Bruce Murphy
Murphy’s Law

Flush Times for We Energies

Big profits, big executive salaries. big donations, all paid for by rate payers.

By - Oct 3rd, 2023 10:46 am
Oak Creek Power Plant. Photo taken November 13, 2021 by Dave Reid.

Oak Creek Power Plant. Photo taken November 13, 2021 by Dave Reid.

The good times just keep coming for We Energies and its parent group WEC Energy Group Inc.

WEC is the fourth largest publicly traded company in the state, with total revenue of $9.6 billion, as the Business Journal reported. But while companies like Kohl’s or Rockwell Automaton have to battle other businesses to make their money, WEC is a legal monopoly with no real competitors.

And no public utility in the state makes more than We Energies. Second place Alliant Energy Corp. has less than half the revenue of WEC, just $4.21 billion in its most recent fiscal year.

In just the last decade WEC has seen its annual revenue more than double, rising by an average of more than 8% annually over the last five years.

In 2022 the company’s CEO Scott Lauber was paid a whopping $8.1 million in total compensation, 68 times more than the average employee, as the annual report on CEO pay by the AFL-CIO found.

But Lauber isn’t the company’s only millionaire. From 2017 to 2022, WEC could afford to pay its top four executives $98.9 million, according to an analysis by the Energy and Policy Institute. In the most recent year analyzed by WEC paid its top six executives a combined $31.2 million.

Brendan Conway, spokesperson for the company, defended this pay, noting that “Executive compensation at WEC Energy Group is targeted at the ‘market median’ … that is, in the middle of the pay range for individuals in similar positions in similar companies nationwide.”

Which puts it smack in the middle of a national trend of “out-of-control executive pay,” as a report by Energy and Policy Institute declared.

Four of those six millionaire executives also make up a majority of the board of directors of the We Energies Foundation, which sits on $81.2 million in assets and gave out some $9.2 million in donations in 2021.

One of its biggest donations was announced in May: $2 million to help pay for the Rainforest exhibition at the new Milwaukee Public Museum, as Conway disclosed. In essence this donation is more like naming rights, winning the utility perpetual good publicity at a major institution in Milwaukee: the exhibit will be called the We Energies Foundation Gallery: Rainforest, as Urban Milwaukee has reported.

In 2022, the foundation gave a $1 million gift to UW-Milwaukee “to establish the We Energies Scholarship Fund and the We Energies Student Success Fund.” Meaning countless students and families will be thanking We Energies in years to come for money that originally came from average ratepayers.

But these big grants are an exception. The foundation gives to a very wide range of causes and groups, in a typical year donating “to over 600 non-profit organizations,” according to Conway. Which means the average grant is not much more than $1,500, given that that foundation gave out nearly $9 million in grants in 2020 and nearly $9.2 million in 2021, according to its federal tax forms. In short, the money is spread as widely as possible.

“Sometimes that is a grant to a local food bank, environmental effort or arts group. Other times the giving is during an emergency like after the Waukesha Parade attack,” Conway noted.

It’s all part of a strategy noted by the Energy and Policy Institute, whose 2019 report found public utilities use charitable giving “to influence politics and increase investor profits.” The donations boost the “general public relations efforts” of the companies, the report noted, as utilities “routinely send out press releases boasting of their latest grants.”

We Energies ratepayer aren’t consulted about these donations, nor are they given any credit or praise for this. Conway says the foundation’s money comes from its stockholders. He also said the “vast majority” of compensation for the company’s executives is also paid by the stockholders.

How is it that they are able and willing to be so generous? Matthew Sweeney, public affairs officer for the Public Service Commission, which regulates the state’s utilities, once admitted to Urban Milwaukee that when stockholders “donate” a portion of their return to things like the company’s foundation, the money is “recovered in rates” set by the utility.

And those rates have been a boon to the company’s stockholders, who have “consistently” enjoyed “among the best total returns in the industry,” the We Energies website has bragged, including an annual average shareholder return of 15.1% from 2002 to 2017.

Driving that incredible return have been the high rates charged by We Energies. Both the consumer watchdog group, Citizen’s Utility Board (CUB) and the industrial watchdog group, Wisconsin Industrial Energy Group (WIEG) have found that Wisconsin’s electricity rates are much higher than both the Midwest and national average. But We Energies has by the highest rates, WIEG found, the third highest rates of any of 50 investor-owned utilities in the Midwest.

Conway has claimed the key statistic is not the average cost per kilowatt but average electric bill and in that regard We Energies compares favorably to other companies, but hasn’t offered any research to back up this claim.

And the rates went up yet again in 2023, with the PSC awarding the company a nearly 11% increase for residential customers that will cost them $11 to $12 more per month.

Which will help drive the company’s revenues, executive salaries and shareholder returns, not to mention underwriting those donations to various charitable groups.

One wonders how many of those groups know the actual source of the money for those donations. On the We Energies website you’ll find a five-minute video of community leaders throughout Milwaukee thanking We Energies for its generosity to area nonprofits.

Over and over, the company is showered with praise, without a word of thanks for the company’s rate payers, who are actually footing the bill.

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Categories: Business, Murphy's Law

8 thoughts on “Murphy’s Law: Flush Times for We Energies”

  1. Keith Prochnow says:

    Few things make so angry as this money-printing monopoly, unless it is the useless Public Service Commission, who never saw a price increase they didn’t love.

    What has to happen for the City of Milwaukee (or the County) to buy current on the open market and undercut Weinergies by sending out bills to residents based on no profit or outrageous executive salaries whatsoever?

  2. blurondo says:

    “Well isn’t that special”, the church lady.

  3. Wardt01 says:

    Informative piece &Thanks for including the link to the 990!

    It’d be nice to see the foundation focus on gifting or support of something energy related. And perhaps invest in some start-ups in WI that are trying to do something new or different in the energy/utility/resources industry.

    Looks like WE makes a $4mill annual gift to the foundation, not sure how much that adds to each customer’s bill? Maybe a dime a month? Someone else would have to do the math.

    I purchase energy from WE & from a private propane distributor & from a electric co-op in WI. The prices across the board have risen over past 5 years.

    I’d have to look at a bill to see if the co-op charge more or less per kwh than WE charges. However our co-op is much more proactive than WE when it comes to assisting homeowners figure out & finance energy savings projects. That’s just the nature of co-ops in general because the users are THE shareholders.

  4. Alan Bartelme says:

    Has WE Energies told anyone who they consider “individuals in similar positions in similar companies nationwide”? Public utilities shouldn’t be comparing themselves to all companies of the same size; utilities are monopolies that can extract more revenue every year just by raising rates. Other companies need to actually convince customers their products are worth buying.

  5. ZeeManMke says:

    WE officers and directors and friends use this monopoly to do outrageous things to people and they rake in the cash while people suffer. No politician will take them on. The PSC is a shadow of what it should be. We hands out cash while raising rates. The rich folk who work there are not supporting democracy or progressive politics. WE is more like Stalin in Russia that George Washington in Virginia.

  6. Jhenry1131 says:

    WE Energies is the #1 Organization in this State keeping people in poverty. Not just because of the rates, but because they report to people’s credit reports monthly!!! If someone has to apply for energy assistance, where the bill is paid in full, We Energies reports the bill unpaid to their credit report for the months the person waits for the process to conclude! Thier budget plan is also a scam, with people ending up with a huge balance at the end of the plan! This is shameful and should be illegal, but as we see, this is where many politicians go to retire!!!

  7. Colin says:

    8% every year, huh, sounds just like everyone’s electric bills. There’s zero competition. How is it legal just be FORCED to pay the only guy in town and have zero choice in this.
    If I knew I’d stay in this state for the long haul I’d solar up and disconnect entirely from them.

  8. BigRed81 says:

    State statute allows alternatives to the current monopoly.

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