WPS Cases
Wisconsin Public Service
WPS Rate Case 2007 Test Year
Docket 6690-UR-118
On March 31, 2006, WPS filed a request for authority to increase its Wisconsin retail electric rates by $136.9 million, a 15.8 percent increase, and to increase its Wisconsin retail natural gas rates by $22.6 million, a 3.9 percent increase, to be effective January 1, 2007.
WPS Rate Stabilization Plan
WPS proposed to forego a rate increase request in 2008 if the Commission agreed to the following condition, among others: A two-year pilot revenue stabilization mechanism (RSP). CUB’s expert witness and legal team argued that as a matter of fundamental policy, approval of an RSP mechanism should be tied to utility adoption of truly significant measures to curb load and peak demand—such as the end of the use of residential flat rates, full-scale adoption of new load management options and energy efficiency measures as well as investments in low-income weatherization. WPS did not indicate that it is willing to do any of these. Instead, the utility pleads that declining sales justify its adoption of an RSP. CUB argued, however, that declining sales alone should not be sufficient grounds to approve a utility RSP mechanism. Finally, the RSP could result in the utility achieving exorbitant returns as high as 16.6%. Such a result would hardly comply with the standard the Commission must follow of ensuring that rates are “just and reasonable.” The Commission agreed with CUB’s position and denied WPS’s request for this rate enhancement plan.
On January 11, 2007, the Commission authorized a $56.7 million annual rate increase for electric operations, a 6.6 percent increase, and an $18.9 million rate increase for natural gas operations, a 3.8 percent increase, for the test year ending December 31, 2007.
Intervenor Direct Testimony (Lee Smith, Confidential, Redacted) filed August 22, 2006
Intervenor Direct Testimony (George Edgar, Wayne DeForest) filed August 28, 2006
Intervenor Direct Testimony (George Edgar) filed August 28, 2006
Intervenor Rebuttal Testimony (George Edgar, Wayne DeForest) filed September 11, 2006
Intervenor Surrebuttal Testimony (George Edgar, Wayne DeForest) filed September 19, 2006
Intervenor Surrebuttal Testimony (George Edgar) filed September 19, 2006
Intervenor Surrebuttal Testimony (Lee Smith, Confidential, Redacted) filed September 19, 2006
CUB's Initial Brief (Confidential, Redacted) filed October 20, 2006
CUB's Reply Brief filed November 3, 2006
PSC's final order January 12, 2007
WPS Resources Corporation
WPSR Merger With Peoples
Docket 9405-YI-100
WPS Resources Corporation (WPSR) is the holding company that owns Wisconsin Public Service Corporation, a regulated utility that sells electricity and natural gas in the Green Bay area. Peoples Energy Corporation (Peoples) is the holding company that owns two regulated utilities that sell natural gas in Chicago, namely Peoples Gas Light and Coke Company and North Shore Gas Company. WPSR and Peoples announced their intent to merge on July 10, 2006.
In proceedings before the PSC, CUB objected to the merger because mergers rarely if ever provide benefits to the ratepayers of the utilities. Like other utility holding companies that have proposed mergers, WPSR has made promises that “synergy savings” resulting from more efficient utility operations will outweigh the costs of the merger and provide benefits to ratepayers. In its filings in the proceedings, CUB pointed out that three-fourths of mergers fail to provide benefits to the acquiring company’s shareholders, let alone ratepayers, and that “synergy savings” rarely provide any benefit to ratepayers. Utility mergers almost always enrich utility executives while causing higher rates for utility ratepayers and the loss of jobs of utility workers.
In addition to criticizing the often fictional “synergy savings” promised by utility management, CUB raised concerns about the problems afflicting the utilities owned by Peoples. For starters, Peoples Gas Light and Coke Company and North Shore Gas Company must refund $100 million swindled from their customers in a shady deal involving Enron Corporation. Next, the Peoples Gas utility has very old gas pipes, with some dating back to the Civil War. Not only have there been explosions on the Peoples Gas system, but repairs and replacement of old pipes located under the streets of downtown Chicago will be very expensive, posing liability threats to its new Wisconsin owners. The merger between WPSR and Peoples won’t provide benefits to Wisconsin ratepayers, and the PSC made the wrong choice in approving the merger.
This case is complete.
CUB's Initial Brief (Confidential, Redacted) filed January 26, 2007
CUB's Reply Brief filed January 31, 2007
PSC's final order filed February 16, 2007
