ENERGY Newsletter

Energy Rates Are Likely To Go Up Next Year
(Energy News - July 2010)

WPS Implements Cost-Saving Measures

Businesses should expect energy costs to increase next year. WPS recently asked state regulators to approve an electric and natural gas rate increase for 2011. If approved, the new rates are expected to take effect in January.

WPS requested a:

WPS worked proactively to help reduce the rate increase by making workforce reductions and spreading the cost of facilities and equipment over longer periods of time.

Driving Factors

WPS has not increased overall Wisconsin retail electric rates since July 2008. However, energy use has been dropping, a pattern that is expected to continue. Residential electric and gas use for 2011 is projected to be about 10% less than in 2007. Dropping sales in all sectors is the primary reason for the rate increase.

It may be difficult to understand the idea of increasing rates to help offset lower energy use. However, it is important to keep in mind the high fixed costs of a regulated utility like WPS. These include maintaining and repairing more than 22,000 miles of electric lines, 10,000 miles of gas pipes and additional facilities.

"It is our job to ensure a safe, reliable electric and gas supply for customers," said Dave Kyto, Director of Rate Case Process for WPS. "We cannot cut back critical activities that make sure the lights turn on or the air conditioning starts up when called for."

Increased support for energy conservation is another factor in the higher rate. A decoupling program launched in 2009 allows the recovery of some lost revenue from reduced sales related to conservation and weather. WPS also increased its funding for energy efficiency programs administered through Focus on Energy.

Customers should understand that managing energy use is still a wise strategy. It is good for the environment, helps control bills and delays the need to build expensive utility infrastructure.

For More Information

View more information about the rate increase, or contact the Business Solutions Center at 877-444-0888.