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CapX2020 rates

Crews erect power line towers near Briggs Road in Holmen. The towers are part of a $550 million high-voltage transmission line project between Hampton, Minn., and Holmen known as CapX2020, and will connect existing 161-kilovolt lines belonging to Dairyland Power Cooperative to a new substation under construction on Briggs Road. Xcel is citing the the expense of such projects its justification of a proposed 3.2 percent rate increase.

Wisconsin regulators have set dates for public hearings and are accepting public comments on utility requests to raise prices, including Xcel Energy’s bid for a 3.2 percent electric rate hike.

The hearing for Xcel, which serves about 253,000 customers in western Wisconsin, is scheduled for Oct. 28.

Xcel has requested authority to charge those customers an additional $20.6 million in 2015 to help pay for investments in wind generation, power plant upgrades and investments in transmission lines — such as the CapX2020 project that will run from Alma to Holmen. About a third of the added expenses come from fuel and purchased power costs.

This is the sixth year running that Xcel has asked to raise rates. Last year the commission approved a 3.11 percent increase after Xcel asked for 6.5 percent.

In 2005, residential customers in Wisconsin were paying 7.6216 cents per kilowatt hour. Today they pay 12.675 in the summer, an increase of more than 66 percent. Winter rates have increased by about 50 percent.

For an average household, that means a $57 monthly bill has grown to $95 for the same amount of power.

Those increases have paid for replacing and refurbishing century-old coal plants, reducing emissions by about 90 percent, re-licensing three nuclear generators built in the early 1970s, and increasing renewable energy sources, said Donald Reck, Xcel’s regional vice president for operations in Wisconsin and Michigan.

“We’ve been able to do all that while at the same time keeping our rates competitive,” Reck said.

Reck said the current spending cycle should peak in the next two years.

“It is not unique to Xcel,” said Kira Loehr, executive director and general counsel for the Citizens Utility Board of Wisconsin. “If anything Xcel has managed generally to stay on the lower end of increases among utilities in Wisconsin.”

Wisconsin has the 13th highest residential electricity costs in the nation, according to data from the Energy Information Administration.

Loehr said Xcel has requested more frequent increases in recent years because of big transmission projects like CapX2020 and small ones in northwestern Wisconsin.

While Wisconsin rates have grown faster than the national average, the trend is similar across the nation.

Over the past 15 years there has been a five-fold increase in transmission project spending by investor-owned utilities, reversing a three-decade decline, according to an EIA analysis.

Driving these investments, according to the EIA, are a push for better reliability in the wake of a massive 2003 blackout; policies and incentives to use more renewable energy, which is typically generated far from population centers; a population shift to the south and west, where there’s more demand for air conditioning; an emerging wholesale market; and increased costs for the raw materials and labor to build these major transmission lines.

The CUB is an intervenor in Xcel’s current rate case, though Loehr said the group has yet to take a position on its merits. Because the PSC already approved the infrastructure projects driving the increase, she said it’s somewhat inevitable the commission will also give Xcel permission to pass those costs on to ratepayers.

Anyone unable to attend a hearing can submit comments in writing to have their opinions included in the public record.

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La Crosse Tribune entertainment and county government reporter

Randy Erickson covers arts and entertainment and county government for the La Crosse Tribune. Contact him at 608-791-8219 or randy.erickson@lee.net.

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