Flush Times for We Energies
Big profits, big executive salaries. big donations, all paid for by rate payers.
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.
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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