June 09, 2005

MADISON - The Citizens Utility Board (CUB) will fight the attempt by Wisconsin Public Service Corporation (WPS) to keep $127 million that instead should be quickly refunded to ratepayers if the sale of the Kewaunee Nuclear Power plant is finalized.

On June 6, WPS filed an application with the Public Service Commission of Wisconsin (PSC) and the Federal Energy Regulatory Commission (FERC) for permission to keep $127 million, which was collected from ratepayers to decommission (dismantle) the Kewaunee plant when it is retired from service. Instead of returning the money to ratepayers, WPS wants to keep it to pay for costs caused by the ongoing outage at the plant and the expected loss on the sale of the plant to Dominion Resources, an energy company headquartered in Virginia.

CUB will fight this request by WPS to keep the decommissioning money in a proceeding at the PSC to determine the electricity rates WPS will charge electricity customers during 2006. WPS has requested permission to increase 2006 electricity rates by $90 million or 11.4 percent.

In April, WPS and Wisconsin Power & Light Company (WPL) received permission from the PSC to sell the Kewaunee nuclear plant to a subsidiary of Dominion. When the Wisconsin utilities proposed to sell the Kewaunee plant, they claimed that the sale would result in a financial gain. They also sweetened the deal by promising to return decommissioning funds to ratepayers. In its order approving the sale, the PSC required the Wisconsin utilities to return the decommissioning money to ratepayers.

"WPS touted the return of this $127 million as a benefit to ratepayers and an incentive to sell the plant," said Charlie Higley, CUB executive director. "WPS should keep its promise to return these funds to customers if the sale to Dominion is completed, rather than use the money to bail out its shareholders."

CUB will argue that decommissioning the nuclear reactor was the only reason the $127 million was collected from WPS ratepayers, and that the money should be returned since Dominion will be responsible to dismantle the reactor if the sale is closed. CUB will also argue that the costs caused by the outage at Kewaunee may be the fault of management and should not be paid by ratepayers. In addition, CUB will argue that shareholders should pay for any loss from the sale because the utilities wanted to sell the plant, not ratepayers.

In May, CUB filed a lawsuit against the PSC to stop the sale of the Kewaunee power plant to Dominion, which would threaten the health, safety, and pocketbooks of Wisconsin ratepayers by eliminating state oversight over a nuclear power plant located in Wisconsin.

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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, the legislature, and the courts.