We Energies proposes back-to-back rate increases

 

By Thomas Content of the Journal Sentinel

March 23, 2012

 

A one-year break from rate hikes could be nearing the end for We Energies customers: The state's largest utility on Friday filed a two-year plan that seeks $137 million.

 

The utility wants back-to-back increases of 3.6% in 2013 and 2014, increases that mean rates will continue to outpace the cost of living. The Consumer Price Index is forecast to rise by 2.2% and 2.3% in those years, according to the Federal Reserve Bank of Philadelphia. Rising fuel costs and the addition of new power plants led utility rates to outpace inflation since 2000, with rates up 72%, or nearly twice the rate of inflation. The main drivers of the latest
increase are environmental control and energy generation projects, We Energies said. The company almost has finished an air quality control upgrade at the original Oak Creek power plant that, at nearly $900 million, is the second-most expensive project in the company's history. We Energies also will seek to bill customers for costs associated with the Glacier Hills Wind Park and cost overruns for the new coal plant in Oak Creek due to litigation, construction
delays and other factors. The final cost of that project came in at $2.3 billion. That's about 3% higher than a cost cap imposed on the project by
the state Public Service Commission.

 

The PSC has final say over the We Energies rate request. A typical We Energies electric customer using 750 kilowatt-hours of electricity per month pays about $104.90 a month. The utility hasn't yet spelled out whether residential and business customers would see increases higher or lower than 3.6%. At 3.6%, the increase would add about $4 a month for a typical residential customer beginning in January. The 2014 increase would be another $4.

 

Also Friday, Madison Gas & Electric Co. proposed a $22.5 million electricity rate hike for 2013, which would increase electricity costs by 5.8%. MG&E is a part owner of the Oak Creek powerplant and wants its customers to pay for higher costs linked to the project as well as pollution controls being installed at a power plant near Portage, spokesman Steve Kraus said. A break in 2012 We Energies customers have seen rates rise over the past decade to pay for new power plants, transmission lines and higher fuel costs. Customers won a break from an increase in 2012 when We Energies proposed to delay asking for an increase for a year.