Wisconsin Public Service Corporation (WPS), a subsidiary of Integrys Energy Group Inc. recently filed a request for new utility rates in 2014 with the Public Service Commission of Wisconsin.
The proposed rates call for overall increases of 7.4 percent for electric and 5.6 percent for natural gas. The company’s electric rates have been relatively flat for several years and gas distribution rates have fallen.
If approved and applied equally to all rate classes, the new rates will result in an increase of about $5.78 monthly for typical residential electric customers using about 600 kilowatt-hours per month. Natural gas customers using about 800 therms annually would see a $3.64 monthly increase. According to WPS, these changes result in typical residential natural gas customers paying $3.89/month less than they did in 2008, not including the savings achieved from the lower prices WPS passes along when it purchases the gas for consumption (the 12-month rolling average total cost of distribution and gas prices has dropped nearly 45 percent from 2008). Also according to WPS, even with the proposed natural gas rate increase, typical residential customers will be paying less each month than they did five years ago.
WPS cited several accomplishments while holding rates nearly steady:
• Weston 4, a 500-megawatt supercritical coal unit, was brought on line in late 2008;
• the 99-megawatt Crane Creek Wind Farm became operational;
• WPS attained 100 percent compliance with Wisconsin’s Renewable Portfolio Standard currently and into the future;
• WPS maintained rates while paying higher costs of transmission infrastructure improvements-ATC rates; and
• WPS increased its spending for energy efficiency to levels above state minimums, without affecting industrial customers.
In its request to increase electric rates, the company cited a number of factors, including:
• completion of a one-time fuel refund to customers, which had the effect of keeping rates flat in 2013;
• the purchase and operation of the gas-fired combined cycle Fox Energy Center generating units;
• installation of environmental controls at the Columbia Power Plant near Portage (WPS is a co-owner of the plant);
• increased transmission costs;
• improved electric reliability by converting company distribution lines with lower performance history from overhead to underground; and
• general inflation.
Mitigating the increase, somewhat, are:
• lower purchased power capacity costs as a result of the expiration of the purchased power contract with Dominion, and the termination of the purchased power contract with the Fox Energy Center;
• a refund to customer rates resulting from the company’s electric decoupling plan; and
• lower employee benefit costs.
The requested natural gas rate increase is generally the result of decoupling, increased costs of inspecting natural gas lines for safety and inflation. WPS is allowed to recoup natural gas revenues if they fall below normal limits and refunds to customers if revenues exceed those limits.