For Immediate Release: January 11, 2007

PSC Correctly Rejects Special Rates for ERCO

MADISON – The Citizens Utility Board applauds the decision made today by the Public Service Commission of Wisconsin (PSC) to reject the requests by ERCO Worldwide and Wisconsin Power & Light Co. (WPL) to provide ERCO with special deals for lower electricity rates.

The decision came as part the PSC’s proceeding to determine the electricity rates that WPL can charge customers in 2007.

ERCO owns a chemical manufacturing plant in Port Edwards and buys electricity from WPL. ERCO was asking for lower electricity rates so that they could invest in equipment that would reduce emissions of mercury from the Port Edwards facility.

“All three commissioners agreed that the requests for special electricity rates for ERCO would not only be illegal, it would set a bad precedent that would encourage other companies to look for handouts from ratepayers,” said Charlie Higley, executive director. “CUB applauds the PSC for denying ERCO’s request that utility customers pay for pollution control equipment, which is the responsibility of ERCO’s shareholders, not ratepayers. CUB agrees that reducing mercury pollution is an extremely important goal, and we hope that ERCO will continue with its plans to reduce mercury pollution.”

ERCO had asked the PSC to approve a special contract with WPL to lock in a low electric rate that would only increase 4 percent per year, whereas ERCO’s electricity rates have increased on average 10% per year since 1997. This contract would have forced other WPL ratepayers to subsidize ERCO.

Also in this proceeding, WPL had asked the PSC to approve a special electricity rate for ERCO that would force other WPL customers to subsidize ERCO by at least $23 million over the next ten years. The PSC rejected both the ERCO and WPL proposals.

“CUB appreciates the Commission’s decision to defend 100-year-old principles of utility regulation that protect ratepayers from discriminatory deal making between utilities and powerful companies.”

The PSC also decided today that WPL’s electricity rates for 2007 would only increase by about 4 percent, instead of the 17.8 percent increase requested by WPL. Rates will rise less than requested because of lower prices for natural gas, and because all three commissioners agreed to lower the amount of profit that WPL can make selling electricity, another action applauded by CUB.

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