Two of Wisconsin’s largest utilities have reached a deal to recover half a billion dollars from customers through higher rates next year due largely to rising inflation, natural gas prices and costs tied to their clean energy transition.
We Energies and Wisconsin Public Service filed the proposed settlement Monday with the Wisconsin Public Service Commission. The utilities reached the deal with ratepayer and renewable advocacy groups, labor unions and businesses intervening in utilities’ requests to increase rates next year.
Under the settlement, the utilities would recover more than $507 million in expenses next year. We Energies would refinance $100 million of roughly $500 million that’s yet to be paid off from investments in pollution controls at the Oak Creek power plant. The deal also writes off customer late fees from the COVID-19 pandemic, reduces fixed monthly charges for ratepayers and extends a low-income forgiveness program.
“We think that this settlement is a real positive step forward for our customers. It’s a balanced approach to resolving the major issues in these various rate cases,” said Brendan Conway, the utilities’ spokesperson. “It allows us to continue our efforts to build a bright, sustainable future (and) provides customers with affordable, reliable and clean energy now and in the future.”
The utilities would recoup that $507 million next year through rate increases for consumers. We Energies is proposing to raise electric rates by 8.4 percent and natural gas rates by 10.7 percent beginning next year. WPS wants to increase electric rates 6.2 percent and natural gas rates by 8.3 percent.
According to the utilities, the rate hikes are largely tied to around $1.5 billion of investment in clean energy projects through next year. At the same time, utilities and customers are facing financial pressures related to soaring inflation and natural gas prices.
The settlement contains significant benefits for customers, according to ratepayer advocate the Citizens Utility Board. Tom Content, the board’s executive director, said that includes refinancing the remaining balance on the Oak Creek coal plant and a discount rate for low-income ratepayers on their bills as part of a new pilot program.
“There are cost increases that can’t be controlled, but there are significant savings opportunities in here,” said Content. “It leaves us the ability to continue to fight on the issue of high utility profits that have been too high for too long and are costing customers billions of dollars around the country every year.”
The PSC will have the final say over the proposed settlement, as well as utilities’ profit rates and how those costs will be spread among residential and industrial customers.