December 22, 2010

MADISON - Today the Public Service Commission established rates for Madison Gas & Electric Co. that were lower than the utility requested.

In an application filed on April 22, 2010, MGE requested to increase electric rates by $32.8 million, or 9.4 percent. Today's decision by the PSC reduced the rate hike to about $8 million. Starting January 1, 2011, electricity rates for MGE customers will increase by about 2.3 percent.

The PSC agreed with CUB to reduce rates by about $1.8 million. MGE was trying to get customers to pay for the costs of running the West Campus Cogeneration Facility during times in 2011 when it may not be economical to do so. MGE expects to run the facility more during 2011 to make up for lost production at the Charter Street plant while it undergoes modification.

CUB and other parties urged the PSC to reduce the profits that ratepayers would have to pay to MGE, which requested a return on equity of 10.4 percent. The PSC set the ROE at 10.3 percent, which will save ratepayers $520 thousand from what MGE requested.

"CUB fought to keep residential customers from paying higher rates when households could least afford it," said Charlie Higley, executive director of CUB. "We're glad the PSC was able to reduce the size of MGE's rate increase to 2.3 percent."

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The Citizens Utility Board of Wisconsin is a member-supported, nonprofit organization that advocates for reliable and affordable utility service. CUB represents the interests of residential, farm, and small business customers of electric, natural gas, and telecommunication utilities before the Legislature, regulatory agencies, and the courts.