Big Rate Hikes Sought for We Energies, WPS

  • April 29, 2022
Tom Content

Half of Wisconsin’s utility customers are facing big rate hikes in 2023 after We Energies and Wisconsin Public Service filed proposals Thursday to increase rates by more than 8% and 6%.

This comes at a time when energy prices are already being affected by global market factors that have raised the price of natural gas, home heating and electricity.

As the advocate for Wisconsin’s residential and small business customers, CUB will be scrutinizing these price increase filings closely. We need to find savings for customers wherever we can.

Across all of its electric and natural gas utilities serving eastern Wisconsin, the WEC Energy Group utilities are asking for $475 million in increases to take effect early next year.

The utilities’ request is linked in part to their transition to shut down coal plants and replace them with other forms of power generation. Costs linked to solar and energy storage projects as well as natural gas plants the utilities are proposing to buy or build are key drivers for the request.

We’re concerned about how reliant the utilities are going to continue to be on natural gas at a time when the low prices seen for natural gas appear to be a thing of the past. Higher natural gas prices are being forecast as the U.S. exports more natural gas to help meet energy needs in Europe following the Russia invasion of Ukraine.

In these cases, CUB’s concerned about the impact of more increases on customers struggling to make ends meet.

CUB will be focused on bringing down high utility profits, reducing high customer fixed charges and finding savings by reining in utility profits on coal plants shutting down next year.

Costs linked to coal plants being shut down would still be billed to customers for years to come under the proposal, and the utility would be earning double-digit profit on those plants long after they’re shuttered. That includes the South Oak Creek coal plant in Milwaukee County and the Columbia coal plant in Portage County.

Several years ago, We Energies committed to refinancing costs linked to its former Pleasant Prairie coal plant to a lower rate, a move that produced savings for customers. CUB will press hard to make sure that the utilities aren’t earning high profits from plants that have no role in keeping the lights on or businesses running.

CUB will also focus hard in this case on reining in utility profits that have been far too high well above the national average during a period of low interest rates. We Energies and Wisconsin Public Service earn 10% returns, and We Energies’ Wisconsin Gas utility has an even higher profit rate, 10.2%. In this case the utilities are seeking to increase the portion of their collections that they earn those double-digit returns on.

Here’s a quick look at the requests:

  • We Energies electric customers: $260.5 million increase, or 8.4%
  • We Energies WEGO natural gas customers: $50.7 million, or 10.7%
  • We Energies Wisconsin Gas natural gas customers: $60.1 million, or 8.3%
  • Wisconsin Public Service electric customers: $73.9 million, or 6.2%
  • Wisconsin Public Service natural gas customers: $30.3 million, or  8.3%

And more increases are in the offing. The utilities are requesting permission to tack on additional increases in 2024, primarily linked to new generation projects, but they’re not saying yet how much that would cost customers.

Add it all up and it means another pill for customers to swallow and more pressure on household energy burdens that are already far too high for many customers in southeastern Wisconsin and around the state.

The long-term trend for We Energies customers show how the utilities’ electric rates have risen to be rank 7th highest among 51 Midwest utilities, and its rate increases have far exceeded the inflation levels over the past 20 years, notably the more than $2.3 billion construction of one of the last coal plants to be built in the country before the transition away from coal took hold.

Your voices need to be heard on these proposals.

The We Energies and WPS filings with the PSC on Thursday kick off the rate case process. CUB will be looking closely at the filings, and our experts will weigh in after the PSC staff has completed an audit of the requests. There will be opportunities for CUB members and the public to weigh in along the way, through public comments on the PSC website or testimony at public hearings.

In another case affecting CUB members and Wisconsin utility, Madison Gas & Electric is proposing a 4.3% increase for 2023. Costs linked to new solar projects as well as fuel costs and costs linked to the Columbia coal plant are all contributors to the proposed increase. That case is also just getting under way.

To get more perspective on the cases, check out the CUB Wisconsin YouTube Channel for the latest CUB Tracks conversation.