In the spring of 2007, We Energies applied for permission from the PSC to increase electric rates for 2008 by $712 million or 28 percent, the largest single-year increase in the utility’s history.
CUB argued that We Energies should not be allowed to charge ratepayers $22 million for electricity it had to buy in 2005 while making repairs to the Point Beach Nuclear Power Plant, should not be allowed to keep $70 million in proceeds from the sale of the Point Beach Nuclear Power Plant, and that the level of profit sought by We Energies should be reduced, saving ratepayers $14 million. CUB has been urging the PSC to reduce utility profits for many years, and thankfully, the PSC has been reducing utility profits for the past three years, although they still remain higher than utility profits in other states.
On December 20, 2007, the PSC issued its decision: starting in January 2008, electric rates would only increase by 3.4 percent. Rates will also increase another 3.5 percent in January 2009.
In June 2007, Xcel Energy (also known as Northern States Power) applied to the Public Service Commission for permission to raise 2008 electric rates by $67 million, or 14 percent.
Given the huge increase sought by Xcel, CUB urged the utility and the PSC to adopt rate design options that would allow residential customers to better control their electricity usage and bills while also reducing costs for the utility. CUB also testified that customers should receive value from Xcel’s proposed installation of “automated meters,” which can be read by a computer instead of by a person. Automated meters can provide information to customers regarding the electricity they are using, and how much it costs, allowing customers to change their usage and lower their utility bills. Though the PSC decided that Xcel could install the automated meters, Xcel must work with CUB’s experts to develop options so that customers can reduce their electricity use and lower their bills.
CUB objection to an increase in the monthly electric “customer charge” from $8 to $10 saved residential ratepayers $4.5 million. CUB also requested a reduction in profits collected from customers. The PSC agreed, saving customers about $1.6 million.
The PSC decided Xcel’s rate hike in early January 2008, and raised 2008 electric rates by $39 million, or 8 percent. The smaller-than-asked-for increase meant customers saved about $18 million.
In May 2007, MGE applied to the Public Service Commission for an electric rate increase starting in January 2008 of almost $20 million, or about 6 percent.
CUB challenged MGE’s request to increase rates, arguing that MGE should develop new rate options that would allow customers to better control their electricity usage and costs. In its December order, the PSC directed MGE to work with CUB to investigate innovative residential rate options that would promote energy conservation. CUB raised concerns that, under MGE’s proposal, residential customers would pay more than their fair share of utility costs, while commercial and industrial customers would pay less. The PSC agreed with CUB and reduced the size of the rate increase for all residential customers by $1.4 million. CUB also asked the PSC to reduce MGE’s profits, and the PSC agreed; reducing profits by about $1 million.
In mid-December 2007, the PSC issued its order approving an electric rate increase of $16 million (almost 5 percent) for rates that took effect in January.
AB 346, introduced last year, would have repealed Wisconsin’s so-called “nuclear moratorium” law, Wis. Stat. 196.493. The Wisconsin Legislature concluded its regular business on March 13 without repealing the nuclear moratorium.
The nuclear moratorium law doesn’t ban the construction of nuclear plants. It simply requires that several criteria be met before the Public Service Commission can authorize the construction of a nuclear plant. Two of the most important criteria are that:
CUB believes that unless nuclear power can pass these simple requirements, nuclear power plants should not be built in Wisconsin.
The Wisconsin Legislature concluded its regular business on March 13 without passing legislation that would have deregulated local phone service.
AB 561 and SB 285 were introduced last year, which would have gutted the laws that regulate local phone service. Had these bills passed, local phone companies could have charged customers using “plain old phone service” any price they wanted.
In response to this legislative activity, the Public Service Commission has opened an investigation to determine whether Wisconsin’s telephone regulations should be changed. CUB will be participating in this investigation, which will likely conclude by the end of 2008. We’ll be asking the Commission “can you hear us now?” as we make the case that consumers still need protection from price gouging and poor service from telephone companies.
Court sides with CUB; upholds prohibition of "retroactive rate making"
CUB sided with the PSC in a suit brought against the Commission by Wisconsin Power & Light (WPL) regarding interpretation of the fuel rules. WPL took the PSC to court when the PSC denied the utility a rate increase based on increases in fuel costs associated with the shutdown of the Kewaunee Nuclear Power Plant. The PSC originally ruled that to have granted the increase would have violated the long-stranding prohibition against retroactive rate making. WPL sought to have the PSC decision overturned. CUB entered the case in support of the PSC position. The courts sided with CUB and the PSC and ruled against WPL.