For Immediate Release: July 6, 2010

CUB Sues PSC Regarding Subsidies for Industrial Customers

MADISON – The Citizens Utility Board filed a lawsuit on Friday, July 2 against the Public Service Commission for its decision to allow Wisconsin Power & Light to give discounts to industrial customers that will likely be subsidized by residential customers and others.

Wisconsin Power and Light, a utility subsidiary of Alliant Energy, applied with the PSC on November 13, 2009 for permission to offer an “economic development rate” that would provide certain large industrial customers with discounts on electricity service. The PSC issued an order approving this rate on June 4, 2010.

CUB has long been opposed to rates with discounts, because they usually force other customers to pay for the discount. The laws that regulate utility service in Wisconsin prohibit utilities from charging rates that provide discounts to one customer that are subsidized by other customers. CUB noted many of these concerns in correspondence to the PSC dated February 17 and March 16, 2010, and in its lawsuit filed last Friday.

Although PSC Chairperson Eric Callisto and Commissioner Mark Meyer approved the discounted rates, Commissioner Lauren Azar voted against them, noting that subsidies for certain industrial customers may cause higher rates for residential and commercial customers. Ms. Azar also issued a dissenting opinion on June 25, 2010, in which she called the rate “essentially a giveaway to businesses.”

“CUB filed this lawsuit to protect residential customers from subsidizing large, politically powerful companies,” said CUB executive director Charlie Higley. “The job of the PSC is to set electric rates that are fair, just, and reasonable, and the economic development rate approved by the PSC violates these legal principles.”

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