EAU CLAIRE, Wis. — In order to meet the future energy needs of its growing customer base in northwestern Wisconsin, Northern States Power Company, a Wisconsin corporation (NSP-Wisconsin) d/b/a Xcel Energy, today filed an application with the Public Service Commission of Wisconsin (PSCW) for an increase in base electric and natural gas rates effective Jan. 1, 2006.
“We have been able to maintain our low rates over the past several years by reducing costs, creating efficiencies and minimizing expenses,” said Mike Swenson, president and CEO of NSP-Wisconsin. “And while our customers continue to do a great job of conserving energy, the sheer number of new homes, businesses and residents in northwestern Wisconsin is increasing the overall need for energy.”
From 1994-2010, the number of electric customers that Xcel Energy serves in northwestern Wisconsin is expected to increase by 27 percent, and overall electric use is forecasted to increase by 34 percent. During that same time, the number of natural gas customers that Xcel Energy serves in Wisconsin is expected to increase by 65 percent.
Electric Base Rates
If approved as filed, a typical residential customer using 750 kWh of electricity a month will see an increase of $8.19 per month.
“This rate increase will allow us to invest in our system and ensure the continued reliability and high environmental performance of our facilities,” Swenson said. “These efforts, combined with other critical company initiatives, will let us meet the energy needs of our customers now and in the future.”
The increase in electric costs is primarily driven by the construction and maintenance of generating facilities and transmission lines to meet growing electric needs. In addition, Xcel Energy expects continued increases in the cost of fuel to run its generating facilities and for electricity purchased on the wholesale market.
Electricity from Xcel Energy continues to be a good value for its customers. Since 1984, the cost of goods and services, as measured by the Consumer Price Index (CPI), has increased by nearly 80 percent. At the same time, Xcel Energy’s residential electric rates in Wisconsin rose by just 26 percent.
Natural Gas Base Rates
If approved as filed, a typical residential natural gas customer will see an increase of $4.98 per month. The increase in natural gas costs is due to ongoing installation and maintenance of the company’s natural gas distribution system and for environmental cleanup work at former manufactured gas plant sites in Chippewa Falls, Eau Claire, La Crosse and Ashland.
The increase in natural gas base rates does not reflect the wholesale cost of natural gas. The wholesale cost of natural gas is passed on to customers at the same price Xcel Energy pays, with no mark-up, and varies monthly depending on market variables. Base rates for natural gas service and the wholesale cost of natural gas appear separately on customer bills.
Application Filed
In its application, Xcel Energy is seeking an overall increase of $40.8 million in base electric rates and $7.0 million in base natural gas rates. Major reliability and system improvement projects identified in the application include:
· Major maintenance of the King-Eau Claire-Arpin 345-kilovolt transmission line
· Replacement of steam generators and reactor vessel heads at Prairie Island Nuclear Power Plant
· Significant maintenance at Bay Front and Wheaton Power Plants
· Construction of new natural gas combustion turbines at Angus Anson and Blue Lake Power Plants
· Construction of transmission lines to support increasing wind generation.
The PSCW will hold hearings on the application in the fall in Madison. A full hearing schedule, when determined, will be available on the PSCW’s website at http://psc.wi.gov/.
