November 13, 2006

MADISON - The Citizens Utility Board (CUB) recently filed a legal brief urging the Public Service Commission of Wisconsin (PSC) to reject proposals by ERCO Worldwide, Inc. and by Wisconsin Power & Light Company (WPL) that would force ratepayers to subsidize the operations of one of ERCO's plants.

CUB made its filing in a proceeding at the PSC that will determine the electric rates that WPL can charge customers starting January 1, 2007.

ERCO owns a chemical manufacturing plant in Port Edwards and buys electricity from WPL. ERCO claims they need a subsidy to invest in technology that would reduce emissions of mercury from the Port Edwards facility.

"Although reducing mercury pollution is a laudable goal, forcing ratepayers to bail out polluters would not only be illegal, it would set a bad precedent that would allow other polluters to look for handouts from ratepayers," said Charlie Higley, executive director.

In this proceeding, WPL has asked the PSC to approve a special electricity rate for ERCO that would force other WPL customers to subsidize ERCO by at least $23 million over the next ten years. Certain industrial customers could see their monthly bills increase by $450.

Meanwhile, in the same proceeding, ERCO has asked the PSC to approve a special contract with WPL that would lock in a rate that would only increase 4 percent per year, whereas ERCO?s electricity rates have increased on average 10% per year since 1997. This illegal contract would also provide a ratepayer subsidy to ERCO, especially if electricity rates continue increasing more quickly than 4 percent per year during the next 10 years, which is almost a certainty.

CUB urges the PSC to reject both the WPL proposal and the ERCO proposal. These special deals would directly undermine a bedrock principle of utility rate regulation that prohibits utilities from offering special deals to their customers.

"It's simply unfair and against the law for customers to receive preferential treatment from their utility. Ratepayers should not be forced to pay for cleaning up pollution caused by non-utility businesses," concluded Higley.

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