Despite severe reductions in funding, CUB worked hard to cut increases out of utility bills in 2016 by intervening in cases before the Public Service Commission of Wisconsin.

Below are summaries of a sample of cases CUB intervened in before the PSC in 2016. Each case is identified by a “docket number,” which is included in the title of each case summary. You can view most of the documents submitted in each case, including CUB’s expert testimony and legal briefs, by entering the docket number on the PSC’s website, http://psc.wi.gov.
 

WEPCO’s 2017 Fuel Costs Cut by $36 Million, PSC Refuses to Cut Biomass Plant Costs (6630-FR-106)
Not needed! Too expensive! That’s the biomass bottom line for We Energies power plant in north-central Wisconsin.

WEPCO filed an application with the PSC on July 1, 2016 to reduce fuel costs for 2017 by $15.8 million, or 0.5 percent.  CUB intervened in the case to review whether the proposed reduction in fuel costs could be greater. 

Following a PSC staff audit and expert testimony, the Commission determined that WEPCO’s 2017 fuel costs should be cut by $36.3 million, or 1.3 percent, from from where they stood in 2016.

As part of the 2017 fuel case, CUB undertook a detailed review of the fuel costs of WEPCO’s biomass power plant in Rothschild.  Rothschild is a very expensive 50-megawatt power plant approved by the PSC in 2011. The PSC approved the plant based on WEPCO’s claims that it would serve as a baseload power plant to provide electricity to WEPCO’s customers, provide steam to a paper mill, and generate renewable resource credits.

In the Rothschild case, CUB claimed that the $294 million biomass plant was:

CUB used WEPCO’s 2017 fuel case as an opportunity to review Rothschild’s fuel costs to determine if they should be paid for by ratepayers.  CUB determined that:

In making its decision to approve Rothschild’s 2017 fuel costs the PSC recognized CUB’s concerns related to the plant’s operating and uneconomic dispatch costs.  However, it determined that those costs would be better evaluated in a rate case where all relevant costs could be evaluated.
 

Costs Soar for Pollution Control Equipment at Wisconsin Public Service Coal Plant (6690-FR-105)
Project delays and spiraling costs for a novel pollution control technology deployed at a coal plant haunt WPSC customers

In July 2016, Wisconsin Public Service Corporation applied to the PSC for approval to increase electric fuel costs by $13.8 million for 2017.  CUB intervened in the case and filed discovery. 

The Commission issued its final decision in December 2016. WPSC’s fuel costs were decreased by $4.7 million compared to its 2016 fuel costs, and resulted in a WPSC revenue requirement reduction of approximately 0.5 percent.

The Commission also ordered that any liquidated damages or refunds associated with WPSC’s ReACT contract for the Weston 3 coal power plant be used to pay down the escalating costs of the ReACT project.  Weston 3 is a 320-megawatt coal plant operated by WPSC near Wausau.

ReACT is a technology used to reduce emissions of sulfur dioxide, nitrogen oxides, and mercury emissions from coal power plants.  It is a little-used technology with only three coal plants worldwide using it prior to WPSC receiving authorization from the PSC in 2013 to install it at Weston 3.  The costs for ReACT at Weston 3 have increased dramatically from original projections:

It is essential that the ReACT cost increase be reviewed in a future WPSC rate case to determine whether the increased costs are prudent. If not, ratepayers should not be liable for the costs. CUB will be vigilant in monitoring this plant.
 


WPL Sought to More than Double Monthly Fixed Charge on Power Bills. (6680-UR-120)
While profit rates are falling, the monthly fixed charges customers pay to the Madison-based subsidiary of Alliant Energy Corp. are on the rise.

In May 2016, Wisconsin Power and Light (WPL) requested authority from the PSC to increase electric rates by $12.9 million, or by 1.13 percent, and to increase natural gas rates by $9.3 million, or by 5.8 percent. 

In addition, WPL requested an astounding 135 percent increase in the monthly fixed charge for residential electric ratepayers from $7.67/month to $18/month in 2018.

Increases in the fixed monthly charge:

CUB provided expert testimony that the fixed customer charge should be set no higher than $9/month.  However, the Commission approved a fixed customer charge of $15/month for 2017 and 2018, a 95% increase.

CUB did make significant progress in reducing WPL’s return on equity (ROE) from 10.40 percent to 10.00 percent which translates to approximately a $10 million/year reduced revenue requirement.

In addition, WPL agreed to an earnings sharing mechanism with ratepayers. Highlights:

The Commission issued its final decision in December 2016.  For 2017, WPL’s electric revenue requirement was increased by $9.4 million, or 0.83 percent.  Residential electric rates were increased by 4.68 percent, whereas the Commission approved a rate decrease of 1.19 percent for small commercial and industrial customers, and a 1.78 percent rate decrease for large commercial and industrial customers.

The Commission also approved a $9.2 million increase (5.7 percent) for WPL’s natural gas customers in 2017.

 

CUB Battles MGE’s High Utility Profit Request and Wins (3270-UR-121)
Utility profit rates will be at their lowest level in decades following CUB’s advocacy and the PSC’s decision in the 2016 rate case for Madison Gas & Electric Co.

In April 2016, MGE applied for a $6.9 million electric rate increase, 1.65 percent, and a $5.6 million natural gas rate increase, 3.67 percent.  MGE based its revenue requirement request on a 10.2 percent return on equity (ROE). 

MGE’s request for a 10.2 percent ROE far exceeded what most public utility commissions authorized for utilities in 2015.  For vertically integrated electric utilities like MGE, 2015 ROE decisions averaged 9.72 percent.

CUB, along with another customer group that represents large electric industrial ratepayers, challenged MGE’s ROE request by filing expert testimony that supported an ROE of 9.75 percent since that would be comparable to recent decisions by other commissions around the country.

CUB argued that:

CUB also supported a reduction in the monthly fixed customer charge for residential electric customers.  MGE currently charges residential electric customers a fixed monthly charge of $19/month just to be connected to the utility system.  This charge has been increased by 118% since 2012.

Increases in the fixed monthly charge:

The Commission set rates for 2017 in its order issued in December 2016.  The Commission:

 
 

Northern States Power Company Agrees to Refund Excess Earnings to Customers (4220-UR-122)

In April 2016, Northern States Power Company-Wisconsin requested an increase in its electric and natural gas rates.  The PSC approved an electric rate increase of $22.5 million (3.2 percent), and a $4.8 million (3.9 percent) natural gas rate increase for the 2017 test year.

Residential electric rates will increase 3 percent, with other customer group rates increasing slightly more.  The increase in natural gas rates is due exclusively to the ongoing costs for clean-up of legacy manufactured gas plant contamination on the shore of Lake Superior in Ashland.

NSPW did not propose to increase the residential electric fixed customer charge, which remains at $14/month In 2017 [However, another increase in the fixed charge, $3 a month, has been proposed for 2018.] Also, NSPW did not propose to change its currently authorized return on equity (ROE) of 10 percent.

This case was resolved through a settlement agreement between NSPW, CUB, and other stakeholders.  A significant victory for ratepayers was NSPW’s agreement to return any excess revenues above a 10.0 percent ROE to customers.