The Public Service Commission (PSC) has given verbal approval to Northeastern Wisconsin Utility’s request to raise fixed charges on customer electricity bills, and is also considering 2 other similar proposals across the state including We Energies in southeastern Wisconsin and Madison Gas & Electric Company in south central Wisconsin.
Customers of a northeastern Wisconsin utility will pay more for electricity beginning in January, after the state’s Public Service Commission voted to allow Wisconsin Public Service Corp. to hike its fixed charge.
The PSC has given verbal approval to WPS to increase the fixed electricity charge by about $9 a month, after it voted 2 to 1 in favor of the increase on Thursday.
Critics of the move, like the nonprofit group Citizens’ Utility Board, say higher fixed costs mean that someone who lives in a small apartment will pay the same monthly fee as someone who lives in a mansion.
Kira Loehr, CUB’s director and general counsel, said that in WPS’s case, the PSC also mandated that the per-kilowatt fee will go down by about $.02 per hour. Loehr believes the decision gives people no reason to cut back on useage.
“And that’s what actually incents more energy use, because as the fixed portion that you can’t do anything about increases, the variable portion does decrease a little bit, sending less of a signal to customers that the less they use the more they can save.”
WPS said the structure change was needed because of increased costs for coal, natural gas and transportation.
“I won’t say there’s no incentive to conserve energy,” said David Kyto, the company’s director of rate case process. “The fixed charge is going up and the per-kilowatt hour will go down. So there will be less of an incentive. But I still think there’ll be incentive for customers to pursue energy efficiency and conservation.”
Madison Gas and Electric, along with Milwaukee-based We Energies, are also asking the PSC for similar fixed rate hikes.
MGE is looking to raise the fixed charges on customer bills and reduce charges for the amount of electricity used — a move critics say will discourage energy conservation while hitting low-income and elderly residents the hardest.
For the typical residential customer, the fixed charge would increase from the current $10.50 to $19 if the plan is approved by the state Public Service Commission. Future increases could take the fixed charge higher, although MGE has backed off from an earlier plan to charge $69 per customer by 2017.
MGE and electric utilities nationwide are feeling cost pressures with the growth of renewable energy coupled with increased efficiencies. At the same time, MGE says it must maintain the electric system and is looking for a way to fairly spread those costs among all customers — not just those who use large amounts of power.
A variety of groups have already filed comments on the case, including the city of Madison which has hired an outside expert to argue against the MGE rate changes.
“This MGE proposal will move the city of Madison in exactly the opposite direction that the city wishes to go,” writes city consultant William Marcus, an economist for JBS Energy of West Sacramento, Calif.
Renewable energy groups have also gotten into the fray, arguing that MGE’s rate plan will stifle investment in clean energy and leave Wisconsin farther behind in that key economic sector.
“MGE’s proposed approach would push the market down a path that discourages innovation and competition at a time when other states are encouraging this type of development,” says Susan Crawford, an attorney for Wind on the Wires.
Rally organizer Don Ferber of RePower Madison says 88 percent of MGE’s electricity supply is generated by fossil fuel burning — either coal or natural gas.
“We want the company to be forward looking but they have no plans for the future and that is not a good place to be,” he said, noting rising fuel costs and potential carbon emission charges going forward.
MGE’s Kraus counters that the company is committed to its customers and plans to unveil a series of community meetings next year to focus on the key issues that have come out of the rate case.
“It will be modeled after the Community Energy Conversations we did across Dane County in the early 2000’s,” he says. [Which I personally attended and recommended my “Concern, NOW! plan but nothing became of it.]
On Thursday, October 8, 2014 the PSC had a hearing on the MGE proposal. Upward of 200 people protested the proposal and gave public testimony, the vast majority demanding the PSC reject MGE’s proposed rate restructure. [Including me.] A decision by PSC is expected before the end of the year.