MGE Cases

Madison Gas & Electric
Rate Case for 2008 & 2009 Rates
Docket 3270-UR-115

On May 7, 2007, MGE applied to the Commission for an electric rate increase of $19.6 million, or 5.75%, and a natural gas rate increase of $9.1 million, or 3.73%.  The proposed rate increase totaling approximately $29 million would go into effect in 2008. 

CUB sought the development of alternative rate options that would allow a customer to better control their electric energy costs while also reducing the cost drivers for the utility.  CUB's review of MGE's proposal showed that there are important improvements that should be made to voluntary residential time-of-use-rates that would better reflect the connection between rates and the cost of customer consumption.  CUB's investigation also showed that MGE's current standard flat rate for residential customers is discriminatory and fails to provide the proper price signals to customers concerning the cost of their energy use at different times of the day.  CUB recommended that MGE prioritize the development of rates that provide the proper price signal to customers.

Improved rate designs are especially important given increasing utility costs as well as future cost drivers such as peak growth and global warming.   Under MGE's proposal the rate classes with small customers, including residential customers, would end up paying approximately $11 million more per year than justified.  CUB proposed an alternative to MGE's proposed cost allocation that would significantly limit the costs passed on to residential customers.  Under CUB's proposal, residential and small customers' rates would increase by $4 million, a $7 million reduction from MGE's proposal.

Direct Testimony of George Edgar and Wayne DeForest
Rebuttal Testimony of George Edgar and Wayne DeForest
Surrebuttal Testimony of George Edgar and Wayne DeForest
CUB's Initial Brief
CUB's Reply Brief
CUB's Comments on Staff's Briefing Memorandum and Decision Matrix

Madison Gas & Electric
Rate Case Re-Opener for 2007
PSC Docket 3270-UR-114

MGE requested an increase in electric rates of $6.3 million for the test year beginning January 1, 2007.  On December 26, 2006, the Commission ordered an electric rate decrease in the amount of $495,000, a 0.15 percent decrease. 

Electric Cost Allocation of ERGS

MGE allocated the increase associated with costs for ERGS using non-coincident class demands.  CUB argued that the use of a mix of demand and energy allocators for production-related costs is appropriate for spreading the ERGS cost to the customer classes.  The Commission agreed and found that using a 60/40 mix of coincident demand and energy allocators is the most reasonable way to allocate production related costs like the ERGS costs. 

CUB's Initial Brief filed November 10, 2006

Madison Gas & Electric
MGE Fuel Cost Decrease Case
PSC Docket 3270-FR-100

On February 27, 2006, MGE filed its January 2006 monitored fuel cost report.  The January 2006 monitored fuel cost report shows MGE’s actual January 2006 fuel costs to be outside the variances set in the final decision.  On March 8, 2006, pursuant to MGE’s February 27, 2006, application and Wis. Admin. Code PSC 116.08(2), the Commission authorized MGE to implement a credit of $.00069 per kilowatt hour on all retail electric sales.  Pursuant to Wis. Admin. Code 116.08 and 116.09, the Commission ordered that MGE’s electric rates set in the final decision be subject to refund, with interest at 11.00 percent, pending a full review of MGE’s 2006 fuel costs.  On the same date the Commission issued a Notice of Proceeding and scheduled a prehearing conference in Docket 3270-FR-100 which was opened for the purpose of reviewing the Company’s fuel costs. 

On March 20, 2006, the Commission held a prehearing conference to set the issues and schedule for the proceeding and identify persons that will participate as full parties.  CUB participated at the prehearing conference.  The issues set for hearing are: (a) Has MGE experienced an extraordinary decrease in the cost of fuel as defined in Wis. Admin. Code PSC 116.03(8)?; (b) What is MGE’s average cost of fuel under Wis. Admin. Code PSC 116.08(1)?, What is the appropriate method of forecasting fuel cost in this proceeding?; (c) What is a reasonable and just electric rate decrease under Wis. Admin. Code PSC 116.08?; (d) What is the appropriate refund, if any, under Wis. Admin. Code PSC 116.08(5)?; and (3) What is the proper rate design? 

Subsequent to the prehearing conference CUB entered into negotiation with MGE to develop an agreement that would protect ratepayer interests and avoid the need to go to hearing.  Those
negotiations are continuing.  If a stipulation is not agreed to the case will go to hearing on May 1.

On April 21, 2006, MGE entered into a stipulated agreement with CUB and WIEG in lieu of a fuel cost hearing.  The stipulation provides for a fuel credit based on an average cost of fuel calculated by using actual fuel costs for January through March 2006, revised estimated fuel costs for  April through July 2006, and the fuel cost forecasts included in MGE’s 2006 test year revenue requirement for August through December 2006.  An interim fuel credit of 4.00454 per kWh will result in a monthly credit of approximately $2.72 for a retail customer using 600 kWh per month. MGE will pay interest on any over-collections of fuel costs at the rate of 11.0 percent, from March 9, 2006 until the date the refund is made.