Rate cases generate buzz, pushback

  • June 12, 2023
870 450 Tom Content

Plans to hike energy charges by more than half a billion dollars are getting attention in what could be a sign of increased public involvement in decisions affecting your rates.

I’m glad to let you know that reporters from outlets across Wisconsin are seeking CUB’s perspective on the wave of utility proposals filed recently with the state Public Service Commission.

It’s heartening to see this level of interest. The stories elevate concerns we’ve raised about the size of the proposals, the magnitude of the increases, and the attempts by some of the utilities to collect even more profit from customers as part of these hikes.

Just to recap, all five of Wisconsin’s big utilities are in for rate cases this year, and the total ask exceeds $500 million. And this comes after the same five companies reported profit exceeding $1.3 billion last year. Check out our overview here.

Here are some links and excerpts from the recent coverage and criticism of the monopoly utilities.

See CUB on WISC TV, interview with reporter Braden Ross

A 14% increase is a lot for anybody to swallow,” Content said. “We’re concerned about the size of these increases, because they’re just a lot for people to handle. That’s why we need to look at options for customers because these are bigger than we’ve seen.”

He said it’s up to the PSC to rein in profits and keep prices reasonable.

“The PSC has to balance those interests between the shareholders and the customers,” Content said. “And we think the shareholders have done very, very well, and now we need to make sure that the customers are doing well, too.”

See Coverage in the Wisconsin State Journal:

Chris Rickert, Wisconsin State Journal

Wisconsin utilities seeking rate hikes (madison.com)

“CUB’s analysts and economists will be evaluating these proposals and look for opportunities for savings, supporting the (state Public Service Commission) staff in its audits,” said Tom Content, CUB executive director. “We remain concerned that our electricity rates are higher than nearly all other Midwest states and that our utilities are earning profits well above what they need.”

Hear CUB on Wisconsin Public Radio interview on The Morning Show

Wisconsin utility watchdog: Proposed rate hikes would push profits further above national norms | Wisconsin Public Radio (wpr.org)

As several investor-owned utilities in Wisconsin are seeking to raise customer rates, a consumer watchdog warns rate increases could fuel profit margins even higher beyond nationwide averages.

Wisconsin Public Radio overview story by Joe Schulz


Content said private utilities in Wisconsin have a “fiduciary responsibility” to their shareholders to bring in higher returns every year. But he said Wisconsin, like many states, has been forcing customers to overpay to support “excessive profit rates.”

“Bills can be 30 percent to 40 percent cheaper for Wisconsinites who live in those cities where the city owns their utility, versus the residents who have companies traded on Wall Street as their utility,” Content said. “That just shows the power and the impact of pushing these growth plans that are pushing high profits at the expense of customers.”

Hear CUB on WORT Local News on WORT-FM with Nate Wegehaupt


Four of the five major utility companies here in Wisconsin are asking to increase their rates over the next two years. The biggest proposed increase comes from Alliant Energy, whose territory ranges from the Illinois border to the center of the state . They seek a total increase of around 18%, primarily to help fund new solar projects.

CUB Executive Director Tom Content  spoke with WORT Producer Nate Wegehaupt about concerns with the newest proposed utility rate hikes.

CUB has served as a citizen-led utility watchdog since 1979, and has long advocated for lowering utility costs for consumers across the state.

Western Wisconsin Spotlight on Xcel Energy and its case:

Eau Claire Leader Telegram / Country Today story by Andrew Dowd

Xcel Energy proposes rate hikes in ’24 for Wisconsin customers | Country Life News | leadertelegram.com

Xcel Energy’s 10% profit margin could go up to 10.25% as part of next year’s planned rate increase. Content said that would be the highest profit margin of any power company operating in the state.

Hear CUB on WPR La Crosse weekly interview show “Newsmakers” with Ezra Wall

Possible energy utility rate hike | Wisconsin Public Radio (wpr.org)

Xcel Energy is asking the Public Service Commission for permission to raise its rates again this coming January. But will the rate hike be approved? And will the public have a chance to weigh in before it is? We’re talking about that today on Newsmakers.

Murphy’s Law Opinion Column by Bruce Murphy, editor at Urban Milwaukee:

Murphy’s Law: We Energies Wants Yet Another Rate Hike » Both Consumer and Business Advocates Castigate Excess Profits of Utilities

Columnist Bruce Murphy urges the PSC to pay attention to the concerns raised by CUB and the Wisconsin Industrial Energy Group, which represents big manufacturers. An excerpt:

In its testimony before the PSC last year, CUB argued that the state commission had not done “a deep dive analysis or review of utility profit rates…  for most of the past decade for these utilities.” CUB pushed for a reduction in the allowed profit rate or return on equity, cutting it from an average of about 10.1% for utilities in Wisconsin to about 9.1%.

The whole question of how great a return on equity a monopoly utility needs to borrow money from Wall Street has gotten increasing attention from researchers. A 2019 study by researchers at Carnegie Mellon in 2019 found that “Based on a database of U.S. electric utility rate cases spanning nearly four decades … it would appear that regulators are authorizing excessive returns on equity to utility investors and that these excess returns translate into tangible profits for utility firms.”

A 2022 report by researchers at the UC-Berkeley collected data on over 3,500 regulatory rate cases for electricity and natural gas utilities between 1980 and 2021 and found that regulators were allowing an excess rate of return on the cost of capital and that “excess costs to consumers could range from $2 billion to $20 billion per year, with the most likely number in the middle of that range.”

In short, that’s about $10 billion per year in excess profits for utilities, all paid for by rate payers. And to judge by the utility rates in Wisconsin, which are 10% higher than for both the Midwest’s and the nation’s utilities, the highest excess profits are going to this state’s utilities. And We Energies stands at the top of that group. Maybe someone at the PSC should start paying attention.

The Wisconsin utilities’ rate cases are being reviewed by the auditors and analysts at the Public Service Commission and by the economists and analysts who are part of CUB’s regulatory team. We’ll let you know when public comment opportunities about these cases are open for customers to weigh in with their thoughts.

Minnesota Regulators Reduce Profit, Rate Hike for Xcel Energy:

CUB Regulatory Strategist Dr. Steve Kihm, an economist with decades of experience, brought his perspective and analysis to the Xcel Energy rate case in Minnesota. Kihm was hired by CUB of Minnesota for its work in the Xcel case. Commissioners in Minnesota relied on his analysis to help arrive at a fair profit for Xcel’ Minnesota utility.

The utility had sought a profit rate, or return on equity, of 10.2%, up from 9.06%. The Minnesota PUC approved a small increase, to 9.25%, which was much closer to CUB Minnesota’s requested profit rate than what the utility sought.

Minnesota Public Utilities Commission reduces Xcel’s proposed rate increase by more than half (govdelivery.com)

Xcel Energy will ask state regulators to reconsider electric rate hike | MPR News