ROFR is an acronym for the Right Of First Refusal legislation that is being considered by the Wisconsin Legislature. The proposed law would require that companies with a demonstrated track record of success in building, operating, and maintaining Wisconsin’s transmission grid be given the first opportunity to build new lines and manage future system upgrades.
Without adoption of a ROFR law, Wisconsin ratepayers are at risk of giving a $1 billion free ride to the rest of the electricity users in other states around our multi-state region. That’s because opportunistic developers and hedge fund operatives are waiting in the wings to grab these new projects, even though they have no deep connections to the communities they would serve nor the best interests of Wisconsin ratepayers in mind.
Under the proposed law, the decision about who builds Wisconsin’s power grid stays in Wisconsin. The new law ensures that Wisconsin based utilities are given the first opportunity to build, operate, and maintain the grid. The new law also maintains local and state control and helps keep costs down for Wisconsin energy consumers.
Without this new law, Wisconsin consumers will pay more to maintain the power grid and successfully complete new projects. It is more than likely that hedge fund operators and opportunistic developers will be the ones trying to get control of the Wisconsin power grid. Without the protections of this proposed law, upgrades will take longer, and decisions about operations will be made by people with no accountability to the local citizens. That could expose Wisconsin to more reliability and safety risks as well as increased costs and longer delays in completing projects. However, if ROFR is adopted, Wisconsin will have a much stronger hand.
At the end of 2024 eight other states in the regional operating system have enacted ROFR legislation, including our neighbors in Iowa, Michigan, Minnesota, and Indiana. Many of these states are competitors to Wisconsin for economic development and job growth, and having a ROFR law in place improves the reliability of our transmission grid and strengthens Wisconsin’s position as an attractive place to live and do business.
Besides protecting the existing investment, grid upgrades, and needed repairs that have already been made, a ROFR law will help ensure that ratepayers in Wisconsin continue to be served by a modern and reliable power grid that can be built quickly and cost-effectively. Without ROFR, the hedge funds and developers offer a dubious plan to take over transmission projects in Wisconsin.
For large users of electricity, this is an especially important issue because without ROFR, large users face projected delays and forfeit the economic benefits from the earlier investments they have made in our transmission grid and infrastructure. Large power users and others gain protections from a ROFR law because the added costs that come when others take on these projects won’t happen. In many cases, the hedge fund operators and opportunistic developers take on these projects and usually experience delays and additional, “unforeseen” costs. That means it will take Wisconsin businesses longer to gain access to additional solar and renewable energy supplies and have fewer opportunities to tap into available cheaper power.
Wisconsin ratepayers could be on the hook to the rest of the multi-state region for a $1 billion gift. The rules of the regional system operations agency allow fixed costs for new projects to be spread across the region because costs are benefiting the entire area. However, a non-incumbent developer cannot do this, and that means Wisconsin ratepayers get stuck paying more than their fair share for costs that benefit the region. The amount of fixed costs that can be shifted outside the state is a net benefit to Wisconsin customers. Right now, other states are currently shifting their allowable cost to Wisconsin ratepayers, and without a ROFR law, Wisconsin will continue to be penalized.
WI4ROFR is a coalition of people from throughout Wisconsin -- rural and urban areas; suburban, urban, and country areas; and everyone from farmers and factory workers to businesses, office workers, and ratepayers from every corner of the state. They have joined together in a bipartisan spirit of cooperation to encourage and promote swift legislative approval and enactment of a ROFR law. Because Wisconsin is “behind the eight ball” on this policy, it’s important that the Legislature move forward in a deliberate and determined pace. Other states continue to shift costs to Wisconsin. New projects are being scheduled and planned. If Wisconsin doesn’t act, ratepayers are at the risk of paying hundreds of millions of dollars in unnecessary costs while other states shift their cost to Wisconsin. WI4ROFR is working to support enactment of this proposed law, and the coalition welcomes new members. More information can be found at WI4ROFR.org.
WI4ROFR is working to protect the Wisconsin grid and all ratepayers.
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