Category Archives: Citizens Utility Board

Joint Finance hits energy-savings fund

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From the Citizens Utility Board:

Joint Finance Committee Cuts Energy Efficiency, Raises Energy Bills

MADISON — Today the Joint Committee on Finance unfortunately voted to reduce funding for Focus on Energy, Wisconsin’s statewide energy efficiency program.  

On a party-line vote, the Republican members of the Joint Finance Committee rolled back the  budget for Focus on Energy to about $100 million annually.
 
In November 2010, the Public Service Commission proposed new energy savings goals for Focus on Energy, along with proposed budgets to meet those goals.  The energy savings goals and budgets were approved by the Joint Finance Committee in December 2010, when the Democrats were in the majority.  The approved energy savings goals and budgets, along with estimates of savings to consumers, were:

With today’s vote, the finance committee is essentially imposing an energy tax on consumers by cutting investments in energy efficiency.  Because every dollar invested in Focus on Energy reduces energy bills for consumers by at least $2.50, these cuts will likely increase future energy bills by at least $800 million. 
 
In addition, these cuts in investments in energy efficiency will also reduce the number of jobs that would otherwise be created by Focus on Energy.  Focus on Energy will not be able to serve all the customers that desire energy efficiency improvements.  More than 2 million residents and businesses have saved nearly $2 billion on their energy bills since Focus was created in 2001.
 
The vote to cut investments in Focus on Energy is another step backward for Wisconsin households and businesses, who will face higher energy bills if these cuts are ultimately included in the biennial budget for 2011-2013.

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The Citizens Utility Board of Wisconsin is a member-supported, nonprofit organization that advocates for reliable and affordable utility service. CUB represents the interests of residential, farm, and small business customers of electric, natural gas, and telecommunication utilities before the Legislature, regulatory agencies, and the courts. Full disclosure: I’m on the CUB board, but the organization does not have anything to do with this blog.

WE Energies rate hikes blasted in PSC cases

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We Energies’ rates were not popular with ratepayers, even before the rates’ full impact kicked in this month after some cushioning credits expired, according to public comments filed with the Public Service Commission.

And the utility’s request for another 1.4% hike — the fourth sought or received in 2010 — has them steaming.

(Meanwhile, We has just declared a huge, 30% increase in its shareholder dividend and two-for-one stock split, according to the JS.)

“The question I wish to raise to the Public Service Commission regarding the WE Energies rate increase is: “What measures has WE Energies taken to reduce its internal business expenses such as staff salaries, benefits, pensions, etc. in addition to payments to shareowners of the company?” wrote Terrence Bolda, of Menomonee Falls. “Since I moved back to Wisconsin in 1988, I have never heard or read about any staff layoffs, pay freezes or reductions, pension reductions or other measures taken to reduce the cost of doing business. It seems that the utility is immune from these measures when everyone else (expect government) has been forced to take them. I request that you first demand WE Energies to do this before approving a rate increase of any kind.”

“Please do not allow this rate increase,” wrote Public Busier, of Salem. “We are hurting in Wisconsin and this increase will put even more of a burden on us. Please listen and help the people you serve.”

“I would like to file a complaint against WE Energies raising their rates,” wrote Suzanne Derge, of Neosho. “I am paying an average of $400. a month for electricity to my home and barn.This is not including the heat, just for electricity!!! Some months it has gotten as high as $500!!! This is ridiculous. We just can’t afford an increase. I used to be able to heat my old house with electrical heat and budgeted $165 (that was just 13 years ago).”

The comments were filed two cases pending before the Public Service Commission. In one, We Energies argues that its fuel rates went up more than expected, but did not seek a rate increase for 2010 beyond the total increase of $146.3 million it already won for the year. In the other, We Energies asks for a 1.4% rate increase to bring in another $38.4 million in 2011.

The comments show that many people from all over the We Energies service area are just fed up with handing money over to the utility. The Citizens Utility Board also is opposed to the PSC granting the full rate increase.

“More than 50 WEPCO customers filed comments in this docket; all of them opposed to the rate increase request, CUB said in a brief.

“Of course, few people are happy when utility rates increase, but that does not mean that those customers’ concerns should be dismissed,” the agency continued. “The difficulty in addressing the comments in this case is that those cases are confined to fuel costs where potentially offsetting decreases in other areas of utility operation are not examined.”

CUB is a member-supported, nonprofit organization that represents residential, farm, and small business customers of electric, natural gas, and telecommunication utilities before the Legislature, regulatory agencies, and the courts. Full disclosure: I am on the CUB board. This blog, though, is independent and CUB does not vet its contents.

“We Energies is a company that has a legal monopoly and never suffers unprofitable years,” wrote C. Ziffer, of Union Grove. “Its management is well paid already — astonishingly so to me, a professional who makes less than $40,000 a year. These rate increases ARE a hardship to people like me. In good conscience, if you do TRULY serve the public, DO NOT approve their request for a rate increase. If they truly need more money, they should pay the CEO less than the millions he currently makes.”

“Has WE ever attempted to cut back on expenses?” wrote Cheryl Kellerhals, of Kenosha. “Why do they advertise on the radio? We do not have a choice in our utility provider so there is absolutely no reason for them to advertise. How about some salary freezes for top level executives? The people subjected to WE’s outrageous rates have not received salary increases, salary bonuses, ESOPs, increased dividend income; some people are lucky to even have their job. Yet WE continues to cry about needing more of our money. For What? WE needs to cut back on expenses like the rest of us; better known as budgeting.”

“Please explain to the public how WE Engeries can report a huge record profit for 2009, yet you just granted them 2 increases this year,” wrote Linda Pfeiffer, of New Berlin. “Senior citizens did not get a SS increase this year. Many Seniors have frozen pensions – ie: what you get when you retire is fixed for life. Unemployed people are struggling to just survive – the working people are struggling with many other problems. YET – the President of WE Engeries had a pay that increased by 23% and says it is not paid by rate payers. This was donated by who? If the company has a record profit – and the President has a huge rate increase in bonuses – WHY was it necessary to raise rates?”

“I worked in construction for 45 years before I retired and over the years I feel the utility should have an efficiency review,” wrote Jack Brody. ” They send out two truck, six men to work on a transformer on a pole.  Two of the men actually do the work while the other four sit in the truck and drink coffee with the engine running. Before you think of giving them anymore raises you should ask them about this.”

You can read all the comments here and here.

Citizens Utility Board calls it correctly — again

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The Citizens Utility Board is fighting to keep your money in your pocket and not in the pockets of extremely well-paid utility executives. CUB issued this statement yesterday:

Consumers Should Not Pay for Million-dollar Bonuses for Utility Executives

Statement of Charlie Higley, Executive Director

The Citizens Utility Board calls on the commissioners of the Public Service Commission to make sure that consumers don’t pay for millions of dollars of bonuses, stock options, and other “incentive compensation” lavished on utility executives.

PSC Chairperson Eric Callisto and Commissioners Mark Meyer and Lauren Azar are considering making changes to administrative rules known as the “fuel rules,” which lay out a process by which utilities can change electricity rates when prices for coal, natural gas, or other fuels for making electricity unexpectedly change in price.

We urge the commissioners to include a provision that would prevent the utilities from manipulating the fuel rules in ways that would force utility customers to pay for millions of dollars of bonuses and other incentive compensation given to utility executives.

Combined, the incentive compensation given to the five highest paid executives at Alliant Energy, Madison Gas & Electric, We Energies, and Wisconsin Public Service Corp. in 2009 was $44 million, on top of salaries of $10 million.  The incentive compensation paid to these 20 utility executives was much larger than the entire 2009 budget of $28 million for the Public Service Commission, a state agency with about 150 staff.

Utilities should not be able to use administrative rules to force rate payers to pay for these outrageous bonuses, especially since the PSC routinely and rightly prohibits utilities from charging customers for incentive compensation in rates.

With many people out of work, and stagnant or declining wages for those with jobs, it would be worse than heartless for the PSC to initiate rules, or for the Legislature to approve them, that would build in a loop-hole allowing utilities to rob rate payers of millions of dollars to pay for executive bonuses.

CUB is a member-supported, nonprofit organization that represents residential, farm, and small business customers of electric, natural gas, and telecommunication utilities before the Legislature, regulatory agencies, and the courts. Full disclosure: I am on the CUB board. This blog, though, is independent and CUB does not vet its contents.

PSC ponders Internet phone regulation

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The Citizens’ Utility Board filed a request this week to intervene in a Public Service Commission investigation to determine just how much and what kind of regulation is appropriate for fixed Voice over Internet Protocol services.VoIP allow people to make phone calls over the Internet and has grown rapidly. This year, there are roughly 112 million VoIP lines globally, according to one estimate.

CUB contended in its filing that the commission’s determination in the case “will directly impact CUB’s members who subscribe to or may subscribe to interconnected VoIP services.”

This case will be interesting to watch, and there is a lot at stake for both customers and service providers.

The cable companies and telecoms are seeking input as well, with Verizon being the most aggressively against any sort of regulation thus far.

“Verizon Business contests this Commission’s jurisdiction to regulate any form of VoIP and/or IP-enabled services, and will argue that the “appropriate level of regulation for fixed, interconnected Voice over Internet Protocol (VoIP) services offered in Wisconsin” is none,” the communications giant wrote in its request to intervene.

Also seeking an in to the case are the Voice on the Net Coalition, which describes itself as a trade association; the Wisconsin Cable Communications Association, which says it is a trade association that includes Charter Communications, Comcast, and Time Warner Cable; Time Warner Cable Information Services (Wisconsin), LLC; and Northeast Communication of Wisconsin, Inc., a communications operator that does business as NSight.

It’s sure bet that CUB, which represents the interests of residential and smaller utility ratepayers, will have a very different outlook on the issues than the telecom firms, which, as anyone who ever subscribed to cable tv knows, do not necessarily give much of a rip about their customers or protecting them from outrageous fees and charges.

Full disclosure: I’m on the CUB Board. This blog, though, is independent and CUB does not vet its contents.

We Energies’ woes

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The JS’ Tom Content has an interesting story today about the mess at the We Energies Oak Creek power plant. In short, the plant doesn’t work for a lot of the time. (The good news is that the coal monstrosity’s nonfunctionality means it is polluting less.)

Ratepayers are paying significantly larger bills to pay for the problem-plagued plant. Yes, we get to pay truckloads of money for something that isn’t working yet! We Energies promises that the many fixes needed won’t hit ratepayers’ bills, too. From the story:

… customer groups remain troubled, and auditors at the Public Service Commission are looking into the problems as part of their audit of the company’s pending rate case.

The recurring problems raise the question of whether the utility should have accepted the keys to the plant when it did, said Charlie Higley, executive director of the Wisconsin Citizens’ Utility Board, which represents residential and small business customers.

“When you lease a car, you lease one that works. You wouldn’t want to pay for a car that’s not working under a lease arrangement,” Higley said. “That’s the same analogy that should be applied here. The ratepayers should not be paying for this plant until it’s properly operating.”

Higley has a great point. Why didn’t We Energies find the problems before it accepted the keys and turned on the juice? When did We Energies find the debris the story refers to? (Full disclosure: I’m on the CUB Board. This blog, though, is independent.)

 Can ratepayers get a partial refund on construction costs?

 

 

 

The story relies for perspective on Charlie Higley, executive director of the Citizens Utility Board, which represents mostly residential ratepayers before the Public Service Commission and in the courts. CUB is a small, statewide organization that relies heavily on donations from members.