WisBusiness: WIEG says utility rate hike request ‘excessive’

By Brian E. Clark

A proposed utility rate hike could raise some Badger State industries’ electric bills by $1 million or more annually and put them out of business, a business group is charging.

The Green Bay-based utility, Wisconsin Public Service Corp. (WPSC), wants to increase electricity rates by 7.75 percent starting in 2009.

The WPSC also wants to increase natural gas rats by 2.16 percent a month. The hike request was submitted to the state Public Service Commission this week.

The company, which has 420,000 residential and business customers in the central and northern regions of the state, said it needs the increase because its costs are rising.

But Todd Stuart, executive director of the Wisconsin Industrial Energy Group (WIEG), said the request is excessive and his organization will fight to reduce the size of the rate hike.

“We simply cannot afford this big of an increase when we are part of the global economy,” said Stuart, whose group includes some of the state’s largest manufacturers and energy consumers.

Stuart said some WIEG members already spend $12 million a year on their electricity bills. A rate increase of 7.75 percent would add nearly $1 million to that bill.

Wisconsin has lost over 100,000 manufacturing jobs since 1999, Stuart noted. The paper industry alone is bracing for roughly 1,000 jobs to disappear this year, jobs that pay 25 percent or more than the statewide average wage,” he addd.

“Our manufacturers are competing not just against Midwestern states, but against the entire world,” he said.

“It is tough to remain competitive with large electric cost increases, especially when the national economy could already be in a recession. Manufacturers can’t fully pass these increases along to their customers.”

Charlie Higley, executive director of the Citizens Utility Board, said he is concerned about the impact the WPSC rate hike will have on consumers.

“Salaries are not increasing much, so this size of a hike will make it harder for many households to make ends meet,” he said.
The utility said a typical customer’s electricity bill will go up about $6.11 under the request. The natural gas bill would increase by around $2.18 a month.

Higley said there were no surprises in the rate increase request, so he predicted most of the hike would be approved.

“Fuel is more expensive, they have to pay for new transmission lines and then there is the cost of bringing the Weston 4 power plant on line.

“But they say that is actually holding down future costs because producing power at Weston 4 will be less expensive than buying electricity from some other utility.”