Wisconsin utility proposes rate hikes for residential customers, but trims C&I bills

Dive Brief:

  • Alliant Energy has filed a residential rate increase with the Wisconsin Public Service Commission, requesting a 1.1% increase in electric revenues, or $12.9 million, alongside a 12.9% increase in natural gas revenues ($9.2 million), the Milwaukee Wisconsin Journal-Setinel reports. 
  • The utility is also proposing a slight rate decrease for commercial and industrial customers.It is Alliant's first retail electric and natural gas base rate request since 2010.
  • The largest impact could come in the form of increased monthly fixed charges for residential customers, which will more than double over several years, from $7.67, to $12 in 2017 and $18 in 2018.

Dive Insight:

Wisconsin utilities are notorious for requesting hikes in fixed fees, and this year appears no different as one utility looks to double fixed charges on customers' bills by 2018. 

A bevy of proposals in 2014 set the precedent for ongoing debates over fixed charges in Wisconsin today. We Energies was granted a 75% monthly fixed charge increase for residential customers in 2014, and this was followed by the PSC approving a proposed fixed charge increase from Madison Gas & Electric, which boosted the monthly charges 85% from $10.29 to $19. Now it appears Alliant is jumping on the bandwagon. 

Alliant said the need for environmental upgrades at two Wisconsin coal-fired plants has spurred Alliant's rate request, adding that its rates will remain competitive and it has been searching for ways to avoid such increases.

“We’ve kept our eye on costs and taken a thoughtful approach to investing,”John Larsen, president of Alliant Energy’s Wisconsin utility, said in a statement. “This energy rate adjustment maintains competitive rates while allowing us to continue on a path to cleaner and more reliable energy.”

Alliant said the increases would fund improvements in its Wisconsin electric and natural gas systems, including improvements at the Columbia Energy Center and Edgewater Generating Station, additional safety and reliability investments, and expansion of pipeline infrastructure.

The utility said its electric cost increases are partially offset by reductions in projected fuel costs for next year.

Alliant said an average residential customer using 700 KWh/month would see a phased-in increase of 4.7%, or $4.39/month by 2018. Bill impact includes an increase in the fixed charge, though Alliant pointed out that its residential fixed charge has been in the $5-$8 range since 1995.

"Commercial and industrial rates would decrease slightly," the company added.

The Journal-Setinel reports that consumer group Citizens utility Board will analyze the fairness of boosting fixed charges on residential bills while simultaneously trimming C&I bills. Solar advocates have long worried that these increased fixed charges will hurt the nascent solar market. 

The utility is also offering a new set of pricing plans, including cheaper nights and weekend power, a fixed-bill option, and a green energy option, "Second Nature." The clean energy plan would also be offered at a lower cost, dropping from $0.02/KWh to $0.014/KWh, Alliant said.

The utility is proposing a retail electric and gas rate base of $3 billion in 2017 and $3.1 billion in 2018.

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Filed Under: Transmission & Distribution