Wisconsin residents would pay more than $500 million more for electric service next year under a slew of rate proposals that will be decided by state regulators this fall.
Proposed rates increases for next year range from 1.6% to 8.4%. However, there's an outlier: Wisconsin Public Service Corp., the WEC subsidiary that serves northeast Wisconsin, is proposing a 2.3% decrease.
In filings with the state Public Service Commission, the utilities cite the need to fund the cost of building solar farms and other renewable energy projects and investment in new natural gas facilities as key drivers of the increases. But in some instances, they also are seeking to recapture unexpected fuel costs, and some also are seeking to increase the return on investment, or profit, they are allowed to earn.
That rush of activity led the Citizens Utility Board of Wisconsin to ask PSC commissioners to stagger the rate cases to allow it to participate effectively as a consumer watchdog.
How much more you'll pay depends on where you live. Here's what we know about each utility's proposal.
We Energies seeks a small increase, WPS plans rate cut
The Wisconsin subsidiaries of Milwaukee-based WEC Energy Group are seeking the smallest changes among the investor-owned utilities, but that may be small consolation for residential ratepayers whose electric bills went up significantly this year.
The PSC in December approved new electric rates and a small drop in the utilities' allowed profit that resulted in this year's residential rate hikes of 11.2% for We Energies and 9.4% for Wisconsin Public Service Corp. The companies asked to keep the second year of their rate cases open due to uncertainty about fuel costs and to allow for cost adjustments for new energy projects that will be on line by the end of 2024.
A 2.9% rate cut proposed for WPS customers is the result of significantly lower natural gas costs that are partially offset by investments in renewable power generation and natural gas storage and power facilities that were previously approved by the PSC, WEC spokesman Brendan Conway said. Those investments have significant upfront costs, but are expected to save customers $2 billion over 20 years by producing less expensive electricity.
Tom Content, CUB's executive director, said the WPS rate proposal is the first to apparently deliver on that promise, provided natural gas prices don't increase again.
"The whole vision of the green energy transition from the utilities' point of view is what they've been calling 'steel for fuel' — we're going to replace fuel costs with the steel that we're using to build solar," Content said.
"This case is the first we've actually seen where this might actually be paying off."
We Energies, on the other hand, is proposing a 1.6% increase in residential rates. The key difference is an increase in the cost of the electricity the utility buys from NextEra Energy's Point Beach nuclear plant, Conway said. WEC Energy Group committed to buying power from the plant for 20 years when it sold Point Beach to NextEra in 2007.
Combined, the companies provide electricity for more than 1.5 million Wisconsin customers primarily in eastern Wisconsin.
Alliant's aggressive solar, battery plan drives largest proposed increase
Madison-based Alliant Energy is seeking a phased-in increase that would cost its 495,000 Wisconsin Power & Light electric customers an additional 8.4% next year followed by a 5.4% increase in 2025.
As a result, it will lose its status as the least expensive among the state's investor-owned electric service providers. The combined 13.8% increase is needed to cover the next two years of a transition to renewable energy that includes retiring older coal-fired generating plants while adding more than 1 gigawatt of solar energy and nearly 275 megawatts of battery energy storage.
"“We’re taking action now in order to best manage costs, increase resiliency and build a stronger energy future," JP Brummond, Alliant's vice president of customer and community engagement, said in a statement. "Nobody wants to see their bills go up, including us. However, there are more costs down the road if we do nothing or simply continue ‘business as usual.’"
CUB estimates the company has $2.3 billion in new solar, battery storage, and natural gas investments either already approved or pending before the PSC.
Combined with a request to cover last year's higher than expected coal and gas costs, Alliant's residential customers' electric bills could increase 19% more over the next two years, Content said.
As was the case with last year's WEC Energy Group rate cases, CUB will argue to bring Alliant's profit rate below its current level of 10%, he said.
Xcel Energy seeks increase in allowed profits
Xcel Energy the Minnesota company that serves 225,000 customers in northwest Wisconsin, is seeking rate increases of 7.8% for residential customers and 8% for small businesses.
The company also has proposed increasing its allowed profit to 10.25%, which would place it highest among the state's investor-owned utilities. A similar proposal was shot down last month by regulators in Minnesota, who set the utility's profit margin at 9.25%, up from 9.1%, CUB's counterpart in Minnesota unsuccessfully argued for a reduction.
"That's pretty bold, given the (PSC) sent the message that it was bringing down ROI in Wisconsin, with the WEC decisions," Content said. "Some might view that as an opening bid, but we'll certainly be active on that issue."
Madison Gas & Electric changes mirror other utilities
The smallest of the state's publicly-traded utilities, with 161,000 electric customers in Dane County, MG&E has historically charged more for electricity than its larger peers.
The utility is proposing residential rate increases of 3.8% next year and 4.5% the following year.
Like its peers, the increases stem from investments in solar power, battery storage and natural gas resources, and are partially offset by reduced fuel costs, some of which is driven by increased reliance on renewable energy generation.
This article originally appeared on Milwaukee Journal Sentinel: Electric rates are going up across Wisconsin. Here's what you'll pay