule A to the application.4 South Beloit explains that upon completion of
the proposed transaction, American Transmission will own and operate the South
Beloit transmission system.5
South Beloit contends that the proposed transfer of transmission assets
will not have an adverse effect on competition, rates or regulation and is
consistent with the public interest. In regard to competition, South Beloit
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4 According to the application, the facilities South Beloit will transfer
to American Transmission do not include distribution facilities used to provide
retail service. South Beloit states that distribution facilities include all
facilities with voltages below 50 kV, including the final circuit connection to
substations providing transformation or connection to any retail customer,
regardless of voltage level.
5 The Commission has already authorized WP&L to transfer ownership and
operational control of certain jurisdictional transmission facilities to
American Transmission in Wisconsin Power & Light Co., 90 FERC P61,347 (2000). In
addition, the Commission authorized Alliant Energy Corporation to transfer
operational control over certain jurisdictional transmission facilities to the
Midwest ISO in Alliant Energy Corporate Services, Inc., 90 FERC P61,344 (2000).
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states that the proposed transaction does not involve any generating assets, so
there will be no impact on the generation market. In addition, South Beloit
explains that service over the South Beloit transmission system transferred to
American Transmission will be provided under American Transmission's open access
transmission tariff. Therefore, South Beloit believes that American Transmission
will not have transmission market power as a result of the proposed transaction.
In regard to rates, South Beloit states it does not have any transmission or
wholesale bundled electric customers, and there are therefore no jurisdictional
customers whose rates can be affected by the proposed transaction. In regard to
regulation, South Beloit maintains that the proposed transaction will not impair
the effectiveness of Federal and state regulation. South Beloit explains that:
(1) it will remain a part of a regulated holding company, so the Commission's
jurisdiction will not be affected; (2) Alliant Energy agrees to abide by the
Commission's policy on intra-system transactions; (3) the Illinois Commerce
Commission will have full authority to regulate South Beloit and to regulate
markets and distribution facilities after the transaction; and (4) the
Commission will retain full authority to regulate transmission service provided
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by American Transmission, which will become a public utility upon completion of
the transaction.
South Beloit further explains that the proposed transaction is consistent
with the public interest because it will facilitate greater separation of
generation and transmission ownership. South Beloit contends that by
transferring all of its transmission facilities to a separate corporation,
American Transmission, and by agreeing to take transmission and ancillary
services for the delivery of all power sold by South Beloit to its customers,
the proposed transfer surpasses the Commission's requirements under Order No.
888.6
Notice of South Beloit's filing was published in the Federal Register with
comments, protests, and interventions due on or before September 7, 2000. A
timely motion to intervene raising no issues was filed by American Transmission.
Pursuant to Rule 214 of the Commission's Rules of Practice and Procedure,
18 C.F.R. ss. 385.214 (2000), the timely, unopposed motion to intervene serves
to make American Transmission a party to this proceeding.
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6 See, Promoting Wholesale Competition Through Open-Access Non-
Discriminatory Transmission Service by Public Utilities; Recovery of Stranded
Cost by Public Utilities and Transmitting Utilities, Order No. 888, FERC Stats.
& Regs. P31,036 (1996); order on reh'g, Order No. 888-A, FERC Stats. & Regs.
P31,048 (1997), order on reh'g, Order No. 888-B, 81 FERC P61,248 (1997), order
on reh'g, Order No. 888-C, 82 FERC P61,046 (1998).
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After consideration, it is concluded that the transfer of ownership and
operational control over the specified jurisdictional transmission facilities
from South Beloit to American Transmission is consistent with the public
interest and is authorized subject to the following conditions:
(1) The proposed transaction is authorized upon the terms and conditions
and for the purposes set forth in the application.
(2) The foregoing authorization is without prejudice to the authority of
the Commission or any other regulatory body with respect to rates,
service, accounts, valuation, estimates or determinations of cost or
any other matter whatsoever now pending or which may come before the
Commission.
(3) Nothing in this order shall be construed to imply acquiescence in any
estimate or determination of cost or any valuation of property claimed
or asserted.
(4) The Commission expressly reserves the right, pursuant to sections
203(b) and 309 of the Federal Power Act, to place further conditions
on the transfer for good cause shown.
(5) South Beloit shall promptly notify the Commission of the date on which
the transfer of jurisdictional facilities is consummated.
Authority to act on this matter is delegated to the Director, Division of
Corporate Applications, pursuant to 18 C.F.R. ss. 375.307. This order
constitutes final agency action. Requests for rehearing by the Commission may be
filed within thirty (30) days of the date of issuance of this order, pursuant to
18 C.F.R. ss. 385.713
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By:
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Michael C. McLaughlin, Director
Division of Corporate Applications
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