The cost of turning on the lights or heating a home in Wisconsin will get more expensive next year for customers with four of the state’s five largest energy providers. The only question is by how much?
Electric and natural gas rate proposals before the Public Service Commission from Alliant Energy, Madison Gas and Electric, We Energies and Xcel Energy’s Northern States Power Company request a combined $333 million increase in rates for 2024. The companies have requested an additional $92 million in rate increases for 2025.
In addition to the requested rate increases, which are driven largely by higher fuel costs as well as new solar energy plants and other capital investments, fuel surcharges also are poised to hit ratepayers’ wallets in the coming months. All told, proposed rate increases and surcharges — including a roughly $100 million charge for Alliant Energy customers alone — translate to a $500 million increase through 2025, according to information collected by state watchdog group Citizens Utility Board.
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“The utilities are asking for a lot, and it comes on the heels of significant increases that customers have already had to absorb the last few years,” CUB Executive Director Tom Content said. “We think that this is the time where commissioners really have to roll up their sleeves and think of everyday customers paying their bills when they’re making these decisions.”
The PSC is likely to decide on the rate proposals as early as November. PSC staff and groups like CUB have recommended alternative rate adjustments, which the three-member agency is expected to wade through in the coming weeks.
In the Madison area, MGE’s initial proposal sought to increase electricity rates by 3.8% and natural gas rates by 2.7% in 2024, according to CUB. The company has also requested an additional 3.5% increase in electric rates and a 1.7% increase in natural gas rates for 2025.
MGE spokesperson Steve Schultz said Wednesday lower anticipated fuel costs have resulted in adjustments to the request by MGE, which now seeks a 1.5% electric rate increase in 2024 and a roughly 1.9% increase the next year. If approved, the typical residential customer would see an approximately $3 increase on their monthly bill in 2024, Schultz added.
The request also calls for a roughly 2.3% natural gas rate increase next year, which would result in a $1.50 monthly increase to the typical customer’s bill. The company expects an approximately 1.3% rate increase in 2025.
Under the utility’s plan, the monthly electric bill for the typical user would see an average 1.2% increase from 2016 through 2025, while natural gas rates would rise by 1.4% over that time, Schultz said.
“We are sensitive to the impacts our costs have on our customers, especially our customers who struggle to meet essential needs,” Schultz said in an email. “We continue working hard to contain costs throughout the organization and manage energy affordability for our customers while advancing cleaner energy for the benefit of all our customers.”
Rate increases proposed by Alliant Energy subsidiary Wisconsin Power and Light — which provides service to much of the area outside of Madison, stretching from Plainville south to Monroe — would result in an 8.4% increase in 2024 and a 5.4% increase in 2025 for residential electric customers. Alliant has also requested a 6.3% increase in natural gas rates for 2024.
If approved, the average Alliant residential customer would see a roughly $13 monthly increase to their monthly electric bill in 2024, followed by a $5.80 increase the following year, according to Alliant Energy spokesperson Tony Palese. The average monthly bill for residential natural gas customers would increase by about $5.30 next year, Palese added.
‘Taking action now’
JP Brummond, Alliant Energy’s vice president of customer and community engagement, said the company is “taking action now in order to best manage costs, increase resiliency and build a stronger energy future.”
Some of those plans include physical and cybersecurity enhancements, infrastructure improvements and expanded community solar options for customers.
“Nobody wants to see their bills go up, including us,” Brummond said. “However, there are more costs down the road if we do nothing or simply continue ‘business as usual.’ It’s why we’re planning ahead and taking action on behalf of our customers.”
In addition to the rate increase requests coming before the commission, the agency will also take up Wisconsin Public Service’s proposal for a $28.5 million, or 2.3%, decrease in electric rates for 2024.
The company, which serves more than 770,000 electric and natural gas customers in northeast and central Wisconsin, notes in a brief filed for the case that the requested rate adjustment can be attributed to the company’s recent investments in renewable energy.
“(Wisconsin Public Service’s) incremental base rate revenue requirement reflects prudent investments in a clean energy future — investments that are already bearing fruit for customers through lower fuel costs,” according to the brief.