Regulators OK MG&E rate increase

Electric increase is largest in a decade

Despite one of the three state regulators dissenting Wednesday, a request from an area utility to raise electric rates for tens of thousands of Dane County customers was approved shortly after noon.

Madison Gas and Electric had asked the Public Service Commission for permission to raise its fixed monthly rates from $10.44 to $19, the utility’s largest increase in the last decade. The proposal also calls for reducing the hourly usage fee by a few cents.

The three-person state Public Service Commission was not in agreement Wednesday morning on how the agency should proceed.

The chair of the PSC, Phil Montgomery, said he supported the rate change and called it an “exercise in customer fairness.” Commissioner Ellen Nowak agreed with Montgomery, saying the increase was a “step in the right direction.”

“This is about fairness, to me, and understanding that you are still connected to the system,” Nowak said. “There are still costs associated with being connected to the system and those costs must be accurately charged to the customer.”

But Commissioner Eric Callisto said the rate increase would have a disproportionate impact on residential and small business customers. He said the increases were monstrous and approving them would be a mistake.

“This is our regulatory policy these days. The folks who use the most get a break on their bill. Those who use the least, those committed to conservation, least able to pay, see double-digit increases,” Callisto said.

Callisto suggested a separate investigation to explore state-based energy rates, which Montgomery called pointless and “a thinly veiled attempt to delay.”

The PSC approved the rate increase with two members voting for the increase and one member abstaining.

MG&E estimated that a typical residential customer who uses about 550 kilowatt hours of electricity a month will have to pay about $3 more.

Renewable-energy groups and AARP were on hand for the final vote Wednesday. They said the plan will have immediate and long-term effects for those on fixed incomes or those using wind or solar power.

“This is going to decrease financial payback for that, make it less likely that people are going to be interested in that,” said Tyler Huebner, with Renew Wisconsin. “It is going to send more people looking at what are other options.”

“It is disappointing. The PSC talked today about it was only a few dollars a month; $50-$70 a year, that’s a lot of money for seniors on fixed incomes,” said Jim Flaherty, with AARP Wisconsin.

Dozens of people protested the rate hike last month in Madison, asking the PSC to reject MG&E’s proposal.

In a statement Wednesday afternoon, shortly after the increase was approved, Madison Mayor Paul Soglin said he was disappointed in the decision.

“(The) approved rate design is contrary to (Madison’s) interests,” Soglin said. “(It) will undermine energy conservation efforts and the renewable-energy investments in our community.”

The rates will go into effect Jan. 1, and be frozen for all of 2016.