Eric Dunst v. Public Service Commission of Wisconsin

COURT OF APPEALS
DECISION NOTICE
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.
January 28, 2026
A party may file with the Supreme Court a
Samuel A. Christensen 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.

Appeal No. 2024AP2566 Cir. Ct. No. 2024CV1085

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT II

ERIC DUNST,

PETITIONER-APPELLANT,

V.

PUBLIC SERVICE COMMISSION OF WISCONSIN,

RESPONDENT-RESPONDENT,

CITY OF WAUKESHA WATER UTILITY,

INTERESTED PERSON.

APPEAL from an order of the circuit court for Waukesha County:
BRAD SCHIMEL, Judge. Affirmed.

Before Neubauer, P.J., Gundrum, and Lazar, JJ.
No. 2024AP2566

Per curiam opinions may not be cited in any court of this state as precedent

or authority, except for the limited purposes specified in WIS. STAT. RULE 809.23(3).

¶1 PER CURIAM. Eric Dunst appeals a circuit court order affirming
the Public Service Commission of Wisconsin’s (“Commission”) denial of Dunst’s
request for a formal review of his customer complaint against Waukesha Water
Utility (“WWU”). On appeal, Dunst argues the Commission’s denial of his
request for formal review was arbitrary and capricious. We affirm.

¶2 We begin with necessary procedural context. WWU is a public
utility that is supervised and regulated by the Commission. See WIS. STAT.
§ 196.02(1) (2023-24).1 As a public utility, WWU is required to file a schedule of
its rates with the Commission. See WIS. STAT. § 196.19(1). The rates must be
“reasonable and just.” WIS. STAT. § 196.03(1). Once a schedule is approved by
the Commission, a public utility must charge according to its schedule, WIS. STAT.
§ 196.22, and it must obtain the Commission’s approval for any change in its
schedule, WIS. STAT. § 196.20(1).

¶3 As a water utility, WWU is also required to provide water for public
fire protection. There are costs associated with the “production, storage,
transmission, sale and delivery or furnishing of water for public fire protection
purposes.” WIS. STAT. § 196.03(3)(b). A municipality may agree to directly pay
the water utility for the costs associated with public fire protection. Id. If,
however, the municipality does not agree to pay the costs, § 196.03(3)(b)1.-2.a.-b.
provides, in part:

1
All references to the Wisconsin Statutes are to the 2023-24 version.

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No. 2024AP2566

1. A public utility shall include the charges in the water
utility bill of each customer of the public utility in the city,
village or town.

2. A municipal utility may, in addition to including the
charges in water utility bills under subd. 1., bill the charges
to any person who meets all of the following conditions:

a. The person is not a customer of the municipal utility.

b. The person owns land that is located in the city,
village or town and in an area in which the municipal utility
has an obligation to provide water for public fire protection.
If the person owns 2 or more parcels that are adjacent to
each other or divided only by a roadway or brook, creek,
river, or stream, the municipality may bill the person for
only one parcel.

Id.

¶4 In this case, WWU filed a schedule with the Commission that
outlined WWU’s rates for public fire protection services. See WIS. STAT.
§ 196.19(1). WWU advised the Commission that the City of Waukesha “has
chosen to have the utility bill the retail general service customers for fire
protection service.” WWU stated that “[c]ustomers who are provided [water]
service … shall also be subject to the charges in this schedule according to the size
of their primary meter.” WWU included a rate schedule that outlined the monthly
public fire protection service fee for twelve different primary meter sizes. WWU
also advised the Commission:

Under WIS. STAT. § 196.03(3)(b), the City of Waukesha
has elected to make the charges in this schedule applicable
to non-general service customers who own property that is
located both within the municipal limits and in an area
where the utility has an obligation to provide water for
public fire protection. Each parcel shall be billed at the
5/8-inch meter rate under this schedule.

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No. 2024AP2566

¶5 The schedule, also known as WWU’s water tariff, became effective
on October 1, 2023.

¶6 With that background, we turn to the underlying dispute. Dunst
owns three parcels in the City of Waukesha. One parcel is developed with a
primary meter, and the other two parcels are vacant. WWU charged Dunst a
public fire protection service fee on each of the parcels according to its tariff.
Dunst objected to the fee charged on his two vacant parcels, and filed an informal
complaint with the Commission. Dunst argued that pursuant to WIS. STAT.
§ 196.03(3)(b), only non-customers could be charged a public fire protection
service fee for vacant parcels, and he reasoned that because he was a customer of
WWU by virtue of his third, developed parcel, he could not be charged a public
fire protection service fee for the two vacant parcels.

¶7 Commission staff investigated Dunst’s complaint and issued an
informal decision that advised Dunst he had been appropriately charged a public
fire protection service fee on each of his three parcels in accordance with WWU’s
water tariff. Dunst then filed a request for formal review, pursuant to WIS.
ADMIN. CODE § PSC 185.39(3)(a) (Nov. 2024).2

¶8 In accordance with the Commission’s procedure regarding requests
for formal review, Commission staff filed “a memorandum based on the
information it has received from the utility and the customer.” WIS. ADMIN. CODE
§ PSC 185.39(3)(b). The memorandum stated in relevant part:

Under WIS. STAT. § 196.03(3)(b)1., “a public utility
shall include the charges in the water utility bill of each

2
All references to the Administrative Code are to the November 2024 Register.

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No. 2024AP2566

customer of the public utility in the city, village or town.”
Mr. Dunst is a customer of Waukesha receiving service at
[his developed parcel]. Commission staff have historically
determined parcels that receive water service to be general
service customers billed the public fire protection charge
based on the size of the customer’s primary meter and that
parcels without a primary water meter are non-general
service customers that are billed at the rate set for a
5/8-inch meter. Mr. Dunst would be considered a
non-general service customer of Waukesha at [his vacant
parcels], and both parcels are within an area in which
Waukesha is required to provide fire protection. Therefore,
Commission staff’s conclusion was that the criteria in the
tariff are met and each vacant parcel is subject to the public
fire protection charge.

¶9 WWU and Dunst both filed responses to the memorandum. See
WIS. ADMIN. CODE § PSC 185.39(3)(b). WWU argued it appropriately billed
Dunst in accordance with the terms of its water tariff that was on file with the
Commission. Dunst asserted:

[B]ecause all three parcels are owned by the same person
and that person is already a customer of the municipal
utility. [WISCONSIN STAT. §] 196.03(3)(b)(2) clearly states
that a person may not be charged under this subsection if
that person is already a customer of the municipal utility.

¶10 On May 9, 2024, at its open meeting, the Commission reviewed
Dunst’s request for a formal review of his complaint against WWU, and it
ultimately denied Dunst’s request. In a written decision, the Commission rejected
Dunst’s assertion that he should be subject to only one public fire protection
service fee based on WIS. STAT. § 196.03(3)(b). The Commission explained:

Under WIS. STAT. § 196.03(3)(b)1., “a public utility
shall include the charges in the water utility bill of each
customer of the public utility in the city, village or town.”
Mr. Dunst is a water utility customer because he receives
water service at [his developed parcel]. His [vacant]
parcels … do not receive water service. Parcels that
receive water service are identified as general service
customers and are billed the [public fire protection] charge
based on the size of the customer’s primary meter.

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No. 2024AP2566

Waukesha’s tariff, Schedule F-1, establishes that parcels
without a primary water meter or non-general service
customers should be billed at the rate set for a 5/8-inch
meter. Mr. Dunst’s parcels that do not receive water
service are billed at the 5/8-inch meter [public fire
protection] rate.

When a utility has indicated that it wishes to elect to bill
parcels which do not receive service from the municipal
utility under WIS. STAT. § 196.03(3)(b)2.a., and selects the
standard non-general service language option for its tariff,
as Waukesha has done, the [public fire protection] rates are
established by dividing the cost of service among the total
number of parcels to which the utility is required to provide
fire protection service. There is no consideration given to
whether or not the owner of each parcel receives water
service on that parcel or on another parcel within the
utility’s service territory.

¶11 The Commission further stated that WWU was statutorily prohibited
from waiving the public fire protection service fees on the two vacant parcels. It
explained:

the language of Waukesha’s [public fire protection] tariff
states that it must bill a [public fire protection] charge to
every parcel that does not receive utility service but is
located within the area in which the utility is required to
provide fire protection. The charge assessed against
Mr. Dunst’s parcels is not only in compliance with that
language, but it is required to be billed under Wisconsin
law.

¶12 The Commission determined WWU “has billed Mr. Dunst properly
in accordance with its approved tariff[.]”

¶13 Dunst petitioned for judicial review. Following a hearing, the circuit
court denied his petition. Dunst appeals.

¶14 On appeal, we review the Commission’s decision, not the decision
of the circuit court. Lamar Cent. Outdoor, LLC v. Division of Hearings &
Appeals, 2019 WI 109, ¶9, 389 Wis. 2d 486, 936 N.W.2d 573. A Commission’s

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No. 2024AP2566

determination on whether to grant a request for formal review and formally
investigate an individual’s complaint is discretionary. WIS. STAT. § 196.02(7).
We review an agency’s discretionary decision under WIS. STAT. § 227.57(8). We
may not substitute our judgment for that of the Commission on an issue of
discretion, id.; rather, we review the Commission’s decision to determine whether
it is arbitrary or capricious, Wisconsin Prof. Police Ass’n v. Pub. Serv. Comm’n
of Wis., 205 Wis. 2d 60, 74, 555 N.W.2d 179 (Ct. App 1996). “Arbitrary or
capricious conduct lacks a rational basis and is the result of an unconsidered,
willful or irrational choice rather than a ‘sifting or winnowing’ process.” Id.
(citation omitted).

¶15 Here, the Commission’s final decision demonstrates its
determination to deny Dunst’s request for formal review was not arbitrary and
capricious. See id. WWU’s water tariff provides that it will charge a public fire
protection service fee on a per parcel basis. The Record reflects that Dunst was
charged the public fire protection service fees on a per parcel basis in accordance
with WWU’s adopted tariff. We disagree with Dunst’s assertion that WIS. STAT.
§ 196.03(3)(b) prohibits WWU from charging public fire protection service fees
on Dunst’s vacant parcels because he is a customer of WWU in regard to his third,
developed parcel. As explained by the Commission, § 196.03(3)(b)1. allowed
WWU to include in its tariff a public fire protection service fee for parcels with a
primary water meter, and § 196.03(3)(b)2. allowed WWU to include in its tariff a
public fire protection service fee for parcels without a primary water meter but
were located in WWU’s service area. After the tariff was adopted by the
Commission, WWU was statutorily required to bill at the rates depicted in the
tariff. All of the charges were included on a water utility bill that was sent to
Dunst. We conclude the Commission’s decision was not in violation of any

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No. 2024AP2566

constitutional or statutory provision, had a rational basis, and was not arbitrary or
capricious. See WIS. STAT. § 227.57(8).

By the Court.—Order affirmed.

This opinion will not be published. See WIS. STAT.
RULE 809.23(1)(b)5.

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