from the
Budget Briefs
Wisconsin Legislative Reference Bureau
Budget Brief 99–1
November 1999
ELECTRIC RELIABILITY 2000
The biennial state budget act (1999 Wisconsin Act 9), passed by the legislature and signed
by Governor Tommy Thompson on October 27, 1999, creates the Reliability 2000 Initiative
(R2K), designed to increase the reliability of the state’s electricity supply and foster continued
economic growth. The chief feature of the initiative is creation of a nonprofit corporation to
control the high-voltage transmission lines that move bulk electricity across the state. R2K,
enacted in Chapter 196, Wisconsin Statutes, also includes a commitment to the use of renew-
able energy resources, encouragement of conservation efforts, and financial assistance for
low-income energy customers.
The R2K initiative results from a compromise among the major players in the energy mar-
ketplace: utility companies and cooperatives, government officials and regulators, businesses,
and consumer advocacy groups, and is an extension of utility deregulation that began with
1997 Wisconsin Act 204, the “Electric Reliability Act” (see LRB Legislative Brief 98-7). Act 204
required that investor-owned electrical utilities and cooperatives transfer control of their
transmission facilities to an independent entity. Reliability 2000 sets the deadlines for the
transfer and represents a major structural shift for existing electric utilities. The 1997 act also
streamlined the approval process for construction of new electrical generating plants and
required the Public Service Commission (PSC) to study existing transmission line capacity
and order additional construction, if necessary.
BACKGROUND
In 1907, Wisconsin was the first state to regulate all public utility service. For almost a cen-
tury, Wisconsin’s electric utilities have provided power to exclusive service areas through ver-
tical integration of the three main supply functions: 1) generation of bulk electricity; 2) trans-
mission over the main grid sys