Also in this issue: Municipal Interventions in PSCW CPCN Proceedings for Utility Infrastructure | Update on the Scope of Arrest Record Protections | One-Time Beer Sale Didn’t Preserve Bar and Restaurant’s Nonconforming Use Status
PSC Investigating Construction Cost Overruns on Electric, Gas, and Water Projects
Lawrie J. Kobza | 10.15.25
The Public Service Commission of Wisconsin (Commission) has opened a docket (PSC Docket 5‑UI-124) to investigate the issue of construction cost overruns for electric, gas and water projects. The docket seeks to gather information with the goal of developing a framework and methodology to consider construction cost overruns. According to the Commission, “[a] more cohesive and consistent approach across our regulated entities will have wide-ranging benefits.” The docket does not distinguish between municipal and investor-owned utilities, nor electric and water utilities.
This docket is the result of the Commission’s direction to staff in PSC Docket 6630-CE-3170 to open a generic investigation to examine and develop a consistent approach to analyzing construction cost overruns. That prior docket involved WEPCO’s application to construct a $1.2 billion natural gas facility to help power Microsoft’s new data center in southeast Wisconsin. Intervenors opposed to the project raised issues about cost overruns and who should bear the risk of cost overruns (customers or shareholders).
In its notice opening Docket 5‑UI-124 (Notice), the Commission states that:
The frequency and magnitude of cost overruns in energy (electric and natural gas) and water infrastructure construction projects before the Commission has increased in recent years. Due to the ongoing energy transition, projected additions of large load customers, increased electrification, economic uncertainty, and an increase in Commission-regulated infrastructure construction projects statewide, the Commission anticipates cost overruns will continue to occur and be a critical issue in future proceedings.
While the Commission has a long history of analyzing evidence and issuing decisions on a case-by-case basis, that narrow, piecemeal approach does not facilitate the comprehensive, creative, and collaborative approach necessary to sufficiently and consistently address cost overruns. As such, the Commission agreed that greater study and analysis of the cost overruns issue is needed.
Therefore, this investigation will facilitate a deliberative and comprehensive analysis of cost overruns, with the goal of developing a viable framework for utilities, merchant developers, parties, and Commission staff to employ when cost overruns occur.
Comments on the docket must be submitted to the Commission by 1:30 p.m. on Monday, October 27, 2025. The Notice opening the docket describes the methods by which comments may be filed with the Commission. All Wisconsin electric, gas, steam, and water public utilities are parties to this docket and are encouraged to file comments.
The Notice includes numerous questions the Commission would like comments on. Topics include the development of cost estimates and project budgets, the use of change orders, force majeure clauses, and reasons for cost overruns. Communities should consider submitting comments on the many ways municipal utilities differ from investor-owned utilities and how the public bidding process applies to municipal projects.
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