WisBusiness: PSC approves 6 percent Alliant natural gas increase

The Wisconsin Public Service Commission(PSC) on Monday granted an interim electric
rate increase to Alliant Energy to reflect the increased costs of natural gas.

In addition, the PSC reopened the full rate case to explore the option of returning over-collections to consumers in an expedited manner.

The PSC approved an interim electric rate increase of $55 million or about 6%, which means $3.00
per month to the average residential customer. The new rate is set on an interim basis, pending a
full audit of the rate request and subject to a refund with 11.5 percent interest.

With the Alliant Increase, the PSC has granted utilities more than $250 million in rate increases this year.

“The PSC is doing for Alliant what it has done for other utilities because of the high cost of natural gas,” said Charlie Higley, director of the Citizens Utility Board.

“The message for conumers is that that they need to take steps to conserve, especially with this current cold weather,” he said.

“One good thing to come out of this meeting is that the PSC will make it easier to get refunds if the price of natural gas drops in the future,” he said.

PSC Chairman Daniel Ebert said natural gas prices have increased dramatically over the past few years and spike recently.

“This year alone, WP&L customers have seen $115 million in rate
increases due to the run up in natural gas prices. If prices of natural gas had remained constant,
these approved rate increases would have only been about $5 million, or less than 2%.”
Interim fuel rate cases are designed to provide flexibility for utilities to react to these volatile fuel
prices. Under the interim fuel rate procedure, a utility first proves that its fuel costs have exceeded
the range set in its previous rate case. The Commission agreed today that WP&L’s fuel costs
exceeded the preset threshold and granted the interim rate increase.

“We are facing extraordinary times,” said Commissioner Mark Meyer. “The disruption in the gas
supply is the only reason WP&L made this request and it is clear they have gone outside their fuel
range. As a part of our action today, we will also be looking at how to provide protections for
consumers should fuel prices decrease.”

Next, the PSC will conduct a full audit of the increased fuel costs to determine if the amount of the
request is reasonable. Public hearings will also be held on the interim rates, which will be
announced at a later date. If the Commission decides that the fuel rate increase or any portion of
the fuel rate increase was excessive or unwarranted, the funds will be returned to ratepayers at 11.5
percent interest.

The Commission has also decided to reopen WP&L’s previous rate proceeding. The Commission
will revisit a provision that determines when the utility can seek a fuel rate increase and when it is
required to reduce rates or provide refunds to customers. This will allow the Commission to react
more quickly when fuel costs go down and when utilities need to adjust customer rates to reflect the

The PSC will hold a scheduling conference on Thursday, December 8th at which the next
steps in the case will be determined.