Public Service Commission considers We Energies' proposal to raise rates in 2023, community advocates speak out
Every two years electric utilities in Wisconsin are allowed to request more money from customers. The complicated process is called a “rate case” and the Public Service Commission coordinates it. We Energies is asking for more than an 8% increase starting in 2023.
Every new rate case brings with it a flurry of activity. In this case, Public Service Commission staff are busy crunching numbers to determine whether the 8.4% rate increase We Energies wants is justified.
“That’s what CUB and the PSC staff have been looking at since it was filed,” says CUB executive director Tom Content.
CUB stands for Citizens Utility Board. The Wisconsin Legislature created it in 1979. The nonprofit advocates for “fair, safe and reliable utility service” for individual citizens to small businesses.
“CUB focuses on low income but also represents all residential and small business customers,” Content adds.
Content says CUB is concerned about how those customers will fare under We Energies rate increase that—if approved—would start in 2023 when winter temperatures fall and heating costs climb.
We Energies predicts average bills would rise by about $6 a month. But Content says that increase can be daunting for some people.
“Generally I think people think oh $5 a month isn’t bad, or $6 a month, whatever the increase ends up being. Sixty or 72 bucks a year it affects different people different ways,” Content says.
Content says it’s important for the Public Service Commission to hear from people for whom a rate increase would be a burden. “I think having that voice in the case and hearing directly from voices in this case I think can be beneficial,” Content says.
That’s why Walnut Way Conservation Corp. decided to intervene in the case.
The Lindsay Heights-based nonprofit came to life 22 years ago to restore the neighborhood and drive out crime. Executive director Antonio Butts says now it’s time to speak out for energy affordability.
“[We Energies plan] doesn’t take into account the income and wealth gap in Milwaukee, so we’re saying that needs to be more equitable,” he says.
And Walnut Way is calling for a community benefits agreement.
“Since we know all roads lead to decarbonization, we’re looking to be focused in on addressing this issue on an ongoing basis and we believe the utility should also be a part of the process by supporting it financially— by supporting it with solutions —but then also allowing the leadership and management to be co-led by key stakeholders in this work who are very close to these vulnerable communities and can help drive us toward the solutions we need,” Butts says.
The utility argues it needs to charge customers more. Here’s media relations director Brendan Conway.
“The big one is capital investments we’re making in renewables, battery storage, new clean energy natural gas generation, that what’s really driving our filing. And then also some reliability investment that we’re proposing to make including some significant grid hardening investments including in Milwaukee,” Conway says.
And he says for customers who may struggle, We Energies always stands by to help people in need.
“We have programs that we work with customers. We donated $4 million last year to the Keep Wisconsin Cool Keep Wisconsin Warm Fund. And what we tell our customers is reach out to us. We’re going to connect them with heating assistance if they’re eligible; we’re gonna help them with payment plans or budget billing or energy assistance of energy efficiency resources,” Conway says. “We’ll continue to do those things.”
But Tom Content of CUB argues there are ways We Energies can pay for its growing costs. For instance, he says the company could cut back its profit margin.
“Our utilities have higher than average profits compared to around the country. They’re at 10 or 10.2%. Our contention is that it’s too high and should come down,” Content says.
CUB also suggests We Energies explore cost savings by beginning now to plan for the retirement of its Oak Creek coal-burning power plant. Content says the company could use securitization, which is a process the utility deployed for a plant that closed in 2018.
“We Energies and CUB along with the industrial customer group WIG negotiated a settlement a few years ago for the Pleasant Prairie Power Plant. That refinancing processed saved tens and tens of millions of dollars. It may not be a lot of money in this year’s case but the precedent of being able to undertake this refinancing is so important that we want the PSC to have this issue front and center when it comes time to make its decision this fall,” Content says.
Spokesperson Brendan Conway says that move would be premature. Earlier this summer We Energies announced it is holding off on the plant’s retirement.
“We’re realized keeping the Oak Creek plant just a short amount of time about 12 to 18 months will actually save customers money and will us to continue to have that reliable service. And when we bring on the new solar plants and battery plants and wind farms, we’ll be able to then phase those things out. We can also probably take a closer look at some of the financing as we get closer to retirement. It got pushed out from 2023 and 2024 to now 2024 and 2025. So those are discussions we’d probably have to have in the future," Conway says.
As for CUB’s suggestion that We Energies cut back on profits to ease residential customers’ financial burden, Conway says having a strong financial return benefits all of We Energies ‘customers.
“If we are financially strong, we are able to attain more attractive financing terms, lowering our borrowing costs for all... And that in the end, saves customers money,” Conway says.
The Public Service Commission will decide whether We Energies can raise its rates. The PSC is accepting comments on the proposal online through Oct. 31. The agency also will be holding a public hearing before announcing its decision.
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