By THOMAS CONTENT tcontent@journalsentinel.com, Journal Sentinel

Friday, April 16, 2004

Construction of $3.7 billion in power plants to quench Wisconsin's thirst for electricity will add $70 a year to electricity bills by 2010 on top of the $88 a year ratepayers already have swallowed in the past five years.

Wisconsin electricity demand hit an all-time high last year and is growing at 2.5% a year -- enough to require a major new power plant every other year.

Those are among findings of Energy 2010, a strategic energy assessment prepared by the state Public Service Commission and released Thursday.

Rates have been rising because of volatile natural gas prices and work on the state's transmission lines, the commission said. The average Wisconsin rate, while lower than the nation's, rose to $583 by the end of 2002.

Before 1997, electric rates were declining, making that year a low point for Wisconsin rates. Since 1997, when the average Wisconsin resident paid $495 a year, residential rates have risen 32%, more than twice the increase of the Consumer Price Index, the commission said.

Business rates also rose, with commercial rates up 30% and industrial rates up 25%.

New power plants alone would increase rates by 12%, and that doesn't include $1 billion American Transmission Co. will spend by 2010 to expand the state's network of transmission lines. Chief among its projects is the $420 million Wausau-to-Duluth power line, the report said.

Wisconsin's electricity rates, lowest in the upper Midwest only seven years ago, now rank in the middle of the pack -- an increase with implications for economic development.

"It is difficult to project how future rates in Wisconsin will compare with those of other states," the report says. "At present, Wisconsin's electricity rates are competitive, although that competitiveness has eroded during the past five years."

The strategic energy assessment is meant to be used as an educational tool, a snapshot and a guidepost for the commission, utilities and others interested in energy issues.

Commission and utility representatives will discuss the state's energy future and the report during a series of six public forums around the state in the next six weeks, including one planned for June 1 in Milwaukee.

The document serves as the commission's response to criticism that the state has been too reactive in recent years, making vital energy decisions on an ad hoc, case-by-case basis that serves the interest of big utilities.

Utility officials say the building boom of power plants and transmission lines follows years of failing to build power plants to keep up with demand, and the report notes that electric reliability has improved in recent summers.

After an energy reliability crisis in the late 1990s that resulted in power shortages and threatened blackouts in consecutive summers, the state encouraged construction of power plants by abandoning a planning process that utilities attacked as stifling and unworkable.

Now that power plants and transmission lines are under construction or approved, customer groups, legislators, commissioners and Gov. Jim Doyle sought a more cohesive planning process to help Wisconsin foster the use of renewable resources and energy conservation as ways to help meet growing demand.

But the report doesn't go far enough in urging more conservation and renewable energy, said Charlie Higley, executive director of the Wisconsin Citizens' Utility Board in Madison.

"We don't know if the plans by utilities are going to exacerbate rates or whether it's going to keep rates reasonable," he said. "Our rates may go up higher than they should, and we may have more pollution than we should because there's nothing (in the report) showing us whether the utility proposals are the right ones."

The expected rise in electricity prices shouldn't come as a surprise given that the state hasn't built a major power plant or high-voltage transmission line in decades, commissioners said.

"You have to pay for what you build," said Burnie Bridge, who heads the commission. "There's more or less agreement that we do need more infrastructure."

YOUR TURN

Forums to discuss Wisconsin's energy future and the Energy 2010 report are scheduled from May 3 to June 3 in Eau Claire, La Crosse, Madison, Green Bay, Milwaukee and Stevens Point.

The Milwaukee forum is planned for 7 p.m. June 1 at Milwaukee Area Technical College, 700 W. State St.

Details can be found at psc.wi.gov/electric/cases/sea/ SEAlogoPage.htm