The public will have a chance to weigh in next month on the company’s proposal to raise energy prices for some 257,000 Wisconsin ratepayers.
The Minnesota-based utility has asked Wisconsin regulators to approve a 3.6 percent increase in electricity revenues for 2018 and a 10 percent hike for natural gas. If approved, that would translate into about $6 more per month on the average residential electric bill and $5.31 more for gas.
Wisconsin’s Public Service Commission, which sets rates for investor-owned utilities, will hold a public hearing on the request Oct. 25 in La Crosse. Public comments can also be submitted online.
PSC staff have recommended more modest increases of 1.6 percent for electricity and 8.2 percent for gas, but it will be up to the three-member commission to determine the rates, which are structured to give the company a return on its investments. Xcel has requested to maintain its current 10 percent profit margin.
The Citizens Utility Board, a nonprofit organization representing the interests of residential and business ratepayers, has argued that 9 percent would be more fair and in line with national trends. Minnesota’s regulators capped Xcel’s rate at 9.2 percent.
CUB executive director Thomas Content noted the PSC earlier this year set Madison Gas & Electric’s return rate at 9.8 percent, the first time in more than 40 years any Wisconsin utility has been held below 10 percent.
Included in the electric request is a 21 percent increase to the $14 fixed monthly fee charged to all residential customers, which the CUB opposes on the grounds that it’s unfair customers who use the least energy and that it discourages energy savings.
“We want to hold the line to prevent low-use customers from seeing a big increase, particularly given that the increase being sought on the gas side this year is so substantial,” Content said.
Xcel proposed increasing the flat fee from $8 to $18 in 2016. The PSC ultimately raised the monthly charge to $14 over opposition from clean energy and consumer advocates and hundreds of customers.
Content notes that Wisconsin regulators have generally granted much larger fixed-rate increases than other states.
Xcel said the electric rate increase is necessary to support its infrastructure investments as well as lower than expected demand.
According to the company’s filing, 2016 electricity sales were about 6 percent below forecast, a trend Xcel expects to continue through next year. Xcel cites a continued decline in residential use as well as recent dips in the commercial and industrial customers — especially in the industrial sand and oil sectors.
More efficient appliances and lighting as well as slowing population growth have slowed the residential sector growth.
Among the primary cost drivers are a new natural gas peaking plant in the Twin Cities and upgrades to its Prairie Island nuclear plant and two aging hydroelectric plants.
The natural gas rate increase is driven by investments in the distribution system as well as ongoing cleanup costs of the company’s former gas plant in Ashland, Wis.
Since 2006, Xcel has sought to increase electricity revenues by an average of 6.4 percent each year. The PSC granted all but one, allowing an average hike of about 3.7 percent. In the same time frame, the company sought to increase natural gas revenue seven times by an average of 4.5 percent. The PSC approved six, granting the company on average about 60 percent of what it asked for.
The average Xcel residential electric bill in 2017 was just over $100, according to data from the PSC. That’s lower than all but one of the state’s largest investor-owned utilities.
Have your say
WHAT: Public hearing on Xcel Energy’s proposed gas and electric rate increases for 2018
WHEN: 3 p.m., Oct. 25
WHERE: La Crosse Public Library, 800 Main St., La Crosse
ETC: Public comments can be submitted online through Oct. 26