The Wisconsin Industrial Energy Group Inc. (WIEG) was shocked by the rate increase request filed by We Energies, following We Energies’ submission of paperwork at the state Public Service Commission (PSC), requesting an additional $712 million or an overall increase of 34 percent.
By comparison, MGE of Madison filed for just under 6-percent rate increase each year.
We Energies will claim their rate increase is only 7.5 each year for 2008 and 2009. But the reason We Energies can say this is that they are assuming that over half a billion dollars from the sale of the Point Beach nuclear power plant will be approved by the PSC and returned to ratepayers.
Even a 7.5% increase each year is hard to take, as it is double the inflation rate.
We Energies’ rates for large industrial customers have grown faster than residential rates over the past decade. Industrial rates went up 31 percent from 2000-2005 and 41 percent from 1995 to 2005.
In addition, the largest industrial customers had their rates raised between 12 percent and 17 percent in the last rate hike approved in early 2006.
A rate increase of $712 million – a 34-percent increase in one year alone – is absolutely breathtaking. This would do serious damage to the business climate in Wisconsin, if approved.
Ratepayers were initially promised that if they supported We Energies’ Power-the-Future-2 (PTF-2) infrastructure program, they could expect modest increases in the 3 to 4 percent range each year. Customers were told that they might see a 27-percent increase over seven years.
Now, we might get hit that in just one year. Do you think anyone would ever sign off on a plan with a 34-percent increase in one year?
What happens next time, when we don’t have any more nuclear power plants to sell off?
Todd Stuart is the executive director of the Wisconsin Industrial Energy Group, Inc. (WIEG), a nonprofit association of 30 large energy consumers that advocates for policies that drive affordable and reliable energy. The WIEG plans to intervene in the We Energies rate case. For additional information, visit www.weig.org.
