US Rankings: Power Prices in Wis. Are Out of Whack
Last year, when I took over as executive director of the Citizens Utility Board the first thing I did was find out the price Wisconsin pays for electricity compared with other states.
These stats aren’t hard to find, if you know where to look. But what I found wasn’t easy to take. Wisconsin customers are still paying too much; our electricity prices are just too high.
In 2016, Wisconsin electric customers paid electricity prices well above the national average, well above the Midwest average, and 13th highest in the country.
Pols in Wisconsin used to brag about having cheap energy rates, but now other places have those bragging rights.
Across much of the US, in that vast expanse folks on the coasts call fly-over country, Americans enjoyed low electricity prices for a long time. But now only Michigan has higher electricity prices than Wisconsin in fly-over country.
Why are Wisconsin prices so high? The image of a swinging pendulum comes to mind.
Our state under-invested in its utility infrastructure for years and years, until concerns about the state power supply and its reliability hit Wisconsin in the late 1990s. Fears of power shortages drove political will to change energy policy and enact legislation that simplified the process of proposing and building new power plants in Wisconsin.
Clearly some investment was needed. But some wrong choices and over-investment – the pendulum swinging too far the other way – led Wisconsin to a spot where our energy prices aren’t competitive.
And so after more than a year on the job it was time to check once again on how our competitiveness is stacking up.
It turned out that for 2017 and the first half of 2018, we’re still ranked as the 13th highest state in the country in average electricity prices for homeowners and renters. Our rates are higher than every Midwestern state except Michigan.
A similar story can be told when I looked at business electricity rates to see how prices stack up for the other folks CUB represents, small businesses like the coffee shop on Main Street, the craft brewery, and the small manufacturer. For these businesses, commercial rates and industrial rates in Wisconsin are also out of whack; the U.S. Energy Information Administration data show that for the first half of 2018 Wisconsin ranked 14th highest in commercial power rates and 13th highest in industrial rates.
Our residential rates this year are 13% higher than the national average, and 18% higher than the average of 10 other states across the Midwest.
It’s time to stop the pendulum from swinging back and forth! Let’s start thinking about customers. Energy costs are big concerns for businesses. How much they pay needs to be at the front and center for a change. As a state, we’ve had a relentless focus on keeping our utilities financially healthy, and we’ve been rewarding utilities, their executives, and their shareholders with big profits that come with putting more steel in the ground (power plants and power lines).
High rates are on the radar for some. Take the new chairman of the Public Service Commission, Lon Roberts. At his confirmation hearing, he told Senators that Wisconsin has done a good job on the reliability piece of utility regulation.
“Now we need to work on the affordability piece,” said Mr. Roberts, who became chairman of the Commission this year.
That’s an encouraging sign. But we need the entire PSC and other leaders in Madison to move from talk to action when it comes to tackling that affordability piece!
With your help and your support for CUB – your independent consumer voice – we hope to get this state to a place where the pendulum doesn’t swing so much, to a point where we say Wisconsin energy rates are competitive once again.
— Tom Content, CUB Executive Director