Wisconsin Public Service Corp. wants to increase electric, gas rates

From an article by Richard Ryman in The Northwestern (Oshkosh):

Utility says one reason it needs hike is people are conserving energy

Wisconsin Public Service Corp. is asking to raise utility rates by $6.25 per month in 2011.

The Green Bay-based utility said Thursday it filed a request with the state Public Service Commission asking for a 6.9 percent increase in electricity rates and a 1.2 percent increase in natural gas distribution rates. The utility calculates the rate hike would increase typical residential electricity bills by $5.31 per month and typical natural gas bills by 94 cents per month.

The company said decreased electricity and natural gas use because of recession and increased conservation and energy-efficiency efforts are the major factors in the request.

David Kyto, director of rate case process, said the utility has cut $36 million in expenses, but other fixed costs, such as repair and maintenance of electrical lines, natural gas pipes and substations, cannot be reduced. That reduction includes the elimination of 220 jobs.

"We simply can't cut back on the activities that make sure the lights come on when the switch is turned and the furnace operates when the thermostat calls for heat," Kyto said.

The utility is in the midst of a four-year pilot program using decoupled rates. Under decoupling, the utility is guaranteed a set amount of revenue in return for enacting conservation measures and encouraging its customers to do the same. Decoupled rates apply to residential customers and small commercial customers, but not to large industrial users.

The Public Service Commission approved the decoupling mechanism because it reasoned that utilities would have no incentive to encourage consumers to buy less electricity and gas if they weren't guaranteed a set amount of revenue if sales were less than projections.