The Wisconsin Public Service Commission (PSC) has rejected a proposal by the Citizens Utility Board (CUB) to impose a new utility rate structure that would have increased steam rates for downtown Milwaukee customers by more than 60 percent over the next five years.
The ruling was a key win for employers in the heart of the southeastern Wisconsin economy according to Tim Sheehy, president of the Metropolitan Milwaukee Association of Commerce (MMAC).
“The massive rate hikes proposed by CUB would have had a serious negative impact on both residential and business customers in downtown Milwaukee,” said Sheehy. “Making the heart of Milwaukee a high-cost island would have had a chilling effect on our regional economic competitiveness.”
CUB had sought a new rate structure that would have shifted a greater portion of the cost for operating We Energies’ Menomonee Valley Power Plant onto the backs of downtown steam customers. The CUB proposal before the commission would have resulted in a net steam rate increase of 60.67 percent for downtown Milwaukee customers by 2017.
The MMAC led a group of downtown steam users including Marquette University, Northwestern Mutual Life Insurance Co. Inc. and Aurora Healthcare in an effort to intervene at the PSC to block this proposed change.
The coalition argued that the CUB proposal would have a significant and disproportionately negative impact on downtown steam users while providing nearly no significant cost reductions for electric customers. The group feared the rate shock would drive businesses out of downtown or off the steam grid, reducing the number of customers sharing the cost of the system and thereby increasing the cost burden of the new rate structure even further.
Sheehy gave the PSC credit for giving the issue careful review and coming to the best decision for the broadest segment of utility customers.
