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COURT OF APPEALS
NOTICE
DECISION
DATED AND FILED                                                     This opinion is subject to further editing.   If
published, the official version will appear in
the bound volume of the Official Reports.
October 29, 2009
A party may file with the Supreme Court a
David R. Schanker                                                                                                      petition to review an adverse decision by the
Clerk of Court of Appeals                                                                                              Court of Appeals.   See WIS. STAT. § 808.10
                                                                                                                       and RULE 809.62.
                                                                                                                       Cir. Ct. No.   2007CV2380
Appeal No.                                                          2008AP2823
STATE OF WISCONSIN                                                                                                     IN COURT OF APPEALS
DISTRICT IV
WISCONSIN POWER AND LIGHT COMPANY,
PETITIONER-APPELLANT,
V.
PUBLIC SERVICE COMMISSION OF WISCONSIN,
RESPONDENT-RESPONDENT,
CITY OF WISCONSIN DELLS AND
MUNICIPAL ELECTRIC UTILITIES OF WISCONSIN,
INTERVENORS-RESPONDENTS.
APPEAL from an order of the circuit court for Dane County:   JOHN
C. ALBERT, Judge.   Affirmed.
Before Dykman, P.J., Vergeront and Higginbotham, JJ.




No.   2008AP2823
¶1                                                                                        VERGERONT, J.    This appeal concerns the regulation of public
electric  utilities  under  WIS.  STAT.                                                   § 196.495                                                               (2007-08),1  called  the   “anti-
duplication statute.”   The Wisconsin Public Service Commission (PSC) issued a
decision  allowing  the  Wisconsin  Dells  Water  and  Light  Utility  (City electric
utility)  to  provide  electricity to  several  new  condominium developments  in  a
newly annexed area near the Chula Vista Resort.   The foundation for the PSC’s
decision was its construction and application of its regulation, WIS. ADMIN. CODE
§   PSC 112.08(1) (May 2008),2 and, specifically, its conclusion that the sewer lift
stations owned by the City were “customers” of the City electric utility within the
meaning of the regulation.   WP&L asserts that the sewer lift stations cannot be
“customers” of the City electric utility because they are municipal property.
¶2                                                                                        We  conclude  that  the  PSC’s  construction  of  its  regulation  to
encompass within the word “customer” a facility that is receiving and paying for
electrical service from a municipal electric utility, even if that facility is owned by
the municipality, is reasonable and is consistent with the language and purpose of
the regulation and the purpose of the anti-duplication statute.   We reach the same
conclusion with respect to the PSC’s application of this construction to the facts of
this case.   The PSC’s construction and application of its regulation is therefore
entitled to controlling weight.   Accordingly, we affirm the circuit court, which
affirmed the PSC.
1  All references to the Wisconsin Statutes are to the 2007-08 version unless otherwise
noted.
2 All references to the Wisconsin Administrative Code are to the May 2008 version
unless otherwise noted.
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No.   2008AP2823
BACKGROUND
I.                                                                                         Anti-Duplication Statute and Rule
¶3                                                                                         WISCONSIN  STAT.  § 196.495  regulates  the  service  territories  of
public electric utilities by setting forth the standards for determining which utility
has the right to serve a particular customer.   The statute prohibits electric utilities
from providing electric services to premises that are already receiving electric
services from another utility.   WIS. STAT. § 196.495(1m)(a).   The statute also sets
standards for determining which electric utility should be granted the sole right to
serve a new customer’s premises.   If two electric utilities are competing to serve a
new  customer  not  already  receiving  electricity  and  one  utility  can  reach  the
customer with an extension of less than 500 feet, while the extension for the other
utility would be 500 feet or more, the utility whose extension would be less than
500 feet has the exclusive right to provide service.   WIS. STAT. § 196.495(1m)(b).
Section 195.495(1m)(b) provides that no public utility may:
Make a primary voltage extension [a line 500 feet or more]
to serve the premises of any person not receiving electric
service and to which service is available from the facilities
of another public utility  … through a secondary voltage
extension… [a line less than 500 feet].
WIS. STAT. § 196.495(1m)(b).3   This is known as “the 500-foot rule.”   Where two
competing utilities are both within less than 500 feet or are both 500 feet or more
from the new customer, the customer may choose between them.   See Adams-
Marquete Electric Coop. v. PSC, 51 Wis. 2d 718, 731, 188 N.W.2d 515 (1971).
3  WISCONSIN STAT. § 196.495(1)(a) defines extensions less than 500 feet as “secondary
voltage extensions,” and extensions 500 feet or more as “primary voltage extensions.”
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No.   2008AP2823
¶4                                                                                       WISCONSIN STAT. § 196.495(1)(b) prescribes how an extension is to
be measured:
The length of an extension shall be measured as the air line
distance between an existing local service distribution line
that normally operates  at less than  35 kilovolts and the
nearest  point  on  the  principal  building  or  facility to  be
served  by  a  primary  voltage  extension  or  a  secondary
voltage extension.
¶5                                                                                       In  order  to  implement  WIS.  STAT.  § 196.495(1)(b),  the  PSC  has
promulgated this regulation:
[T]he   measurement   of   an   extension’s   length   under
s. 196.495(1)(b),  Stats.,  shall  be  from  an  existing  local
service distribution line that is, or has been, actually used in
rendering local service to a customer.    A street light or
security light is not a principal building or facility under
s. 196.495(1)(b), Stats.
WIS. ADMIN. CODE § PSC 112.08(1).
¶6                                                                                       With respect to a public utility’s own property and facilities, the
utility can extend electrical services regardless of where the property and facilities
are located and the 500-foot rule does not apply.   WIS. STAT. § 196.495(3).
¶7                                                                                       The  statute’s  purpose  of  avoiding  the  duplication  of  electrical
                                                                                         services is intended to benefit the consumer “through the resulting economies of
                                                                                         production.”   WP&L v. PSC, 45 Wis. 2d 253, 259, 172 N.W.2d 639 (1969).
II.                                                                                      Factual Background
¶8                                                                                       In 2005 the City of Wisconsin Dells agreed to annex two areas near
the  Chula  Vista  Resort,  which  was  about  to  undertake  a  major  expansion  to
include  three  new  condominium  complexes  and  other  facilities.    Chula  Vista
sought annexation because it needed access to the City’s sewer and water systems.
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No.   2008AP2823
At the time of annexation, WP&L was the only utility providing electric service to
the area.
¶9                                                                                                         In order to serve the new development, the City sewer utility and the
City water utility had three sewer lift stations4 and a new well built.   The sewer lift
stations and well needed electricity in order to operate.   The City electric utility
filed  an  application  with  the  PSC  seeking  permission  to  build  an  electric
distribution line through the Chula Vista annexation area that would connect to the
new sewer lift stations.5    WP&L objected because it already had lines in the
annexed areas and had been serving the original Chula Vista Resort for years.   In a
2005 decision, the PSC authorized the City electric utility to construct an electric
distribution line in order to provide electricity to the three sewer lift stations.6   The
PSC relied on the provision in WIS. STAT. § 196.495(3) that allows public utilities
to extend electric service to their own property or facilities.
¶10    The three new Chula Vista Resort condominium complexes were
each built within less than  500 feet of the City electric utility’s new sewer lift
station line.   After the completion of the complexes, the City electric utility began
4  A sewer lift station is a pumping station that moves wastewater to a sewage treatment
plant.
5  The City of Wisconsin Dells is itself a public utility under WIS. STAT. § 196.01, which
defines “public utility” to include cities and other municipalities (as well as private entities) that
“own, operate, manage or control any … plant or equipment … for the production, transmission,
delivery or furnishing of heat, light, water or power … to or for the public.”  However, we follow
the PCS’s decision in referring to the City electric utility, the City water utility, and the City
sewer utility as the entities that provide the respective services.   The precise relationship among
these three “utilities” is not clear from the record, nor is it clear how the “sewer utility” relates to
the definition of “public utility” in § 196.01.   However, it is not disputed that the City owns and
operates the facilities and property of the three “utilities.”
6  Application of the City of Wisconsin Dells, Certificate and Order, Docket No. 6610-
CE-101 (PSC, Nov. 22, 2005).
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No.   2008AP2823
providing electricity to them.   Two of the complexes—the Rio Condominiums and
the Fairway Villas Condominiums—were located in an area for which WP&L had
previously been the only provider of electricity.
¶11    The   third   condominium   complex—the   Cold   Water   Canyon
Condominiums—was  located  in  an  area  that  was  previously  vacant  land  and
lacked any electrical service at the time of annexation.   The City electric utility
built a distribution line from its sewer lift station line to provide electricity to this
complex.    Although  WP&L  had never  serviced this area,  its already existing
distribution line was located less than 500 feet from this complex.
¶12    WP&L filed a complaint and petition for declaratory ruling with the
PSC  alleging  that  the  City  electric  utility  had  improperly  begun  providing
electricity  to  the  three  condominium  complexes,  in  violation  of  WIS.  STAT.
§ 196.495.    WP&L sought a ruling that it had the exclusive right to provide
electric service in the annexed areas.
¶13    In  a  2007  decision,  the  PSC  ruled  that,  pursuant  to  WIS.  STAT.
§ 196.495(1m)(a), WP&L had the exclusive right to serve the Rio Condominiums
because this complex constituted premises already receiving electric service from
WP&L.   With respect to the two other complexes, the PSC ruled that, since both
WP&L and the City electric utility had existing lines less than 500 feet from these,
the  developer  had  the  right  to  choose  the  City  electric  utility  as  its  electric
provider.
¶14    In deciding that the City electric utility had an existing line less than
500 feet from these two condominium complexes, the PSC measured from the
sewer lift station line.    The PSC rejected WP&L’s argument that, because the
sewer lift stations were the City electric utility’s own property under WIS. STAT.
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No.   2008AP2823
§ 196.495(3), the sewer lift station distribution line was not providing electric
services to a “customer” under WIS. ADMIN. CODE  § PSC 112.08(1).   The PSC
concluded that  “a municipal electric utility is serving a  ‘customer’ under  [the
regulation] when it is serving municipal facilities.”7   The PSC found there was
insufficient evidence that the City electric utility installed the sewer lift station line
merely as a pretext so that it could locate facilities less than 500 feet from the
condominiums.
¶15    The PSC also rejected WP&L’s challenges to the size of the sewer
lift stations and to the City electric utility’s authority to build the sewer lift station
line so far into WP&L’s service territory, ruling that these issues had already been
decided by the PSC’s 2005 decision authorizing the construction of that line.   The
PSC stated that, if WP&L had wanted to challenge the 2005 decision, it should
have appealed within thirty days of that final order.
¶16    WP&L sought judicial review of the PSC’s decision pursuant to WIS.
STAT. § 227.52, and the circuit court affirmed.   The court concluded that the PSC’s
interpretation and application of its regulation, WIS. ADMIN. CODE § PSC 112.08(1),
was reasonable and consistent with the anti-duplication statute.
DISCUSSION
¶17    On appeal WP&L challenges the PSC’s construction and application
of WIS. ADMIN. CODE  § PSC 112.08(1), asserting that construing the sewer lift
stations to be the City electric utility’s “customers” is inconsistent with the holding
7  Wisconsin Power and Light Co. Compl. Against the City of Wisconsin Dells, Final
Decision, Docket No. 6680-DR-110 (PSC, June 6, 2007).
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No.   2008AP2823
in the  2005 PSC decision that considered the sewer lift stations to be the City
electric  utility’s                                                                        “own  property  or  facilities”  under  WIS.  STAT.  § 196.495(3).
WP&L urges us to adopt an interpretation of the PSC regulation based upon a
dictionary definition of “customer” as “a person who purchases goods or services
from  another.”  RANDOM  HOUSE  DICTIONARY  (2009),  http://www.dictionary.
reference.com (last visited Oct. 20, 2009) (emphasis added).   WP&L argues that,
because the sewer lift stations and the City electric utility are both owned by the
City, the sewer lift stations are not purchasing electricity from  “another,” and
therefore cannot be a “customer” of the City electric utility.   According to WP&L,
a definition of “customer” that excludes a facility owned by the electric service
provider is necessary in order to serve the purposes of the anti-duplication statute.
¶18    In  an  appeal  involving  an  administrative  agency’s  decision,  this
court reviews the decision of the administrative agency, not that of the circuit
court.   Wisconsin Dep’t of Revenue v. Menasha Corp, 2008 WI 88, ¶46, 311 Wis.
2d 579, 754 N.W. 2d 95.   The interpretation of an administrative regulation, like
the interpretation of a statute, is a question of law, which is generally subject to de
novo  review.    See  id.,  ¶44.    However,  an  agency’s  interpretation  of  its  own
regulation is controlling unless it is plainly erroneous or inconsistent with the
language  of  the  regulation.    Id.,                                                     ¶53.    In  applying  this  controlling  weight
deference,  we  ask                                                                        “whether  the  agency’s  interpretation  is  reasonable  and
consistent with the  meaning or purpose of the regulation.”    Id.,  ¶54  (citation
omitted).   If it is, we do not substitute our view of the law for that of the agency
and we uphold its interpretation of its regulation even if an alternative view is as
reasonable or more reasonable.  Id.
¶19    Although  WP&L’s  challenge  is  to  the  PSC’s  construction  and
application  of  its  regulation,  WP&L  argues  that  we  should  give  due  weight
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No.   2008AP2823
deference, relying on case law addressing review of an agency’s construction of a
statute.   Under that line of cases, courts apply one of three levels of deference to
an administrative agency’s interpretation of a statute:   great weight, due weight, or
no weight.    Id.,  ¶47.    The only issue of statutory interpretation identified by
WP&L is the PSC’s determination that the sewer lift stations are the City electric
utility’s own property under WIS. STAT. § 196.495(3), but that was a determination
made in the  2005 decision, which is not the subject of review in this action.8
Accordingly,  we  are  satisfied  that  the  controlling  weight  standard  applies  in
reviewing  WP&L’s  challenge  to  the  construction  and  application  of  the  PSC
regulation.
¶20    We begin our analysis by considering the meaning and purpose of
WIS. ADMIN. CODE § PSC 112.08(1).   The regulation plainly states that it is to be
applied when measuring an extension’s length under WIS. STAT. § 196.495(1)(b).
8  WP&L attempted to intervene in the 2005 PSC proceeding, but the PSC determined
that WP&L was not an interested party.   However, the PSC stated: “Should it come to pass in the
future that Wisconsin Dells would seek to extend or render service to a WP&L customer in
violation of WIS. STAT. § 196.495(1m), remedies are available at the Commission upon complaint
of WP&L….”   Application of the City of Wisconsin Dells, Certificate and Order, Docket No.
6610-CE-101 (PSC, Nov. 22, 2005).  WP&L did not appeal the PSC’s 2005 decision allowing the
City Electric Utility to serve the sewer lift stations.
In  its  appellate  briefs  WP&L  appeared  to  be  challenging  the                                    2005  PSC  decision.
However, at oral argument WP&L’s counsel stated, as we understand, that WP&L was not
asserting that it could now appeal the 2005 decision.  In the event we are mistaken about WP&L’s
current position on this point, we state our agreement with the circuit court that the correctness of
the  2005 decision is not before us.   Even though WP&L’s intervention motion was denied,
WP&L had the right to petition for judicial review if it was “aggrieved” by the PSC’s decision,
WIS. STAT. § 227.53(1), and the definition of “person aggrieved” does not require that the person
have been a party before the administrative agency.   See § 227.01(9) (“’Person aggrieved’ means
a person or agency whose substantial interests are adversely affected by a determination of an
agency.”).   Because WP&L did not appeal the 2005 decision within the time limits specified in
§ 227.53, neither the circuit court nor this court may now consider a challenge to that decision.
See Gimenez v. State Medical Examining Bd., 229 Wis. 2d 312, 321, 600 N.W.2d 28 (Ct. App.
1999).
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No.   2008AP2823
As already noted, the length of the extension—in particular, whether it is less than
500 feet—is critical to determining the rights of competing electric utilities to
serve  a  new  customer  under  § 196.495(1m)(b).    The  regulation  adds  further
definition  to  the  beginning  point  and  ending  point  of  an  extension.    Section
196.495(1)                                                                                 (b)  describes  the  beginning  point  as                                           “an  existing  local  service
distribution  line  that  normally  operates  at  less  than                               35  kilovolts,”  and  the
regulation further defines an “existing local service distribution line” to be one
“that is, or has been, actually used in rendering local service to a customer.”   WIS.
ADMIN. CODE  § PSC  112.08(1).    With respect to the ending point, the statute
provides that it is  “the nearest point on the principal building or facility to be
served by a primary voltage extension [500 feet or more] or a secondary voltage
extension  [less than  500  feet].”    WIS.  STAT.  § 196.495(1)(b).    The  regulation
further defines the  “principal building or facility” to exclude a  “street light or
security light.”   WIS. ADMIN. CODE § PSC 112.08(1).
¶21    The regulation’s evident purpose in further defining the beginning
and ending points of the extension is to prevent certain methods of undermining
the                                                                                        500-foot  rule.    WP&L  does  not  dispute  that  this  is  the  purpose.    The
requirement that the line measured from must be, or have been, “actually used to
serve a customer” prevents a utility from benefiting by building a line solely for
the purpose of establishing a closer beginning point from which to measure an
extension.   The exclusion of streetlights and security lights as the ending point for
an extension prevents a utility from placing these easily installed and relatively
minor  consumers  of  energy so  as to  be  less than  500 feet from the  existing
distribution line when the buildings or facilities of the hoped-for new customer are
a greater distance from the existing line.    See Compl. of Polk-Burnett Coop.,
Order, Docket No. 4220-DR-106 (PSC, June 30, 1995) (explaining that allowing
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No.   2008AP2823
streetlights and security lights to be considered “the primary building or facility to
be  served”  would  encourage  utilities  “to  install  lights  wherever  necessary  to
circumvent the 500-foot rule.”)
¶22    We next turn to the facts in this case.   The PSC held an evidentiary
hearing on the questions of whether and how the City electric utility was billing
the City sewer utility and the City water utility for the electrical services it was
providing through the sewer lift station line.   The PSC found that the City electric
utility had properly billed the City sewer utility and the City water utility for those
services and they had properly paid the bills.   The PSC found that the City electric
utility “treated its sister municipal utilities the same as private customers, offering
them no preferential service.”9   The PSC also found that the sewer lift station line
“is used and useful” and was not built as a pretext to circumvent the 500-foot rule.
WP&L does not challenge these factual findings.
9  In its decision the PSC agreed with the City electric utility that it was obligated by the
“anti-discrimination” statutes, WIS. STAT. §§ 196.22, 196.37 and 196.60, to treat the City water
and sewer utilities as it does all other non-municipal customers and thus they are customers under
those statutes.    These statutes, generally, require public utilities to charge and receive the
scheduled rates for any service they perform, § 196.22, and impose penalties for charging or
receiving “from any person” more or less than the scheduled rates or the amount it charges or
receives from “any other person for a like contemporaneous service.”   WIS. STAT.  § 196.60.
WP&L questions whether these statutes apply to the facts in this case, but it does not develop an
argument to show that they do not.   Accordingly, we accept the PSC’s conclusion of law on the
requirements of the anti-discrimination statutes.
WP&L  also  challenges  the  relevance  of  the  anti-discrimination  statutes  to  an
interpretation of “customer” in WIS. ADMIN. CODE § PSC 112.08(1), because, WP&L asserts, the
anti-discrimination statutes and the anti-duplication statutes have different purposes.   While that
is undoubtedly true, it does not follow that the fact that the City electric utility treats the other two
City utilities as it treats other customers in charging and collecting for services is irrelevant to the
PSC’s  determination  of whether  those  utilities  are                                                     “customers”  within  the  meaning  of  the
regulation.   At bottom WP&L’s objection to consideration of the anti-discrimination statutes is
that, whatever the actual transaction is between the City electric utility and the other two City
utilities, the latter two are not “customers” under the regulation because they are all owned and
operated by the City.  We address this argument in the body of the opinion.
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No.   2008AP2823
¶23    Given the facts found by the PSC, its conclusion that the City water
and sewer utilities were  “customers” within the meaning of the regulation is a
reasonable  construction  and  application of  the  regulation.    This  conclusion  is
consistent with the language and purpose of the regulation because it ensures that
the measurement for purposes of the 500-foot rule will begin with a line that is
actually providing electrical services for a non-pretextual purpose rather than a
line that was built in order to circumvent that rule.
¶24    We disagree with WP&L that this construction and application of
the  regulation  gives  an  unreasonable  meaning to  “customer.”    The  dictionary
definition on which WP&L relies—“a person who purchases goods or services
from  another”  (emphasis  added)—does  not  purport  to  define  what  “another”
means.   This definition simply raises a new set of questions on what “another”
means in the context of municipal electric utilities providing services to municipal
facilities.   We also observe that other dictionary definitions do not contain the
qualifier of  “from another.”   See, e.g.,  “One that buys goods or services,” THE
AMERICAN  HERITAGE  COLLEGE  DICTIONARY  341  (3rd  ed.  1993);                             “one  that
purchases some commodity or service  … one that purchases systematically or
frequently.…”   WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 559 (1993).
Most importantly, the PSC is not obligated to consult a dictionary to interpret a
term that it uses in its own regulation in a technical context.   Instead, it may use its
expertise and experience to give the term a meaning, as long as it is a reasonable
one.   It is reasonable to decide that a facility that receives electric service from a
municipal electric utility and is billed for that service and pays for it on the same
terms as all other persons or entities that receive service from the utility is a
“customer” of that utility, even if the facility is owned by the same municipality.
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No.   2008AP2823
¶25    WP&L  also  argues  that  its  proposed  definition  of                                “customer”
furthers the purpose of the anti-duplication statute, whereas the PSC’s construction
does not.   Again we disagree.   According to WP&L, the PSC’s interpretation of
“customer” encourages utilities to make “unilateral and self-interested decisions”
about  where  to  place  their  own  facilities  in  order  to  use  those  lines  as  the
beginning point for extensions to new areas.   This argument ignores the fact that
the PSC has found that the sewer lift station line is not a pretext, is “used and
useful,” and that the sewer lift stations were placed where they are because of
gravity concerns.   The PSC can make a similar inquiry in any case where the
contention is made that the placement of a utility’s facility is a pretext in order to
circumvent the 500-foot rule.
¶26    As  the  PSC’s  counsel  explained  at  oral  argument,  WP&L’s
interpretation of “customer” to exclude in all cases a facility owned by a utility is
inconsistent with the purpose of the anti-duplication statute.   A distribution line
that serves a facility of a utility, such as a lift station or the utility’s administrative
office building,   could then not branch off to serve another’s property that needs
service even if it were less than 500 feet away; a longer extension would need to
be built to reach the new property.   This is contrary to the purpose of the anti-
duplication law, which is to benefit the consumer by avoiding unnecessary costs of
providing services.   See WP&L, 45 Wis. 2d at 259.
CONCLUSION
¶27    We conclude that the PSC’s interpretation of  “customer” in WIS.
ADMIN.  CODE  § PSC  112.08(1)  to  encompass  a  facility that  is  receiving  and
paying for electrical service from a municipal electric utility, even if that facility is
owned by the municipality, is reasonable and is consistent with the language and
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No.   2008AP2823
purpose of the regulation and the purpose of the anti-duplication statute.   We reach
the same conclusion with respect to the PSC’s application of the regulation to the
facts of  this case.    We therefore give the  PSC’s construction and application
controlling weight, and we affirm the circuit court.
By the Court.—Order affirmed.
Recommended for publication in the official reports.
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