Utility Rate Restructuring Decisions

The Wisconsin Public Service Commission (PSC) made preliminary decisions on three utility rate design cases between November 6 and Thanksgiving with final action expected before the end of the year. WPS, We Energies and MGE filed to make fundamental changes in their pricing to prepare for what they see as an increasingly competitive marketplace, one in which more customers will generate at least some of their own power from renewable sources like solar and biogas.  The PSC decisions support the utilities’ rate restructuring requests to have more of their operational and grid costs covered through larger fixed fees. Monthly fixed fees for electricity will be between 75 and 83 percent higher (Table 1) with a slight decrease in the variable rate. Any new renewable energy system owners in We Energies territory will be charged to use the grid and paid less for the energy they generate in excess of what they use and place back on the grid.

Overall, the average cost increase for both electricity and gas to homeowners and small businesses is estimated between 1.5 to 3.5 percent higher and to large volume users from four percent higher to none. However, the rate redesign reduces the amount of the bill in a customer’s control to save money and impacts low energy users’ costs most.  Expert testimony opposing the restructuring by the Environmental Law and Policy Center, RENEW Wisconsin and Citizens’ Utility Board maintained that the rate redesign will reduce price incentives to lower fossil fuel use and cause longer payback times and market disincentives for investments in energy efficiency and renewable energy. There were 3,555 public comments on the rate redesign cases, and, according to a RENEW Wisconsin analysis, 90 percent urged the PSC to reject the utility proposals.

Table 1. Rate Restructuring: Changes to Fixed Charges for electricity and natural gas
Utility     Electricity New (Prior)       Gas New (Prior)               Total Fixed Charges New (Prior)
WPS       $19 ($10.40)                        $18 ($10.25)                      $29.25 ($20.65)
We          $16 ($9.13)                          $10.03 ($9.43)                   $26.03 ($18.56)
MGE       $19 ($10.50)                        $21.87 ($12.11)                 $40.87 ($22.61)

Renewable Energy Decisions
In We Energies territory, impacting 40 percent of the state, owners that install renewable energy systems on their properties will have to pay the utility a monthly charge of $3.79 per kilowatt (kW) per month (based on system size) or $182 annually for the average 4kW solar PV system. We Energies customers with existing systems are grandfathered from these new fees for 10 years. Additionally, the amount the utility will reimburse all renewable energy generators for clean energy they add to the grid above what they use was decreased from $0.14 per kWh to $0.03 per kWh to be measured monthly (rather than annually). Existing MGE customers with renewable energy systems will be exempted from the fixed rate increases for 12 years. On another point, the PSC rejected We Energies’ proposal to bar customers from leasing their panels from solar power developers in order to connect to the grid.

The PSC decisions can be challenged in state circuit court up to 30 days after the final ruling. To read more Green Bay PGJSWSJ