September 24, 2014 – The Wisconsin Community Action Program Association [WISCAP] is among those expressing their opposition to the plans of three Wisconsin electric utilities to institute sweeping and regressive changes to how customers are charged for electricity usage.
Madison Gas & Electric, We Energies, and Wisconsin Public Service Corporation are proposing new rate structures that would fundamentally change how customers pay for electricity. Rather than residential utility bills being based primarily on how much electricity a customer uses, these large investor owned utilities want customers to pay a high fixed monthly fee just for being connected to the electric system, regardless of how much electricity they use.
Under the utilities’ proposals before the Public Service Commission of Wisconsin, MGE wants to increase its electric monthly connection fee from $10.44/month to $19.00/month, or 82%; We Energies wants to increase its electric monthly connection fee from $9.13/month to $16/month, or 75%; and WPSC wants to increase its electric monthly connection fee from $10.40/month to $25/month, or 140%.
“We oppose any shift of customer cost from rates to base customer charges,” said WISCAP Executive Director Bob Jones. “Fixed customer charges are regressive.”
“You aren’t charged a flat fee to shop at Woodman’s. What you spend is based on what you purchase,” he added.
WISCAP’s opposition to the regressive utility proposals is based on economic and environmental concerns, according to Jones. The utilities’ proposals will target low- and moderate-income customers, as well as those on fixed incomes. “The effect will be increased costs for low-income customers,” according to WISCAP. “Low-income customers will lose control over their energy bills and they won’t be rewarded with savings through energy efficiency.”
Jones adds that the incentive to conserve electricity will be lost for customers at all economic levels, since lower usage will have a minimal effect on total costs.
WISCAP opposes the proposed rate structures as harmful to energy conservation and weatherization efforts. “With energy costs consuming as much as 40% of a low-income household’s budget, the ability of that household to reduce their usage through energy efficiency – most notably weatherization – is of critical importance to their overall struggles to get out of poverty,” according to Jones.
As regulated entities, existing to advance the public good, electric utilities should be encouraging energy conservation and adjusting their business models to do so without putting their bottom line at risk. “Instead, they are taking the ‘easy’ way out by proposing this change to protect that bottom line, even at the cost of Wisconsin’s long-term environmental and economic health,” said Jones.
“Utilities already have protections in what they can charge and in authorized rates of return,” Jones noted. “They don’t need to further protect themselves to the detriment of low-income and fixed-income customers’ financial well-being – or at cost to energy savings.”
Formal testimony submitted on the behalf of WISCAP for both the MG&E and We-Energies cases can be found under “documents” on our website.