We Energies customers to get another jolt
Mar 25 - McClatchy-Tribune Regional News - Thomas Content Milwaukee
Journal Sentinel
By the end of the week, the typical We Energies customer will be paying
more than $99 a month for electricity.
The state Public Service Commission approved a $48.1 million rate
increase on Wednesday that will tack another 2 percent onto the 7
percent increase customers saw added to their bills in January.
We Energies' 1.1 million customers will see their bills rise as soon as
Friday.
For the typical residential customer using 750 kilowatt-hours of power a
month, bills went up about $6 in January and will increase by another
$1.88, the utility is projecting. That will bring the typical monthly
electric bill to $99.32.
Of the five investor-owned utilities in the state, We Energies
has the second-highest electric rates for residential customers. But
even with the latest increase, the utility's rates remain below the
national average, a utility spokesman said Tuesday.
Some utility customers say they are surprised to see the increase given
that natural gas prices are so low. The futures price of natural gas
fell again Wednesday on the New York Mercantile Exchange to $4.10 per
million British thermal units. It has declined 26 percent this year,
Bloomberg News reported.
"I'm always a little skeptical. In my opinion, much of the price
increases and the costs that comprise our bill are just hidden," said
ratepayer Tom Derse of Milwaukee. "We don't know what the real reason
is."
The rate case voted on Wednesday is a fuel-cost adjustment that was
triggered because fuel costs in January and February ran higher than
forecasts, utility spokesman Brian Manthey said.
We Energies' fuel costs for 2010 are projected to be at least 2 percent
higher than the Public Service Commission had forecast in November, when
the PSC set utility rates for this year and 2011. That's the threshold
at which the utility is allowed to seek a surcharge.
When fuel prices dropped in early 2009, We Energies issued a refund to
customers and then reduced rates by 2 percent, Manthey added.
The utility has warned investors to expect its 2010 earnings to be lower
because the company hasn't fully collected the fuel costs it's paying.
The company projects it will take in $18 million to $22 million less
from customers than it will pay for fuel this year, Manthey said.
The utility's parent company is still forecasting record earnings in
2010. Wisconsin Energy has said profit will rise by at least 15 percent
this year, in the range of $3.65 to $3.75 a share.
The company reported 2009 profit from continuing operations of $377
million, or $3.20 a share, up 5 percent from 2008. It attributed the
gains to cost-cutting and productivity improvements.
Factors in the latest rate increase include the price of natural gas
used in power plants and the price of electricity bought in the Midwest
wholesale market as well as the timing of power plant outages and rising
coal costs, the utility said.
Commissioners Mark Meyer and Lauren Azar said the increase is subject to
refund, with interest, if the utility ends up collecting too much money
for fuel.
The commission's staff will now conduct an audit of the utility's
numbers and issue a final decision later this year that could adjust
bills again.
The increase that hit We Energies customers in January was linked to
costs for new power plants, power lines and employee pension costs.
In 2011, electric bills are already scheduled to rise again under the
two-year rate plan the commission approved last fall. The rate plan
wasn't as big as We Energies sought but will still boost 2011 bills by
more than $4.50 a month for the typical residential customer.
The 2011 increase will occur because customer bill credits linked to the
2007 sale of the Point Beach nuclear plant will be gone.
The electric rate increase comes as the utility's natural gas customers
are seeing savings on winter heating costs. Compared with last winter,
heating costs are projected to drop 20 percent during the six-month
heating season that ends April 30.
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