Consumer group sues Wis. electric rate regulators over discounts for industrial customers

Consumer group sues Wis. electric rate regulators

MADISON, Wis. — Wisconsin state regulators improperly approved electricity discounts for big businesses, a ratepayers advocacy group alleges in a new lawsuit.

The Public Service Commission last month formally approved Wisconsin Power and Light’s request to offer large-scale industrial electricity users discounts. WP&L officials hope the discounts will encourage more production and electricity use, bolstering the utility as the recession wears on.

The Madison-based Citizen Utility Board’s lawsuit, filed Friday in Dane County, argues the commission discriminated against residents and small businesses because they’re not eligible for similar discounts. The board maintains, too, that smaller customers will have to pay more to cover the discounts and control pollution as WPL generates more electricity for big-time users.

The lawsuit goes on to say the commission improperly denied the board’s demand for a hearing on WPL’s request. The panel also never explained why it didn’t open an investigation into the request or allow interested parties to intervene, even though state law requires an explanation, the lawsuit added.

“They just didn’t do the normal routine in cases involving rates,” said CUB Executive Director Charlie Higley.

Commission spokeswoman Lori Sakk would say only the commission stands behind its decision and would move to dismiss the lawsuit.

The panel voted 2-1 June 4 to approve the discounts. Under the plan, WP&L will provide up to $5 million in total discounts annually for large-scale commercial customers who move into the utility’s service area, existing businesses that expand and businesses considering leaving the state.

Companies can participate for five years, with rates increasing each year to current levels. A two-year sign up period began last week. Reigstad said no company has come forward yet, but WP&L doesn’t plan any changes because of the lawsuit.

“We feel like it’s a good program and the commission voted to go ahead with it,” Reigstad said.

The panel’s written decision noted the citizen board’s opposition and demand for a hearing. But the majority said the discounts amount to a rate decrease that won’t harm the board’s members. They called the board’s concerns over increased emissions from WPL plants “speculation.”

The commission didn’t have to grant a hearing because the process was informal, the decision said.

Lauren Azar, the lone dissenting commission member, wrote the panel deviated dramatically from its standard procedures in the case — “I do not know what it means for the Commission to handle a matter ‘informally’ while at the same time issue a formal Final Decision,” she wrote — and called the discounts a giveaway to businesses.

The discounts could indeed result in rate increases and the commission should have held a hearing, Azar said.

“The Commission,” she wrote, “applied an ad hoc, informal process that is highly unlikely to lead to the best possible result.”

Todd Stuart is the executive director of Wisconsin Industrial Energy Group, which represents large-scale energy consumers. He said he hadn’t reviewed the lawsuit closely, but he believes the discounts could help residential customers. The discounts could lead to more business, in turn generating more revenue for WPL and negating the need to raise rates, he said.

“The PSC,” Stuart said, “implemented this policy to stop the bleeding from the economy.”