Xcel seeks fixed fee hike for Wisconsin customers

Dive Brief:

  • Xcel Energy will ask Wisconsin regulators for a 3.9% increase in electricity revenues and a 5% increase in natural gas revenues for 2016. That, the utility says, amounts $4.73 per month increase for the typical residential electricity customer.
  • Xcel’s proposed change for residential, farm and small commercial electricity customers will come through a flat fee increase from $8 per month to $18 per month, the Lacrosse Tribune reports. It will be paired with a $0.007 per kWh reduction in the average rate.
  • Ratepayer advocates say the increased flat fee unfairly penalizes low volume electricity users because they get less benefit from the per-kWh reduction and the fixed fee increase is a bigger part of their bill. Xcel says the cost shift will add less than $7 per month to most customers, though 25% will have bills go up 10% or more.

Dive Insight:

The shift of utility costs to fixed fees also eliminates a driver for energy efficiency or for investments in distributed generation like rooftop solar, critics say. Savings from both would come through per-kWh savings, which are reduced by the Xcel plan.

“It encourages increasing consumption, which raises costs for everybody in the long run,” Citizens Utility Board Executive Director Kira Loehr told the Tribune.

Since 2001, Xcel's average inflation-adjusted customer bill increased approximately 25%. Xcel defended its current request for a rate increase for the 7th consecutive year by insisting the fixed charges cover transmission and distribution system operations and maintenance costs and should be equitably shared by ratepayers.

Xcel’s fixed fee proposal follows similar fixed charge increases granted by Wisconsin regulators last year to We Energies, Madison Gas & Electric, and Wisconsin Public Service.

The $27.4 million in electricity revenues and $5.9 million in gas revenues will go to investments in generation and infrastructure.

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