WisBusiness: PSC Orders Alliant To Lower Rates 4.5 Percent, Refund $30 Million

By Brian E. Clark

MADISON – Following on the heels of recent rate reductions for two other
utilities, the state’s Public Service Commission (PSC) on Wednesday
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.

In addition, the deal prohibits Alliant for asking for a price hike for
the remainder of 2006.

Scott Smith, a spokesman for Alliant, called the agreement fair.

“Fuel prices have come down a lot since we filed for the rate increase,”
he said. “We worked this agreement out with user groups and we’re glad the
commission has accepted this proposal.”

Todd Stuart, executive director of the Wisconsin Industrial Energy Group
(WIEG), said his organization is happy with the settlement.

“We are glad that a good-sized chunk of money will be coming back to
Alliant ratepayers soon,” he said. He said natural gas rates have fallen
by roughly half since last October, when they spike following Hurricane
Katrina. Coal prices have risen slightly since then.

Charlie Higley, executive director of the Ciizens Utility Board (CUB) said
the agreement was good for electricity consumers.

PSC Chairman Dan Ebert said the deal is a “win” for Alliant’s customers.

“Because of the protections we put in place when we first set Alliant
Energy’s rates last year, we have been able to move quickly to lower
electric rates and get refunds back to ratepayers as fuel costs have

Ebert also said the PSC had lowered rates for Wisconsin Public Service
Corporation and Madison Gas and Electric customers over the past few
months, as well.

Commissioner Mark Meyer also praised the rate reduction and refund.

“I support the agreement for several reasons; it provides that Alliant
will revise and re-file its risk management plan, waive its right to seek
deferral for 2006 and most importantly it will return money to ratepayers
at a time when they carry the burden of historically high energy costs,”
he said.

Last year, the Commission approved an interim rate increase for Alliant
Energy when unregulated natural gas prices were at an unprecedented high.
Fuel costs have since dropped, entitling customers to a refund with 11.5
percent interest.

The PSC determined the refund as part of a fuel cost audit. The refund was
negotiated with Alliant by WIEG and CUB as part of the PSC rate review

Documents associated with this case can be viewed on the PSC’s Electronic
Regulatory Filing System at: http://psc.wi.gov. Type case number
6680-UR-114 in the boxes provided on the PSC homepage, or click on the
Electronic Regulatory Filing System button.