Apr 15 - McClatchy-Tribune Regional News - Thomas Content Milwaukee Journal Sentinel

April 15 is time to pay up in more than one way this year.

Electric rates for We Energies customers will rise beginning with bills sent out today, after the Public Service Commission authorized a $79 million increase to recoup rising fuel costs.

For the average residential customer, the second rate boost in three months will amount to 2.6%, or $2.24 a month. Industrial customers face an even heftier surcharge of 3.6%, the utility estimated.

The increase comes three months after We Energies raised prices by more than 3%.

Prices for natural gas and diesel fuel have increased sharply since the beginning of the year -- increases that weren't foreseen when the PSC was setting rates in January.

The utility is facing surcharges from railroad companies that ship coal to We Energies power plants from mines in Wyoming's Powder River Basin.

The price of diesel, which hit a record of nearly $4.10 a gallon in Milwaukee on Monday, is up 21% so far this year, according to the Energy Information Administration.

"The final decision for our rate case was in January, and we really saw the spike for both diesel and natural gas after that point," said utility spokesman Brian Manthey.

During its meeting late last week, Public Service Commission Chairman Dan Ebert said he wasn't convinced that the utility had justified everything it sought in its request, but noted that the increase is subject to refund -- with interest -- if a PSC audit finds the utility didn't deserve that much of an increase.

Several items sought by We Energies seem to be more relevant to a traditional rate increase request rather than this one, which is supposed to be limited to fuel costs only, Ebert said.

He said concerns raised by the Wisconsin Industrial Energy Group and Mequon-based Charter Manufacturing Co. would be addressed during the commission's audit this year.

A public hearing on the increase will also be scheduled at a later date, Ebert said.

For residential customers, the $2.24-a-month jump comes after a more than $4 increase in January.

The typical residential customer, someone using 750 kilowatt-hours of electricity a month, will now pay more than $88 a month.

The earlier increase was authorized to fund construction of new power plants, the wind farm that recently began generating power in Fond du Lac County, and other projects. That rate increase will boost residential bills again by nearly $4 a month, beginning in January 2009.

The latest boost, coming so soon after January's, will make it tougher for people to make ends meet during challenging economic times, said state Rep. Leon Young (D-Milwaukee) in a letter to the commission.

"Enough is enough," he wrote. "The beleaguered customers of We Energies deserve a full reprieve, at least this time around."

Manthey said the utility couldn't help the timing of its request for an increase, as natural gas price futures jumped 30% since mid-December.

The increase is subject to a potential refund later, he said. Utility customers were refunded $29 million in 2006 and $10 million in early 2007 when natural gas prices fell below the company's forecasts.

The state's largest utility, We Energies has 1.1 million electricity customers.