According to the Milwaukee Journal Sentinel, a utility bill relief program for low-income households could soon be put to the test in Wisconsin. Organizations that advocate for utility customers are working with WEC Energy Group, a large investor-owned electric utility, to develop a pilot program that would cap utility costs at six percent of household income for qualifying families. WEC subsidiaries provide electric and natural gas service to most of southeastern Wisconsin, including Milwaukee and surrounding communities.
The ability-to-pay proposal comes after increased electric and gas rates were approved last year by the Public Service Commission of Wisconsin (PSC), the state’s utility regulator. The higher rates took effect at the beginning of 2023. Now, the state’s major utilities are requesting further increases for 2024 and 2025.
During PSC proceedings last year, several groups raised concerns about affordability in the face of rising rates. The organizations argued at the time that the proposed rate increases, including for WEC customers, were excessive and imposed an unfair burden on low-income households. Base rates increased by 9 to 11 percent for most utilities from 2022 to 2023, not including additional fuel costs during winter months.
The PSC approved last year’s rate increases and ordered WEC to meet with intervenors on utility affordability outside of the rate case process. Intervenors in this process include the Citizens Utility Board (CUB), Wisconsin Industrial Energy Group (WIEG), the Sierra Club environmental organization, and Walnut Way Conservation Corporation, a community agency in Milwaukee’s Lindsay Park neighborhood. CUB and WIEG advocate on behalf of residential and industrial utility customers, respectively. Two public hearings on this issue will be held in Milwaukee on June 14.
A Sierra Club study concluded that residents of Milwaukee’s poorest neighborhoods spend an average of 12.8 percent of their income on utility bills, and an average of 19 percent in Lindsay Park. Low-income households in other urban, rural, and tribal areas in Wisconsin also have utility bills amounting to 10 percent or more of household income.
In a recent interview, CUB director Tom Content said the state’s investor-owned utilities are seeking to raise profit rates and shareholder returns above the national average. Utilities have argued that the rate increases are necessary to recover increased costs and to finance the development of renewable energy projects.
The concept of a “percentage-of-income payment plan” is offered by some utilities in nearby states, including Illinois, Michigan, Minnesota, and Ohio. Xcel Energy currently offers ability-to-pay plans to its Minnesota and Colorado customers and has proposed to the PSC a four percent income cap for qualifying Wisconsin customers.