Consumer groups say Wisconsin utility regulators are obscuring the state’s high electricity prices in a new evaluation of supply and cost.
Specifically some advocates are taking issue with how the Public Service Commission addressed rates in a draft of the latest Strategic Energy Assessment, a document the commission is required by law to address the adequacy and reliability of the current and future electricity supply.
For the new edition, which covers expected conditions through 2024, the PSC expanded its examination of cost “to provide a broader context to Wisconsin’s electric rates,” focusing less on rising rates and more on bills, which have remained relatively stable as overall demand has flattened in recent years.
Wisconsin electric bills also compare more favorably to other states where electricity usage is higher. The average Wisconsin household in 2016 used about 15 percent less electricity than the overall region, while paying about 1 cent more per kilowatt hour, according to the U.S. Energy Information Administration.
That shift drew praise from utilities but not consumer groups like the Citizens Utility Board, which represents the interests of residential and small commercial ratepayers.
“While reductions in average usage per customer have contributed to average residential electric bills remaining relatively flat, CUB remains concerned that continued increases in electricity prices will cause utility bills to exceed those of nearby states and the Midwest average,” the group wrote in comments to the PSC.
CUB argues that it may be difficult to continue the reductions in use as “low hanging fruit” measures are used up and notes that electricity rates will become even more important as electric vehicles gain market share and electricity replaces fossil fuel in other uses.
Overall Wisconsin customers pay about 10 percent more for electricity than the Midwest average, and residential customers are hit the hardest.
Industry groups also called attention to their rates, which on average are the highest in the Midwest and can account for more than half of the operating costs for some companies.
“Energy is a major cost of doing business, and its affordability can help or hinder job creation, particularly when those costs are greater than energy costs in neighboring states and other areas of the country,” states the joint comment from the Wisconsin Industrial Energy Group and the Wisconsin Paper Council.
Other comments submitted before Wednesday’s deadline focused on how the PSC accounts for distributed energy, such as rooftop solar, rising transmission costs associated with projects like the $580 million Badger-Coulee line under construction between La Crosse and Madison, and the need to replace some 2,100 megawatts of generation expected to retire in the coming years.
The three-member commission has not set a date to consider adopting a final version.
The most pointed critique came from national groups representing customers and energy suppliers who advocate eliminating the vertical monopoly model used in Wisconsin.
“The Draft SEA 2024 does not confront the unpleasant reality that Wisconsin experienced the second highest percentage increase in overall … average electricity prices in the contiguous United States over the past two decades,” the Professional Energy Association and the Retail Energy Supply Association wrote in joint comments.
They note that Illinois, which in 1997 passed a law allowing consumers to choose their electricity supplier, had the lowest increase in average electricity prices over the past decade.
The organizations say the assessment “misses the point” on pricing and fails to “come to grips” with the law’s requirement to assess the extent to which competition is contributing to a “reliable, low-cost and environmentally sound source of electricity for the public.”
“If the final SEA is to be a strategic document,” the comments state, “then a strategy for addressing Wisconsin’s electricity price problem should be discernible.”