Milwaukee Will Contest We Energies Rate Hikes

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

We Energies will face opposition from the City of Milwaukee when it attempts to raise rates for the third straight year.

The utility is seeking to raise residential electric rates by 6.9% in 2025 and 4.6% in 2026. The typical residential customer would see their monthly electric bill increase by approximately $18 over that period says the utility.

Gas prices, through We Energies two gas utilities, would also rise. One by 15.6% over two years and the other by 12.1%.

“You might be thinking here we go again, well, you’re not alone in that,” said Alderwoman Marina Dimitrijevic to her colleagues on the Common Council.

She is leading the charge for the city to formally oppose the rate increases pending before the Public Service Commission. Other groups, including the Citizens Utility Board, are also expected to oppose aspects of the increases.

“People keep telling me to be patient, be reasonable, and this is a time of rising costs for everyone,” said Dimitrijevic. “That’s not what I see. I see an entity determined to ensure a minimum rate of return for its shareholders regardless of the affect it has on those it is supposed to serve.”

The utility’s currently allowed rate of return is 9.8%. Dimitrijeivc said it’s the fifth-highest rate in the country. An earlier study by the Wisconsin Industrial Energy Group found that the company’s rate of return was third highest in the Midwest for investor-owned utilities.

“Say no to this money grab,” said the alderwoman, who found unanimous support from her colleagues to co-sponsor the directive to the City Attorney’s Office.

The utility has said it needs the rate increases to support the transition to renewable energy, which Dimitrijevic supports, and improving the reliability of its services.

“Maybe we need to plan better,” said Dimtrijevic about improving infrastructure. “With that type of profit, I believe that better planning should be in place.”

We Energies, however, is dealing with a surge in extreme weather events. Since 2019, the utility has had eight severe weather-related outages, where more than 100,000 customers lost power, but only had six such outages in the 43 years prior.

Dimitrijevic has been the council’s leader on addressing climate change. But she’s also worked to be a champion of equity.

She said the utility is engaging in “environmental redlining… just to turn a profit.”

“Many low-income Milwaukeeans who live in the oldest and least energy efficient housing stock, spend nearly 15 to 20% of their income on utilities,” said Dimitrijevic. “I see that the highest energy burden areas in Milwaukee have been found to parallel the real estate red lines that hemmed people of color into our city’s least desirable neighborhoods for decades and decades.”

“I urge the Public Service Commission to demand We Energies do better for our community,” said Ald. Peter Burgelis. “Post-pandemic Wisconsin is not an opportunity for lining shareholders pockets with even more profits.”

“We Energies has always served its shareholders first and at the expense of its customers in Milwaukee,” said Dimitrijevic.

We Energies has been approved to increase rates every year since 2019. It’s also made several large investments in renewable energy during that period and expedited its shift from coal to natural gas.

“We are at the start of this,” said assistant city attorney Tom Miller in presenting the process to the Public Works Committee on May 8. Prior interventions from the city have resulted in modified rates for street lights and other changes to the rate structure.

Update: An earlier version of this article misstated the number of years of consecutive rate increases. There was no increase in 2021 nor 2022.

Related Legislation: File 231927