By Brian E. Clark
WisBusiness.com
Falling natural gas prices have prompted the state Public Service Commission (PSC) to approve a $32 million refund for electric customers of Wisconsin Electric Power Company, a subsidiary of We Energies.
In the past 12 months, the price of natural gas at the wellhead has plummeted 47 percent, energy analysts report.
Charlie Higley, executive director of the Citizens Utility Board, said he was pleased with the deal.
“We are glad the PSC is ordering this refund of money back to customers,” he said. “This will give them at least a little break on high prices.
“I just hope natural gas prices stay down,” he said. “No one really knows what will happen this winter. A lot of it probably depends on the weather.”
The average residential customer can expect to see a refund of approximately $10.25, officials said. This refund, along with other refunds and rate reductions, means the PSC has ordered more than $100 million in rollbacks so far this year.
Two weeks ago, the PSC lowered lowered electric rates for Wisconsin Power and Light’s 450,000 residential and commercial customers by 4.5 percent.
The PSC also ordered the utility, a division of Madison-based Alliant Energy, to refund nearly $30 million – primarily as a result of lower natural gas costs. That means a typical Alliant residential customer will get $25, in addition to a rate reduction of about $3 a month.
PSC Chairman Dan Ebert called the order to refund $32 million to Wisconsin Electric Power Company ratepayers and other consumers “good news.”
“Last year, when we set the 2006 electric rates for We Energies, natural gas prices were at an all time high.
“We put protections in place at that time to make sure that customers would see refunds as natural gas prices dropped.”
The PSC determined that a refund was due to We Energies customers as part of its monthly fuel cost monitoring and audit.
Commissioner Mark Meyer added, “The timing for the refund to We Energies customers couldn’t be better. We are able to get money back in ratepayers’ pockets as we enter the heating season.”
Mitigating the impacts of increasing costs of fuel to generate electricity has been a major focus of the PSC, officials said.
Volatile, unregulated natural gas prices have been responsible for nearly 70 percent of the electric rate increases in 2006, they said.
Unreliable railroad coal shipments have also been a problem.
We Energies officials testified that coal reserves were so low over the past year that they had to burn natural gas to replace coal-fired generation or buy additional power in the wholesale market, often at dramatically higher prices than the cost of their own coal-fueled resources.
Two more fact-finding public hearings on railroad issues, sponsored by the PSC and the Department of Agriculture, Trade and Consumer Protection, are scheduled for Thursday, September 28th in La Crosse and Green Bay.
Documents associated with the We Energies refund can be viewed on our Electronic Regulatory Filing System at: http://psc.wi.gov. Type case number 6630-FR-100 in the boxes provided on the PSC homepage, or click on the Electronic Regulatory Filing System button.
