In May 2015, Wisconsin Public Service Corporation requested PSC authority to increase electric rates by $96.9 million, or 9.7%, in 2016 to cover costs associated with power plant and transmission line construction projects, operation and maintenance costs, and incentive compensation costs for non-union employees. WPSC requested an authorized return on equity of 10.2%. CUB filed testimony that stated WPSC’s ROE should be reduced to 8.75%, opposed WPSC’s request to increase the monthly fixed charge for residential ratepayers from $19/month to $25/month, and contested recovery from customers of the difference between electricity market prices and a power plant’s costs (i.e., the cost of dispatching the power plant when it is not economic to do so, or “uneconomic dispatch costs”) in connection to the testing of new pollution control equipment.
In November 2015, the PSC agreed that WPSC’s requested ROE of 10.2% was too high and approved an ROE of 10%. The PSC also agreed that a $25/month fixed customer charge was not reasonable and approved a reduced fixed charge of $21/month, and limited the time period for which WPSC can collect uneconomic dispatch costs. Overall, the PSC ordered a $7 million decrease in WPSC’s electric revenues in comparison to the $97 million increase the utility sought for 2016, a swing of $104 million to the benefit of ratepayers!
In May 2015, Xcel Energy applied to the PSC requesting authority to increase electric rates by $27.4 million, or 3.9%, in 2016. Xcel also requested to increase natural gas rates by $5.9 million, or 5.0%, for costs associated with the environmental clean-up of the Ashland manufactured gas plant superfund site. Xcel also requested an authorized return on equity (ROE) of 10.2%, and authority to increase the residential monthly fixed customer charge from $8/month to $18/month, an astounding 125%.
CUB investigated Xcel’s request and filed expert testimony challenging its request for a 10.2% ROE and its request to increase the residential monthly fixed charge for energy services. CUB’s testimony recommended an 8.75% ROE and argued that the PSC should not increase residential fixed monthly customer charges. In December 2015, the PSC issued its order approving an electric rate increase of $7.6 million, or 1.08%, and a natural gas rate increase of $4.2 million, or 3.60% . The PSC did not accept Xcel's requested ROE or customer charge levels and instead approved a 10.00% ROE, and set the residential fixed customer charge at $14.00 per month.