Protecting the bottom line with rate case interventions

WIEG’s efforts on behalf of large energy users has led to significant results: In 2018, Wisconsin’s investor-owned utilities requested a total increase of $5.2 million in electric and natural gas rates. WIEG intervened in these rate cases and helped the PSC turn the combined requests for rate increases to an overall rate decrease of $3.6 million. In the last seven years, investor-owned utility rate hike requests have been reduced by roughly two-thirds for a total of over $1 billion. In addition, WIEG has successfully advocated for new market-based industrial tariffs. In just a few years, these efforts have resulted in savings of more than $120 million versus standard industrial tariffs.

WEPCO base rate case (05-UR-109)

WEPCO base rate case application filed for a net increase of $83 million or 2.9% in 2020 and another 2.9% step increase in 2021. The electric increase is in the 3% to 4% range for a large electric customer. The actual electric increase requested is much larger ($223 million) and offset by the federal tax cuts and jobs act (TCJA provides $94 million in 2020 and $17 million in 2021). There were many proposed changes in the rate design, although notably the adders for both real time rates (RTP and RTMP) were left unchanged.There are currently many data requests regarding uneconomic dispatch, deferral & escrow accounting, System Support Resources (SSR) payments to the Upper Peninsula, and the Point Beach Nuclear Power Plant purchase power agreement (PPA). WEGO requested a net increase of $14.7 million or 3.9% and WG requested a net increase of $1.0 million or 4.5% for 2020. WEC Energy Group utilities are looking to raise costs on their natural gas transportation customers by double digits. WIEG has developed an ad hoc intervention group to fight the rate increases and improve rate design. Please contact us for more information on how to participate and mitigate your energy costs.

WPSC base rate case (6690-UR-126)

WPSC requested a net increase of $48.6 million or 4.9% for electric rates in 2020 and another step increase of 4.9% in 2021. Please also note an additional step/incremental increase of 5% in the second year (2021) combines for a double-digit electric increase, if approved, for many customers over two years. WPSC requested a $7.2 million or 2.4% natural gas increase in 2020 and a step increase of $7.1 million or 2.4% in 2021. The actual electric increase requested is much larger ($102 million) and offset by the federal tax cuts and jobs act (TCJA provides $16 million in 2020 and $24 million in 2021) plus other one-time offsets such as $21 million from the earning sharing mechanism and applying the $7 million refund of 2018 fuel cost over-collection. There were many proposed changes in the rate design, although notably the adders for both real time rates (NLMP and RTMP) were left unchanged. WEC Energy Group utilities are looking to raise costs on their natural gas transportation customers by double digits. WIEG has developed an ad hoc intervention group to fight the rate increases and improve rate design. Please contact us for more information on how to participate and mitigate your energy costs.

NSPW rate case/settlement agreement (4220-UR-124)

The PSC approved NSPW’s settlement agreement proposal for a two-year base electric rate freeze and a 4.6% natural gas decrease. In other words, there would be no change to electric base rates through December 31, 2021. If approved by the Commissioners, the rate case/settlement proposal would be a favorable end result for large companies. The PSC still needs to approve the fuel portion of this rate case in the fourth quarter of 2019.

WPL rate case/settlement agreement (6680-UR-121)

In late 2018, the Commission approved WPL’s settlement agreement/rate case using the framework of Act 136, the new settlement law. The settlement agreement established a two-year rate freeze with the potential for flat rates past 2020. WPL is holding its rates flat through 2020 at the same time the utility is bringing on-line the 716 MW natural gas-fired West Riverside plant. The settlement was approved by the Commission in a 3-0 vote. Savings from the federal tax cut and reductions in operating costs are among the reasons WPL was able to enact a rate freeze. The settlement agreement was a product of negotiations between WPL, WIEG and CUB.

MGE rate case/settlement agreement (3270-UR-122)

MGE rate case/settlement agreement reduced electric rates in 2019 by 2.24% and then frozen at that level in 2020. The rate case settlement reflected the continuing impact of the federal tax cut approved in late 2017 as well as declining fuel costs. The settlement resulted from negotiations with consumer groups, including WIEG.

Other regulatory initiatives include:

WIEG successfully sought an incremental load Real Time Market Pricing (RTMP) tariff for We Energies’ customers. Following this win, WIEG successfully worked for the adoption of a similar tariff (New Load Market Pricing, or NLMP) for both WPSC and WPL customers. 

WIEG also worked with WPSC and WPL to develop nominated load real time tariffs. WIEG negotiated changes to a WPSC tariff that is also called RTMP. Under the revised RTMP tariff, customers pay a $5.50 per MWh adder, but then pay day-ahead market prices.

A similar nominated load real time program was approved for WPL’s largest customers in the summer of 2017. The Day Ahead Market Pricing rider (DAMP) is now in place for qualified customers.

Together, these new tariffs help promote economic growth and development in Wisconsin, without shifting costs to any of the utility’s other customer groups. In just a few years, these efforts have resulted in savings of more than $120 million versus standard industrial tariffs.

Click below to view recent developments regarding these innovative tariffs:

http://psc.wi.gov/apps35/ERF_view/viewdoc.aspx?docid=183769

http://www.wisconsinpublicservice.com/company/wi_tariffs/rtmp.pdf

http://apps.psc.wi.gov/vs2015/ERF_view/viewdoc.aspx?docid=327314

Recent legislative initiatives include:

Industrial RRCs & waste heat recovery/waste heat to power

Industrial customers can create and keep renewable resource credits (RRCs) in Wisconsin, including from waste heat recovery projects. WIEG was instrumental in passing two new laws to help keep energy-intensive operations competitive in Wisconsin (2013 Act 300 and 2017 Act 53). Applications are now available on the PSC’s website.

https://docs.legis.wisconsin.gov/2017/related/acts/53

http://apps.psc.wi.gov/vs2015/renewable/default.aspx