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Monday, December 1, 2014

Public Service Commission Approves Higher Fixed Charges for Madison Gas & Electric Customers


In a 2-1 decision on Wednesday, November 26, 2014, the Public Service Commission approved Madison Gas & Electric’s request to increase monthly fees for all customers starting in 2015. 
For residential customers, electricity service will cost $19 each month before using any energy, and natural gas service will cost $21.87 each month before using any gas.  For a residential customer with both electricity and gas, monthly fees will go from $22.61 up to over $40.

Commissioners Phil Montgomery and Ellen Nowak, as they have for Wisconsin Public Service and We Energies in recent cases, supported these changes, while Commissioner Eric Callisto disagreed and would have limited these increases while opening a broader discussion on the topics.

A number of decisions were reached on these issues, which are outlined below:
·      Overall residential customers for electricity will see on average an increase of about 3.5%. Small commercial customers will have an increase of about 1%, while larger business and industry customers will see a higher increase of around 4%.
·      Fixed monthly charges for residential electricity service will be $19
·      Fixed monthly charges for residential natural gas service will be $21.87
·      Customers with existing solar and small wind systems will be “grandfathered” under the current rates for 12 years
·      Customers who subscribe to “Green Power Tomorrow,” the voluntary program where customers pay extra to participate in renewable energy projects, will pay less for that service.  The premium price will be reduced from 4 cents per kilowatt-hour down to 2.44 cents per kilowatt-hour.
·      Chairperson Montgomery offered some advice to MG&E on the collaborative process they intend to have with customers and communities they serve.
o   MG&E should look at instituting extra fees on customers with solar and other forms of “distributed generation” and reducing the payback, as We Energies proposed (and was approved)
o   MG&E should institute monthly “netting” of distributed generation
o   Approaches such as the “value of solar” are not needed because the current wholesale market sets the price. 
o   Any extra electricity created, but not used, by those distributed generation systems should be paid at the wholesale market price, which is in the range of four cents per kilowatt-hour, instead of being credited at retail rates which are closer to 13-14 cents. 

The Commission voted not to approve a separate arrangement that would shield low-income customers from these fixed rate hikes.  Therefore, all customers will be exposed to the fixed rate increases in 2015.

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