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MG&E rate change hurts smaller users

The Wisconsin Public Service Commission approved a controversial rate change in a 2-1 vote. The PSC decision will allow MG&E and WE Power to increase access charges roughly 80-percent while lowering energy unit prices slightly.

The vote was held the day before Thanksgiving and the official order was issued two days before Christmas.

The change was widely opposed by poverty advocates, energy efficiency and renewable resource advocates, and numerous municipalities.

Wisconsin Community Action Program Association [WISCAP] testified in opposition to the change in October, noting the change was regressive and would have its greatest impact on low-income and low-volume residential users.

“The effect will be increased costs for low-income customers,” according to WISCAP. “Low-income customers will lose control over their energy bills and they won’t be rewarded with savings through energy efficiency.”

The change simply shifted costs from high-volume to low-volume customers, according to WISCAP, who said the impact will fall largely on the shoulders of residential and small business users.

“We have looked quite a bit at the MG&E decision, as well as companion decisions impacting Wisconsin Public Service and We-Energies customers,” said Bob Jones, the Executive Director at WISCAP. “We are opposed to the changes because of the negative impact they will have on low-income customers and on energy efficiency.”

MG&E initially talked about raising the monthly customer connection charge to nearly $50 by 2016 and potentially $70 by 2017. It backed away from that proposal and will instead raise the fee for residential customers from $10.44 to $19 for electric service and from $12.17 to $21.87 a month for gas service, while holding off on additional hikes in 2016 pending negotiations with the Citizens Utility Board and other customer groups.

Concerns over the proliferation of solar energy were among the reasons listed for MG&E’s new rate structure, though MG&E has only 160 customers with solar panels.

Final overall MG&E rate changes authorized consisting of a $15,416,000 annual rate increase for electric utility operations (a 3.76 percent increase) and a $3,788,000 annual rate decrease for natural gas utility operations (a 1.98 percent decrease) for 2015.

The Wisconsin Public Service Commission has three full-time commissioners.

Commissioner Phil Montgomery is a former Republican Assemblyman who represented the Fourth District (Green Bay) from 1998-2010. He was appointed Chairperson of the Public Service Commission of Wisconsin in March 2011 by Governor Scott Walker.

Eric Callisto has been a Commissioner on the Public Service Commission of Wisconsin since May of 2008, when he was appointed by Governor Jim Doyle. He was Chairperson of the Commission from the time of his appointment through February of 2011. From 1997 through 2003, he was an Assistant Attorney General at the Wisconsin Department of Justice.

Ellen Nowak was first appointed to the Wisconsin Public Service Commission in July 2011 by Governor Scott Walker.  She was reconfirmed for a new, six-year term beginning on March 1, 2013. Prior to her appointment, she served as the Chief of Staff to Waukesha County Executive, Dan Vrakas. From 2002-2006, she served as legal counsel and subsequent chief of staff to the Speaker of the Wisconsin Assembly. She also later worked as the Deputy Director of School Choice Wisconsin.

Montgomery and Nowak voted in favor of the change.

“I am persuaded the company’s proposal is reasonable … and a modest step in the right direction,” Montgomery said, according to the Wisconsin State Journal. 

MG&E “would have been justified to pursue higher fixed charges than what it sought,” Montgomery added.

Callisto dissented.

“It is poor regulatory policy. It is unfair. And it is being accomplished piecemeal, in separate rate case proceedings, over the sound and well-reasoned objections of Commission technical staff, and in the face of overwhelming public and stakeholder opposition,” wrote Commissioner Eric Callisto in his dissent. “Issues this important, this divisive, and this impactful for customers, deserve more comprehensive investigation and should be dealt with as part of a statewide effort.

“These increases will hit low and below average use customers the hardest,” Callisto continued. “They will discourage the adoption of customer-sited, distributed generation. They will undermine the economics of energy efficiency and conservation. And they will restrict how much control customers have over how much they pay, making it harder for customers to pay less by using less.”

Support for the change has been limited.

In the rate cases, testimony supporting the utilities was submitted by the Consumer Energy Alliance (CEA), a Houston organization with ties to anti-renewable energy groups. CEA submitted what it said were names of 2,500 Wisconsin residents supporting the MG&E and We Energies rate proposals, but the Madison Capital Times revealed that some of the people had not signed anything and actually opposed the utility plans. The PSC ultimately chose to discard the petition.

Some groups are also pointing to Nowak, saying she has acted more like a consultant to utilities companies than as an advocate for utility users.

Chief among them is the Alliance for Solar Choice (TASC) who called Nowak to be recused from the We Energies proceeding, charging “lack of impartiality” because of statements she made at conferences advocating for the types of changes the utility requested.

On June 10, Nowak spoke on a panel with Gale Klappa, the CEO of We Energies’ parent company WEPCO, at an Edison Electric Institute conference in Las Vegas, where she urged utilities to request increased fixed charges on all customers in response to solar power generation.

Comments and testimony offered at public hearings in October on the MG&E and We Energies cases were overwhelmingly opposed to the rate restructuring and in favor of solar energy. In all 1,160 comments were submitted, a far greater amount than such arcane proceedings usually draw.

Additionally, PSC staff failed to support the change, calling for further study of the matter. PSC energy policy analyst Corey Singletary testified, “I do not believe that the utility has provided sufficient support for its proposal to replace all of its current net metering tariffs.” Singletary recommended a study be undertaken before the change was approved.

Within 30 days of the commission publishing its final rule, lawsuits can be filed in state circuit court seeking to overturn the decision. A request for a rehearing by the commission can also be filed within 20 days, and such a request would stop the clock on the 30-day window for lawsuits.

The impact on heating assistance requests is unknown at this point, according to Roby Fuller, an Economic Support Specialist with the Crawford County Department of Human Resources.

“We have never run out of money, but if this really impacts people, who knows what will happen,” Fuller said.

“We look at a variety of factors when we determine assistance, so if this increases peoples heating costs, it will result in higher assistance payment,” Fuller continued.

News of the change had not reached Fuller yet through the Wisconsin Home Energy Assistance Program (WHEAP) that she administers. She suspected it would be a topic in February when the annual conference is held.

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For information on heating assitance in Crawford and Vernon Counties, please see