Milwaukee-based WEC Energy Group on Tuesday said its utility subsidiaries would seek approval from state regulators to forego potential increases to electric, natural gas and steam rates that would have gone into effect Jan. 1.
The utilities, which include Wisconsin Electric, Wisconsin Public Service and Wisconsin Gas, would have sought rate increases of 4% to 6% to recover more than $300 million in revenue deficiencies.
Instead, the utilities are seeking approval from the state Public Service Commission to apply certain balances from transmission credits, earnings sharing and cost escrow to cover a portion of the revenue deficiency.
Management at the utilities would then be responsible for covering half to two-thirds of the revenue deficiency by finding efficiencies and cost reductions.
WEC Energy Group says the plan would save customers more than $100 million compared to the likely outcome of its rate case.
The utilities do have to commit to filing their 2023-2024 base rate cases by May 1, 2022. The company says delaying its rate case by a year will better align with its planned shut-down of some coal-powered plants and investments in renewable energy.
The proposal has the backing of several stakeholder groups, including the Wisconsin Industrial Energy Group, Citizens Utility Board and Clean Wisconsin.
In reaching an agreement to support the proposal, the utilities and stakeholders noted they had a shared concern about the possibility of increasing energy costs during the pandemic.
The utilities will need to make a $4 million contribution to the Keep Wisconsin Warm Fund, which provides financial assistance to low-income individual to avoid energy emergencies. The parties will also negotiate the expansion of the utilities’ low-income payment assistance plans.
The agreement also includes a pledge to negotiate “innovative modifications” to certain industrial energy rates, no changes to the utilities’ real time pricing programs and the development of a mechanism that incentivizes Wisconsin Electric to seek price reductions in its Point Beach nuclear power purchase agreement.