WisBusiness: WIEG chief raps We Energies rate increase request

By Brian E. Clark

Milwaukee-based We Energies is asking the Public Service Commission (PSC) for permission to raise electric rates for its customers by 7.5 percent in 2008 and another 7.5-percent increase in 2009.

But an industrial organization is charging the increase request is actually four times that amount.

Todd Stuart, executive director of the Wisconsin Industrial Energy Group, said he was shocked by We Energies’ filing. Without the sale of Point Beach, he said customers will actually be paying an additional $712 million, which amounts to a 34 percent rate increase. By comparison, he noted that MGE of Madison filed for a 6 percent increase yesterday.

“We Energies will claim their rate increase is only 7.5 percnt each year for 2008 and 2009,” he said. “But the reason We Energies can say this is that they are assuming that nearly half a billion dollars from the sale of the Point Beach nuclear power plant will be approved by the PSC and returned to ratepayers.”

Stuart said We Energies rates for large industrial customers have grown faster than residential rates over the past decade. Industrial rates went up 31% from 2000-2005 and 41% from 1995-2005, he said. In addition, the largest industrial customers had their rates raised between 12% and 17% in the last rate hike approved in early 2006, he added.

Brian Manthey, a spokesman for We Energies, said his utility plans to return $660 million to rate payers from the sale of Point Beach. He said without the pending Point Beach sale, the rate hike would be closer to 28 percent.

“If the Point Beach sale is delayed, we’ll have to take another look at the rate filing,” he said. Manthey said reason for increase in rates is because of billions of dollars in spending by We Energies for new plants and transmission systems, plus environmental upgrades. In addition, the utility is building an 88-turbine wind farm in Fon du Lac County dubbed Blue Sky Green Field that should generate enough electricity to power more than 36,000 homes.

Manthey said his company is investing around $2.7 billion for the expansion of the Oak Creek coal-fired electricity facility, the Port Washington Natural Gas Power Plant Project and the wind farm.

He said We Energies is also investing in environmental improvement projects at its existing plants. Over the next few years those costs will be between $400 million and $500 million.

“Once they are all in place expect to reduce sulfur oxide and Nitrogen Oxide emissions by around 65 percentand mercury emissions by 60 percent,” he said.

Manthey said all of the projects have gone through the PSC approval process and none of them were inexpensive.

“They should all solve power reliability issues that were of major concern in recent years,” he said. “All of these investments have gone through the approval process and are part of our Power the Future program.”

Manthey said it is not fair to compare the We Energies and MGE rate increase requests. “What is driving our increases are billions of dollars in investments, not the every day costs,” he said.