WPS Cases

Wisconsin Public Service
WPS Rate Case for 2009-2010 Rates
Docket 6690-UR-119

On April 1, 2008, WPS filed an application to raise its electric and gas rates starting January 2009.  WPS asked to raise electric rates by $107 million, or 8% in 2009.  Gas charges (excluding the cost of the gas itself) would increase by 2%.  WPS stated that the electric rate increase was needed because of rising fuel costs, costs for new transmission projects, costs for a new wind farm, and costs related to the new Weston 4 power plant.

As a part of this case, CUB entered into an agreement with WPS to greatly increase investments in energy efficiency programs for customers.  WPS has agreed to ramp up its support for Focus on Energy over the next four years from about $12 million per year to $36 million per year.  WPS will also test new rate designs and load management opportunities for customers through 3-year pilots operating in three communities served by WPS; the communities have not been chosen at this time.  WPS has also agreed to knock off $2 million from rates charged to residential and commercial customers.  In exchange, WPS can "decouple" its sales of electricity from the profits it is authorized to collect. 

Due to rapidly falling natural gas prices, WPS, CUB, and other intervenors agreed to a settlement in which rates would remain unchanged for 2009.  The PSC accepted this settlement on December 23, 2008.  The Commission also accepted the agreement between WPS and CUB regarding decoupling, but the Commission added "conditions" to the agreement that may make it unworkable.  WPS and CUB will likely ask the PSC to reconsider these conditions.

Wisconsin Public Service
WPS Merger with Peoples Energy
Docket 9405-YI-100

On July 10, 2006, WPS Resources and Peoples Energy Corp. announced their intent to merge.

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. 

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 made promises that "synergy savings" resulting from more efficient utility operations would outweigh the costs of the merger and provide benefits to ratepayers.

During 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 had to 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. 

Unfortunately, the PSC approved the merger on February 8, 2007.

Wisconsin Public Service Corp
WPS Rate Case for 2007 Rates
Docket 6690-UR-118

On March 31, 2006, WPS filed a request for authority to increase its electric rates by $136.9 million, a 15.8% increase, and to increase its Wisconsin natural gas rates by $22.6 million, a 3.9% increase, to be effective January 1, 2007. 

WPS proposed to forego a request for a rate increase in 2008 if the PSC agreed to allow WPS to implement a two-year pilot "revenue stabilization mechanism" (RPS).  CUB argued that the PSC should reject the use of this mechanism unless WPS implements energy efficiency programs that encourage customers to save energy, which WPS was not willing to do.

CUB also argued that the RPS could allow WPS to receive profits as high as 16.6%, instead of the authorized 10.9%.  The Commission agreed with CUB and denied WPS's request for this revenue stabilization mechanism. Had this mechanism been approved, WPS could have earned excess revenues of $68 million.

On January 11, 2007, the PSC concluded the case and authorized a $56.7 million annual rate increase for WPS's electric operations, a 6.6% increase, and an $18.9 million rate increase for natural gas operations, a 3.8% increase, for 2007 rates.  Based in part on CUB's effort, the PSC reduced WPS's profits by $10 million.