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Big Wisconsin energy users get rate hike breaks

MILWAUKEE — Big energy users in Wisconsin are getting breaks on rate increases at the expense of other businesses and homeowners.

The move is meant to foster Gov. Scott Walker's job creation goals, Phil Montgomery, chairman of the Public Service Commission, told the Milwaukee Journal Sentinel for a story published Sunday ).

"Is it by design? Yes. We believe it helps in job creation," said Montgomery, a Republican former state representative from the Green Bay area who is one of two Walker appointees on the three-member panel that regulates utility rates in Wisconsin.

"It's been a goal of this governor to help every way we can in job growth and creation, and we viewed that, in the setting of the rates, that if we can come up with a fair mix for all that helps job creators, then that's a good thing," Montgomery said.

In rate cases finalized last month involving utilities in Milwaukee, Madison and Eau Claire, large manufacturers received smaller percentage increases than homeowners and other businesses, the newspaper reported. For example, We Energies was granted an overall electricity rate increase of 4.2 percent for 2013, but large companies got only a 3% boost while homeowners and small businesses got rate increases of at least 5 percent.

Those decisions came on top of discounts already in place for the nearly 900 largest energy users in the state. Those discounts originated from a 2005 law that capped how much they have to pay to support Wisconsin's Focus on Energy program, which provides energy-efficiency incentives and funds for renewable energy projects. By the end of 2013, those companies will have paid at least $68 million less on their electricity bills since 2010 because a "temporary" cap that was written into the 2005 law remains in place.

A manufacturers' group says the discounts and the lower rate increases are justified because Wisconsin has higher electricity rates than surrounding states and because manufacturers are facing a brutally competitive landscape.

"After making billions in investments in new infrastructure in the last decade, Wisconsin's electric rates have gone from some of the lowest in the country to among the highest in the Midwest," said Todd Stuart, executive director of the Wisconsin Industrial Energy Group. "Wisconsin is a manufacturing state and manufacturing is energy intensive. Energy costs have an impact on Wisconsin companies being competitive nationally and globally."

Homeowners and renters shouldn't have to bear the burden, countered Charlie Higley, executive director of the Wisconsin Citizens' Utility Board.

"While we understand the need to ensure Wisconsin businesses remain competitive, these higher rate increases put more burden on residential customers during this tough economy," Higley said.

PSC Commissioner Eric Callisto, who chaired the commission under Democratic Gov. Jim Doyle, opposed the breaks for large manufacturers, saying the commission unnecessarily pushed up rates for other businesses.

Wisconsin's electricity rates in 2012 were above the national average and second-highest among eight Midwest states, both for residential and industrial customers. At 13 cents per kilowatt-hour, Wisconsin's residential rates were about 12 percent above the national average, while industrial rates averaging 7.5 cents a kilowatt-hour were 11 percent above the U.S. average.