Wisconsin Statutes & Annotations
Chapter 196 - Regulation of public utilities.
196.37 - Lawful rates; reasonable service.

196.37 Lawful rates; reasonable service.
(1) If, after an investigation under this chapter or ch. 197, the commission finds rates, tolls, charges, schedules or joint rates to be unjust, unreasonable, insufficient or unjustly discriminatory or preferential or otherwise unreasonable or unlawful, the commission shall determine and order reasonable rates, tolls, charges, schedules or joint rates to be imposed, observed and followed in the future.
(2) If the commission finds that any measurement, regulation, practice, act or service is unjust, unreasonable, insufficient, preferential, unjustly discriminatory or otherwise unreasonable or unlawful, or that any service is inadequate, or that any service which reasonably can be demanded cannot be obtained, the commission shall determine and make any just and reasonable order relating to a measurement, regulation, practice, act or service to be furnished, imposed, observed and followed in the future.
(3) Any public utility to which an order under this section applies shall make such changes in schedules on file under s. 196.19 to make the schedules conform to the order. The public utility may not make any subsequent change in rates, tolls or charges without the approval of the commission.
(4) This section does not apply to rates, tolls or charges of a telecommunications cooperative, an unincorporated telecommunications cooperative association, or a small telecommunications utility except as provided in s. 196.205.
(5) It is not unreasonable or unjustly discriminatory for a municipal public utility to adopt application, deposit, disconnection, or collection rules and practices that distinguish between customers based upon whether the customer owns or leases the property that is receiving utility service where the possibility exists for any unpaid bills of a tenant to become a lien on the property that is receiving utility service.
(6) A water public utility may fund all or a portion of the cost of providing financial assistance under s. 196.372 using revenue collected from charges applied to retail customers receiving service from the water public utility in the same city, village, or town in which the property for which the financial assistance is provided is located.
History: 1981 c. 390; 1983 a. 53 ss. 47, 50; 1989 a. 344; 1993 a. 496; 1995 a. 409; 2005 a. 441; 2011 a. 22; 2013 a. 274; 2017 a. 137.
In the absence of statutory authority, the PSC may not fix rates to be applied retroactively. Algoma, Eagle River, New Holstein, Stratford, Sturgeon Bay & Two Rivers v. PSC, 91 Wis. 2d 252, 283 N.W.2d 261 (Ct. App. 1978).
Allowing a utility to charge present ratepayers for a storm damage casualty loss that occurred in a prior year did not constitute retroactive rate making. Wisconsin Environmental Decade, Inc. v. PSC, 98 Wis. 2d 682, 298 N.W.2d 205 (Ct. App. 1980).
The PSC has authority to shift the cost of excess generating capacity to shareholders if the excess capacity was imprudently acquired or is not useful in serving the public, but there must be a reasoned determination that ratepayers should not bear the cost. Madison Gas & Electric Co. v. PSC, 109 Wis. 2d 127, 325 N.W.2d 339 (1982).
A utility's failure to pay taxes under protest may constitute “imprudence" and may reasonably affect a rate-setting decision. Wisconsin Public Service Corporation v. PSC, 156 Wis. 2d 611, 457 N.W.2d 502 (Ct. App. 1990).
The PSC has authority to order a utility to refund compensation collected in violation of filed tariffs. GTE North Inc. v. PSC, 176 Wis. 2d 559, 500 N.W.2d 284 (1993).
The PSC's imposition of a penalty for imprudent administration of a coal acquisition contract was impermissible retroactive rate-making. Wisconsin Power & Light v. PSC, 181 Wis. 2d 385, 511 N.W.2d 291 (1994).
Sub. (1) is not implicated when a refund is ordered for reasons other than the PSC's determination that rates for services already provided were not reasonable. Sub. (2) authorizes the PSC to order a refund of a rate that the utility believed was included in a tariff, but the PSC concluded was not, and of a rate that the utility believed was properly filed with the PSC but the PSC concluded was not. CenturyTel of the Midwest-Kendall, Inc. v. PSC, 2002 WI App 236, 257 Wis. 2d 837, 653 N.W.2d 130, 02-0053.
Once a rate or practice is determined to be unlawful, or once a charge is determined to be a practice that is unlawful, it is subject to the remedial authority of sub. (2). Under CenturyTel, sub. (2) provides the PSC authority to order a refund. Wisconsin Bell, Inc. v. Public Service Commission, 2004 WI App 8, 269 Wis. 2d 409, 675 N.W.2d 242, 02-3163.

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