By Brian E. Clark
In an oral decision Tuesday, the state Public Service Commission approved an average rate hike of roughly $60 million, or 6.4 percent, for Alliant Energy. It will go into effect Jan. 1.
Officials said the ruling will mean average residential customers will see a monthly jump in their electric bills of about $6.10. The PSC also raised the company’s natural gas rates by about $5.5 million, amounting to a monthly increase of approximately $1.50 for gas distribution service.
“Today’s action struck a balance between a utility that needs more revenue to continue to provide reliable service, and a customer base that is working its way through hard economic times,” PSC Chairman Eric Callisto said. “At the end of the day, we cannot allow a regulated utility to fall off the cliff. Today’s decision kept the current recession in mind while keeping the lights on and keeping the utility moving forward.”
The Madison-based company had initially requested an increase of more than $100 million, or 10 percent. The PSC staff, in an audit, recommended a $73 million boost, or about 7.8 percent on average.
Part of the rate increase will cover declining sales for the utility. Since 2008, it has lost several major industrial customers, including the huge General Motors plant in Janesville. Another part of the rate increase will pay for the utility’s investment in the Bent Tree wind farm in Minnesota.
Charlie Higley, executive director of the Citizens Utility Board, said he was he was “glad the PSC was able to approve a more reasonable rate increase than that sought by the utility.
“That said, the PSC could have done more to lower rates, especially given the bad economy faced by consumers.”
And Todd Stuart, executive director of the Wisconsin Industrial Energy Group, said his organization is reviewing the decision to figure out its impact on larger customers.
“The Public Service Commission had to make some very tough decisions today,” he said. “The rate increase was primarily driven by the recession, the loss of major manufacturers and also new wind farms spurred by Wisconsin ’s renewable mandate.”
He called it a “perfect storm” of rising costs.
“Going forward, these painful rate increases will actually look small compared to what is looming with the pending climate change legislation,” he said.