Energy Regulators to Focus on Rates

Energy Regulators to Focus on Rates; Priority is to Keep Them Reasonable and Affordable

Oct 12 - Milwaukee Journal Sentinel

Energy regulators to focus on rates

Priority is to keep them reasonable and affordable

The $4.3 billion it will cost to build new power plants and power lines in the next six years will push up electric rates, but state energy regulators signaled Thursday that keeping rates "reasonable" and "affordable" will be one of their key priorities.

On Thursday, the Public Service Commission approved without comment an energy assessment that recommends stepped-up scrutiny of electric rates and plans for new power lines. It was the commission's first meeting with its new two-Democrat majority.

Wisconsin's electric rates have seen double-digit increases since 1997, and the state's rates are no longer the most affordable in the upper Midwest -- as they were seven years ago.

In the past seven years, the average residential bill has increased 32 percent; the average small business bill, 29 percent; and large industrial customers' bills, 26 percent.

Wisconsin had the lowest rates in the upper Midwest in 1997 but now ranks in the top half of those states in residential rates. Commercial and industrial rates remain below regional and national rates, however, and residential rates are still 4 percent below the national average, the commission said in the assessment, known as Energy 2010.

"The commission will carefully review rate cases and expect utilities to be ready to demonstrate in rate proceedings whether or not their electric rates and services are comparable with ther utilities in the region," the report says.

The report was finalized just days after Madison-based Wisconsin Power & Light Co. filed a request to raise rates by $100 million -- an increase that a Madison-based customer advocacy group says would make that utility the most expensive in the Midwest.

It also comes while two proposals to increase electric rates for Milwaukee-based We Energies are pending. Those proposals would add $4.25 to a typical residential customer's monthly bill of $73.22. The increases would be used to pay for environmental upgrades at aging coal-fired power plants and other environmental initiatives, as well as to help finance construction of the new power plants We Energies has planned for Port Washington and Oak Creek.

Burnie Bridge, who chairs the commission, termed the assessment an "action plan that will focus on cost containment" as well as better coordination between new power lines and power plants.

The commission said it plans greater scrutiny of power line planning being undertaken by Pewaukee-based American Transmission Co. The oversight board also said it plans to explore ways to increase energy efficiency and the use of renewable power, particularly electricity generated by wind turbines. Those are recommendations made by a task force appointed by Gov. Jim Doyle.

These promises were welcomed by Charlie Higley, executive director of the Wisconsin Citizens' Utility Board, a group that advocates for residential customers in commission proceedings.

"The previous commissions have provided Wisconsin utilities with the highest profit rates in the country, and that's just unacceptable," Higley said. "It's impacting economic development as well as household incomes and budgets."

Also Thursday, the commission authorized customer refunds to reduce the size of surcharges sought by two state utilities because of high natural gas prices.

The summer's unusually cold weather will result in savings on the monthly electric bills from Madison-based Wisconsin Power & Light Co. and Green Bay-based Wisconsin Public Service Corp.

Both utilities had received interim approval earlier this year to raise rates because of the high cost of natural gas, which utilities are allowed to pass along to customers.

But the cold summer meant utilities didn't have to rely on natural gas-fired power plants as much as they would have had the weather been normal, the commission said.

A typical residential customer of Wisconsin Power & Light Co. will see a one-time refund of about $2, while WPS customers will get a one-time refund of about $1.25, the commission said.

For far more extensive news on the energy/power visit: http://www.energycentral.com .