We Energies' revised electric rate proposal shifts more costs to residential customers, while cutting industrial rate hike
Karl EbertResidential electric bills could go up more than expected in southeast Wisconsin next year under a new rate proposal submitted this week by We Energies.
The company is now seeking a 13% increase in the rate for its residential customers pay for electricity, according to a recent filing in its rate case before the Public Service Commission of Wisconsin. The $14.61 per month increase is more than double the utility's initial request of $6 a month. It would increase the average residential electric bill $175 a year.
That increase is paired in the filing with a nearly 50% reduction in the proposed rate for large industrial customers. We Energies' biggest customers would see an annual increase of 6.4% under the new proposal.
We Energies spokesman Brendan Conway said the proposed allocation of how much each class of customer pays is consistent with previous commission decisions. In its filing, the company called the initial proposal for residential rates "artificially low." Rising costs and worsening economic conditions required it to change its proposed rates, the company said.
Tom Content, executive director of the Citizens Utility Board, said We Energies initially said it wanted to limit the impact of rising costs on residential customers. Its new approach "is really pulling the rug out from under the homeowners and renters," he said.
"Whatever concern they had about affordability for residential and small business customers has gone out the window," Content said.
Related:How a Milwaukee neighborhood organization is trying to change the debate on electric, gas rates in southeast Wisconsin
Concerns about affordability and the unequal impact of rising rates on low-income households let Walnut Way, a Milwaukee organization representing the Lindsay Heights neighborhood, to take the unusual step of becoming an intervenor in the rate case. Walnut Way is seeking a wholescale revamping of We Energies' residential rate structure to reduce the outsized burden of utility bills on low-income homeowners and renters by limiting utility bills to no more than 6% of household income.
In a partial settlement with the majority of the intervenors, We Energies agreed to "informal" meetings with Walnut Way and other groups to discuss an ability-to-pay pilot program after the rate case is settled. Walnut Way did not sign on to the settlement − executive director Antonio Butts argued that it does nothing to help low-income people who have been stuck in pattens of disconnection for non-payment and reconnection, and are now struggling with rising costs due to inflation.
Walnut Way also was among the organizers of a protest against rising energy costs on Saturday at We Energies' downtown Milwaukee headquarters.
We Energies' request for residential natural gas rates also ticked up from a $5.94 per month increase for Milwaukee-area customers served by Wisconsin Gas to $6.72. Wisconsin Electric Gas customers’ monthly bills would increase $7.71 a month, compared to an initial request of $6.39 a month. The revised rate requests represent increases of 10.7% and 13%, respectively.
Those increases are included in a projection that winter heating bills will be up as much as 30% this year. The additional increase is driven by a spike in the cost of natural gas, the company said.
We Energies is not seeking to change its 10% return on equity, or the profit it makes after expenses. However, CUB is asking the PSC to reduce it to 9%, a reduction of about $100 million in profits that Content said would be "a really sizeable cut to the size of the increase."
The PSC is expected to set the company's 2023 rates and return on equity by the end of the year. The case will remain open for 2024.
In-person public hearings have been scheduled for Nov. 3 at 2 p.m. and 6 p.m. at the Washington Park Senior Center, 4420 W. Vliet St.
Contact Karl Ebert at kebert@gannett.com. Follow him on Twitter at @karlwebert.