Customers of Madison Gas & Electric may want to brace for a major hike in monthly services fees after state regulators approved a similar change for a Green Bay-based electric utility.
The state Public Service Commission (PSC) Thursday on a 2-1 vote approved an 80 percent increase in service fees for Wisconsin Public Service Corp. (WPSC).
That means the monthly fixed charge for all WPSC residential and small business customers will jump from $10.40 to $19 effective Jan. 1, 2015. The new fixed charge is the highest of any investor-owned utility in the Midwest.
MGE is seeking to raise its monthly fee from $10.44 to $19, a move opposed by consumer and environmental groups who say the proposal will hurt customers who use less electricity and will result in increased energy costs over the long-term.
The vote by the PSC on Thursday means the commission will likely approve the MGE rate change when that decision is made later this month, says Kira Loehr, executive director of the Citizens Utility Board.
“I would think (the commission) would make a decision consistent with the other cases,” she said Friday.
The three member commission consists of two appointees of Gov. Scott Walker, Phil Montgomery and Ellen Nowak, and one holdover from former Gov. Jim Doyle, Eric Callisto, who cast the "no" vote in the WPSC case.
We Energies of Milwaukee is also seeking to raise its monthly service fees in another case pending with the PSC.
Electric utilities in Wisconsin and in other states are struggling with how to cover the fixed costs of operating and maintaining electric systems amid the increase in solar power usage and energy conservation. They want to dramatically hike the monthly service fees for most customers while reducing charges for the amount of electricity consumed.
Critics contend the changes will discourage customers from using less electricity and are simply a way for utilities to maintain profits and protect their investment in plants that burn coal or natural gas.
MGE had initially talked about raising the monthly customer charge to nearly $50 by 2016 and potentially $70 by 2017. It has since backed off that timetable and now proposes raising the fee to $19 and holding off on future hikes pending negotiations with the Citizens Utility Board and other customer groups.
Loehr says the PSC has missed a chance to consider other ways to handle changes in the electric industry and maintains the decision would hurt low-income and fixed-income customers by removing their ability to lower their bills by using less energy.
“In the face of ever-increasing energy costs, we should all be looking for ways for customers to reduce their energy usage and save money on their electric bills,” she says.