CUB Victories
CUB Wins!
2006
Legislative Victories
SB459/Act 141
Smart Energy bill signed into law
On March 17 2006, the Smart Energy bill (SB459) was signed into law by Wisconsin Governor Jim Doyle as Wisconsin 2005 Act 141. Act 141 will strengthen Wisconsin's statewide energy efficiency program known as Focus on Energy. Over the past several years nearly $100 million has been diverted from Focus on Energy to reduce the state's budget deficit, even though these funds were collected from utility ratepayers specifically for energy efficiency efforts. These budget raids created an unfair tax on utility customers. Act 141 will protect the funds for Focus on Energy, which means that Wisconsin citizens can receive all the benefits of making our homes and businesses more energy efficient: Each dollar invested in energy efficiency returns nearly 6 dollars to Wisconsin in economic and environmental benefits.
This is a tremendous victory for Wisconsin ratepayers and environment. CUB's top legislative priority was to pass SB 459, the energy bill based on the recommendations from Governor Doyle's Task Force on Energy Efficiency and Renewables, on which CUB participated. This important piece of legislation is a critical component to a strong and stable energy future in Wisconsin.
CUB commends the Governor and all the state Legislators who worked to make Act 141 law.
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SB 518
Bad bill dies in session
CUB fought to protect consumers' right to seek refunds by opposing SB 518 is a bill that would have reduced significantly Wisconsin consumers' rights to seek refunds of sales taxes wrongfully collected by retailers. (The identical bill in the Assembly was AB 968). The bill applied to any class action lawsuit seeking any tax refunds. It would require consumers who were charged an incorrect amount of sales tax to apply for a refund with the State Department of Revenue (DOR) rather than with the seller. The bill also prohibited class action lawsuits against the state or any other party if the suit includes the refund of any tax administered by the state.
The portions of SB 518 that applies to class actions were retroactive; that is, they applied not only to lawsuits filed in the future, but to all currently pending class action lawsuits. It would also prohibit consumers from filing class actions that may be their only recourse for collecting refunds that are owed them. Under current state law, businesses, not customers, are responsible for collecting and paying the right amount of sales tax to the state. If a customer wants to challenge the amount of sales tax, he or she can address the concern in a variety of ways, including making a claim directly against the business that overcharged the consumer or by participating in a class action lawsuit.
If a consumer has a large claim and the time and resources to pursue it, filing a claim with the DOR might be a feasible option. However, most consumers that are overcharged for sales taxes have small claims, and are unlikely to invest the time to pursue them. Class action lawsuits are more efficient for both the consumer and the DOR because they streamline the process. Rather than dealing with hundreds of smaller claims, both sides can address all of the claims at one time.
SB 518 died in the waning days of the 2005-2006 legislative session.
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Regulatory Victories
WPL Rate Case (6680-UR-115)
CUB helps ratepayers save $15 million
Wisconsin Power & Light (WPL) applied to the PSC to increase gas and electric rates by $95.6 million. Later in the year, WPL revised its request and increased its electric utility rate request to $164.7 million.
During the case, CUB's expert witness argued that WPL was overestimating the costs for fuel for 2007. The PSC agreed with CUB and reduced WPL's request by $1.5 million. CUB also argued that WPL should earn a rate of return (profit) of no more than 10.4% (WPL asked for 11.5%). The PSC approved a profit rate of 10.8%, saving ratepayers $7 million. The PSC also supported CUB's recommendation to exclude an imputation of $119 million in the capital structure for new power plants built in Sheboygan Falls in 2005, saving ratepayers $8 million.
In early 2007, the PSC authorized WPL an electric rate increase of $36.2 million, and a $1.9 million decrease for natural gas. CUB's efforts helped save WPL ratepayers at least $15 million.
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PSC Rejects Special Rates for ERCO Worldwide
CUB helps save ratepayers $23 million over 10 years
ERCO Worldwide owns a chemical manufacturing plant in Port Edwards and buys electricity from WPL. As a part of the WPL rate case for 2007 (see above) ERCO was asking for lower electricity rates so that they could invest in equipment that would reduce emissions of mercury from its Port Edwards facility. ERCO asked the PSC to approve a special contract with WPL to lock in a low electric rate that would only increase 4 percent per year, whereas ERCO's electricity rates have increased on average 10% per year since 1997. This contract would have forced WPL's residential and business customers to subsidize ERCO.
Also in this proceeding, WPL had asked the PSC to approve a special electricity rate for ERCO that would force other WPL customers to subsidize ERCO by at least $23 million over the next ten years. CUB argued that the requests for special electricity rates for ERCO would not only be illegal, but if granted, it would set a bad precedent that would encourage other companies to look for handouts from ratepayers. CUB argued that it was the responsibility of ERCO's shareholders to pay for pollution control equipment, and there is no legal basis for WPL's customers to pay for those costs.
The PSC voted unanimously to deny ERCO's request for a special utility rate and also denied WPL's proposed multi-million subsidization of ERCO. CUB appreciates the PSC's decision to defend 100-year-old principles of utility regulation that protect ratepayers from discriminatory deal making between utilities and powerful companies.
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WPS Rate Case (6690-UR-118)
CUB helps ratepayers save $10 million
Wisconsin Public Service Corp. (WPS) applied to the PSC to increase gas and electric rates by $155.5 million.
WPS proposed to forego a rate increase in 2008 if the PSC agreed to allow WPS to implement a two-year pilot "revenue stabilization mechanism" (RSM). CUB argued that the PSC should reject the use of this mechanism unless WPS implemented energy efficiency programs to encourage customers to save energy, which WPS was not willing to do. CUB also argued against the RSM because it could allow WPS to receive profits as high as 16.6%. The PSC agreed with CUB and denied WPS's request to use the new pricing mechanism. Had this mechanism been approved, WPS could have earned excess revenues of $68 million.
The PSC concluded the case and authorized a $56.7 million increase for WPS electric operations, a 6.6% increase, and an $18.9 million rate increase for natural gas, a 3.8% increase. CUB's efforts helped reduce WPS's rates by at least $10 million.
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Court Victory
CUB vs. WPL
Court sides with CUB; upholds prohibition of "retroactive rate making"
CUB sided with the PSC in a suit brought against the Commission by Wisconsin Power & Light (WPL) regarding interpretation of the fuel rules. WPL took the PSC to court when the PSC denied the utility a rate increase based on increases in fuel costs associated with the shutdown of the Kewaunee Nuclear Power Plant. The PSC originally ruled that to have granted the increase would have violated the long-stranding prohibition against retroactive rate making. WPL sought to have the PSC decision overturned. CUB entered the case in support of the PSC position. The courts sided with CUB and the PSC and ruled against WPL.
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2005
WPS Rate Case (6690-UR-117)
CUB helps save ratepayers $70 million
WPS applied to the PSC to increase electric and gas rates by $157 million. CUB fought WPS's request on several fronts including: cost of service and rate design, WPS mismanagement of the Kewaunee Nuclear Power Plant resulting in a 5 month shutdown, and the immediate return of the nuclear power plant decommissioning funds following the sale of the plant.
The PSC approved a rate increase of $87 million for WPS electric and gas services for 2006. The PSC agreed with CUB's argument that the $107 million Kewaunee decommissioning fund should be refunded to ratepayers over 2006 and 2007 rather than over the 5 year period requested by WPS.
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WPL Rate Case (6680-UR-114)
CUB helps save ratepayers $44.7 million
WPL applied to the PSC to increase electric and gas rates by $63.2 million. CUB argued for a more reasonable rate allocation across customer classes (residential, commercial, industrial), rate designs to create incentives for energy efficiency, and the impact of rate increases on low income customers, and WPL's request to disconnect certain residential customers during the winter moratorium period. CUB also argued for the immediate return to customers of $83 million in Kewaunee nuclear plant decommissioning funds following the sale of the plant.
The PSC authorized an $18.5 million rate increase for electric and gas utility services, and decided to use $56 million in Kewaunee decommissioning funds over the next two years to reduce WPL's revenue requirements.
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WEPCO Rate Case (05-UR-102)
CUB helps save ratepayers $20 million
WEPCO applied to the PSC to increase electric and gas rates by $308 million. CUB filed testimony arguing for a lower rate of return, lower fuel costs, and for residential ratepayer protection from excessive rate increases. CUB also argued for an independent review of WEPCO's renewable energy program.
The PSC approved CUB's position for an independent review of WEPCO's renewable energy program and authorized a $288 million increase.
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NSP Rate Case (4220-UR-114)
CUB helps save ratepayers $6 million
NSP applied to the PSC to increase electric and gas rates by $51.2 million, their first request for a rate increase (beyond fuel cost increases) since 1998. CUB argued for reductions in NSP's return on equity, equity levels, and the residential customer portion in the increase.
In authorizing a $43 million increase, the PSC agreed with CUB and lowered the requested return on equity and ordered NSP to work with PSC staff to develop goals for NSP's load management programs.
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2004
WEPCO Rate Case (05-UR-101)
CUB saves ratespayers $15 million and an additional $1 million per year!
Wisconsin Electric Power Company (WEPCO) applied to the PSC to increase electric rates by $85 million for the ongoing construction costs of the two 545-megawatt gas plants at Port Washington, and unit 1 of the Oak Creek coal plant. Based on CUB's intervention, WEPCO reduced its request by $15 million. CUB also saved ratepayers approximately $1 million per year by arguing for a different cost allocation method. The PSC approved a $54 million electric rate increase.
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WP&L Fuel Cost Case (6680-UR-113)
Ratepayers save $11 million!
Wisconsin Power and Light (WP&L) applied to the PSC to raise electric rates by $21 million to cover projected increases in natural gas costs and the cost of purchasing power due to power plant shutdowns. The PSC approved a $10 million increase.
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WPS/WP&L Nuke Plant Sale (05-EI-136)
CUB initially stops sale -- is suing to overturn PSC flip flop
Wisconsin Public Service (WPS) and WP&L applied for permission to sell the Kewaunee Nuclear Power Plant to a subsidiary of Dominion Resources, an unregulated, out-of-state energy company. CUB argued that the sale would result in a lack of public oversite of a nuclear power plant located in Wisconsin, thereby greatly increasing risks to Wisconsin's environment and economy. The PSC originally agreed with CUB and disallowed the sale, only to reverse its decision in March 2005.
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WP&L Winter Disconnect Proposal (6680-EI-111)
WPL shutoff denied!
WP&L requested authorization to implement a mid-winter disconnection program for customers who do not pay their energy bill. CUB argued that the existing procedures for dealing with late payments were sufficient and that mid-winter shut-offs would put lives at risk. The PSC agreed with CUB and denied WP&L's request.
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