We Energies projects big rate jumps

From an article by Tom Content in the Milwaukee Journal Sentinel:

Electricity bills for We Energies residential customers would jump 4.9% in 2010 and another 4.5% in 2011, according to projections the utility filed with state regulators.

Under the utility's plan, overall rates would rise 2.8% next year - with $76.2 million in increases linked to costs of building power plants and transmission lines, plus higher pension costs.

The utility says the new power plants will help Wisconsin's economy because We Energies will no longer need to buy more expensive power from other power plants in the Midwest.

"We need to get these units online to lower our purchased power costs," said Gale Klappa, chairman of We Energies.

Bills also would increase because the credits customers receive from the 2007 sale of the Point Beach nuclear power plant are ending.

In 2010, the drop in those credits would mean a 2.1% increase in residential bills. Although the utility is proposing no rate increase for 2011, bills would rise 4.5% that year because the Point Beach credits will have ended.

For a residential customer using 600 kilowatt-hours of electricity a year, the annual electricity bill would grow to $957 next year, an increase of $45 from this year. Another jump, $43, can be expected in 2011.

The proposal comes as the economy is in a severe recession, a time of rising unemployment and falling personal incomes.

"Any increase is harmful to ratepayers in a recession," said Charlie Higley, executive director of the Wisconsin Citizens Utility Board, a consumer group that challenges utilities on price increases.