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1909, 07 Nov 14

Public Service Corporation Tweaks Utility Rates

This is a sensible move.

Wisconsin Public Service Corporation, which serves about 443,700 customers in northeastern and north-central Wisconsin, had asked regulators for permission to raise its monthly fixed rate from $10.44 to $25 and reduce variable usage fees by a couple cents per kilowatt hour.

The utility said the increase was needed to ensure consumers who use less energy pay their fair share for maintaining infrastructure, such as transmission poles and power plants. Consumer advocates have countered the increase is designed to recoup revenue lost through conservation and punish low-usage customers.

The state Public Service Commission voted 2-1 to approve the request but limited the monthly increase to $9 rather than the $15 jump the utility wanted. Commission chairman Phil Montgomery and Commissioner Ellen Nowak voted to approve the package. Commissioner Eric Callisto voted against it, PSC spokesman Nathan Conrad said.

Together, the fixed rate increase and the hourly usage fee dip will translate to roughly a 3 percent increase in the average residential consumer’s annual electric bill, Conrad said.

If the rate structure were completely fair, the utility company would fund all of the fixed costs with a fixed fee. Just take all of the fixed costs and divide by the number of people connected to the grid. Then they would only use variable charges to fund the variable costs. But for utilities, the fixed costs are extraordinarily high. It would mean a pretty substantial bill even for a small shack with a single light bulb. So they use the variable usage fees to subsidize a lot of the fixed costs. This change gets it a little closer to being a bit more fair.


1909, 07 November 2014


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