PSC Approves Even Higher Energy Rates for Struggling We Energies and WPS Customers

MADISON – State energy regulators on Thursday voted to approve a rate hike for We Energies and WPS customers that will keep the utilities’ high profits in place for two more years and squander needed customer savings on a coal plant slated to shut down soon.

Prices for typical We Energies and WPS residential customers will rise by 13% to 14% over the next two years, with electricity bills for a typical customer rising more than $17 a month for We Energies and nearly $14 a month for WPS by 2026. Natural gas utility charges will also rise, by nearly $4 a month for WPS, $4 a month for Wisconsin Gas and nearly $9 for Wisconsin Electric natural gas customers.

“This decision was a huge missed opportunity to help customers facing the prospect of significantly higher energy bills over the next two years,” said Tom Content, CUB executive director.  “CUB and other public interest groups put a spotlight on affordability in this case and identified key areas where the PSC could restore balance between customers and WEC Energy Group (WEC) shareholders. High profits helped WEC outperform the stock market and other regulated utilities over the past 20 years, with the customers paying climbing bills to sustain this outperformance.”

“With inflation forecast to be below 2.5% in each of the next two years, the Commission had an opportunity to rein in the utilities’ requested 18-20% increases,” Content said. “We testified that the combined impact of We Energies’ requested rate increases, on the heels of the double-digit hike that just hit bills in 2023 and this year, would raise electricity costs for homeowners and renters by a third.”

The decision in the case, which will be finalized next month, came after more than 1,000 customers submitted public comments, at hearings and online, describing their struggles to manage their monthly energy costs and to pay their bills.

Final numbers on what the increase means for residential, business and industrial customers will be available in December. New rates take effect Jan. 1.

On a key issue in the case, the PSC decided to maintain the companies’ return on equity (ROE), or profit rate, at 9.8% for the next two years. The PSC had modestly reduced these utilities’ profit rate two years ago and, just last week, reduced the ROE for a smaller Wisconsin investor-owned utility. The PSC staff recommended a 9.65% ROE for We Energies and WPS, and CUB recommended 9.3% based on credible evidence supporting continued gradual movement toward more reasonable customer bills.

“This is no time for dismissing customers’ concerns, given the profit and earnings performance of these utilities over two decades and the fact that customers’ bills rose faster than inflation over that time,” Content said. “The affordability crisis calls for a more reasonable, evidence-based, and balanced approach.”

On the soon-to-be-shut Oak Creek coal-fired power plant, We Energies argued it should earn 10% profit for 17 years after it shuts down. Groups across the political spectrum – including Americans for Prosperity, Walnut Way Conservation Corp, AARP Wisconsin, Wisconsin Industrial Energy Group, and CUB – proposed common-sense alternatives, but the Commission sided with shareholders rather than customers.

“CUB’s proposal would have saved more than $300 million for customers. The PSC’s decision burdens customers with paying for full We Energies profits on dead power plants, putting people paying the bills in an even tougher position in 2025 and 2026,” Content said.

The PSC took a different approach with the Columbia power plant, modestly reducing the amount WPS customers pay on that plant, but only for the next two years. The PSC said it would revisit the issue in the rate case two years from now.

NOTE: This press release was submitted to Urban Milwaukee and was not written by an Urban Milwaukee writer. While it is believed to be reliable, Urban Milwaukee does not guarantee its accuracy or completeness.