2013 was a very busy and successful year for CUB’s work protecting ratepayers. CUB intervened in 30 cases before the Public Service Commission, many in which utilities were seeking to raise electric rates or to receive approval for multi-million dollar construction projects.
Significantly, CUB helped save Wisconsin electricity ratepayers $107 million on their utility bills through our strong advocacy on behalf of residential, farm, and small business customers. The PSC accepted many of CUB’s arguments against utility requests to raise rates, and for the need to closely monitor and control the costs of utility construction projects.
Below are summaries of a select sample of cases CUB intervened in before the PSC in 2013. Each case is identified by a “docket number,” which is included in the title of each case summary. You can view most of the documents submitted in each case, including CUB’s expert testimony and legal briefs, by entering the docket number on the PSC’s website, http://psc.wi.gov
In March 2013, WPS requested authorization from the Public Service Commission to raise electric and natural gas rates starting January 1, 2014. WPS requested a $75.9 million, or 7.7 percent electric rate increase, and a $21.2 million, or 6.5 percent natural gas rate increase.
CUB intervened in the case and provided expert testimony in opposition to WPS’ requested profit level, proposed increase of residential electric rates, and continuation of its electric and gas decoupling or true-up mechanism. CUB also opposed the utility’s request for ratepayers to pay for executive and non-executive employee incentive compensation packages.
CUB intervened in this case and investigated the cost overruns of $182 million for the two new coal-fired power plants at Oak Creek, which cost over $2.3 billion to build. CUB also raised questions about the Valley Power Plant, a two-unit coal-fired power plant that produces electricity and steam for downtown Milwaukee customers. Not only does the Valley plant pollute nearby neighborhoods with toxic emissions, the plant is very expensive to run, and the rates paid by steam customers are heavily subsidized by electric customers.
In December 2013, the Commission ordered a $12.8 million electric rate decrease, or -1.32 percent, and a $4.0 million natural gas rate increase, or 1.23 percent. The Commission’s decision results in nearly a $90 million savings to WPS customers on electric rates in 2014.
We Energies Fuel Cost Case for 2014 (6630-FR-104)
PSC orders $35.7 million decrease
In July 2013, We Energies requested authorization from the Public Service Commission to decrease electric fuel costs by $30.4 million beginning January 1, 2014. CUB intervened in the case to argue that ratepayers should receive at least an additional $5.1 million from a settlement We Energies entered into with the Department of Energy regarding the federal government’s failure to begin removing spent nuclear fuel from the Point Beach Nuclear Power Plant in 1998.
CUB noted that We Energies spent $13.6 million to achieve a settlement of $45.5 million while Xcel Energy spent $8.5 million to reach a settlement of $182 million with the DOE for failure to remove spent fuel. CUB argued that the Commission should order We Energies to refund $5.1 million more of the settlement funds to ratepayers because it mismanaged its litigation costs, as borne out by Xcel’s much greater success on behalf of its customers for significantly less cost.
The Commission determined there was not enough evidence in the record to reduce the amount of We Energies’ legal fees associated with the nuclear waste settlement. However, the Commission noted that future utility litigation expenses would be closely monitored. The Commission authorized a $35.7 million decrease in fuel costs for 2014.
Milwaukee Water Works, Economic Development Rates (3720-WI-102)
No subsidies for large customers
In February 2011, the Public Service Commission approved an economic development rate for Milwaukee Water Works, the water utility that serves the Milwaukee area. The EDR allowed the Water Works to provide special rate discounts on water service to companies that expanded their Milwaukee businesses or moved to Milwaukee from out-of-state. CUB has long opposed EDR’s because they often force residential and small business utility customers to pay higher rates to cover the discounts and subsidies given to large customers.
Because no businesses had subscribed to the EDR by spring of 2012, the Commission wanted to increase the EDR incentives. However, the City of Milwaukee wanted to stop the EDR rate offering. The Commission held a hearing on the matter in the spring of 2013. CUB intervened in support of the City’s effort to stop offering the EDR and fought to ensure that the Commission adhered to its legal process requirements regarding record evidence and hearings.
The result was that there was no support on the record for continuing the EDR, and the Commission issued an order allowing the discounted rate offer to expire in July 2013.
In June 2013, Alliant filed a request with the Public Service Commission for authorization to continue the “Shared Savings” energy efficiency program, which provided commercial and industrial customers with low-cost financing to make their facilities more energy efficient. Focus on Energy, the state-wide energy efficiency and renewable energy program, offers a similar program but provides grants rather than financing.
CUB intervened in the case and submitted comments to the Commission expressing concerns with the cost-effectiveness and value of Alliant’s program given its decline in usage since Focus launched its similar program. CUB requested that an analysis of Alliant’s cost-effectiveness methods and assumptions be completed before the Commission decided on the continuation of the Shared Savings program.
At an August 2013, Open Meeting the Commission expressed reservations about the costs and benefits of the Shared Saving program and directed the utility to work with Commission staff to address the concerns. In October 2013, Alliant informed the Commission that it was withdrawing its application to renew the Shared Savings program and that the program would be discontinued as of December 31, 2013.
Alliant Energy Fuel Cost Case for 2014 (6680-FR-106)
PSC agrees with CUB, orders refund
In July 2013, Alliant requested authorization from the Public Service Commission to increase electric rates by $30.6 million, or 3.1 percent, to pay for power plant fuel costs in 2014. Alliant also proposed to offset the $30.6 million rate increase by netting against it $11.6 million of over-collected fuel costs from 2012. CUB opposed Alliant’s proposal because it would delay the return to ratepayers of a significant amount of over-collected fuel costs. The Commission agreed with CUB’s position and ordered Alliant to return the 2012 over-collected fuel costs to ratepayers as soon as possible. Furthermore, the Commission reduced Alliant’s proposed rate hike for 2014 by $11.2 million.
In June 2013, Xcel Energy requested authorization from the Public Service Commission to raise electric rates by $40 million, or 6.5 percent, and natural gas rates by $4.7 million, or 3.5 percent, starting January 1, 2014.
CUB intervened in the case and filed expert testimony in opposition to Xcel’s proposed increase of residential electric rates. CUB also opposed Xcel’s requested profit level, request for ratepayers to pay for employee incentive compensation packages, and collection of cost overruns associated with the Monticello power plant uprate project.
In December 2013, the Commission ordered a $19.5 million electric rate increase, or 3.11 percent, and no change to natural gas rates. The Commission’s decision results in a $20.5 million savings to Xcel’s customers on electric bills, and a $4.7 million savings on natural gas bills in comparison to what the utility requested.