Municipal Leaders, Residents, Environmental and Consumer Advocates Raise Concerns at Hearing on Proposed MGE Fees

MADISON, WI -- Advocates and concerned residents testified today before the Wisconsin Public Service Commission (PSC) to raise serious objections to the proposed rate increases filed by Madison Gas and Electric (MGE). MGE’s request proposes to perpetuate and expand regressive utility rates the Walker administration approved that undermine conservation, charge lower use customers higher bills, and pose a specific harm to low income customers.  The Walker-era rates are among the worst of the worst nationally in setting the amount of every bill that is “fixed”--meaning customers cannot control their bill or reduce their charges by using less energy.  

“The Public Service Commission needs to take action with MGE’s rate case. Approving MGE’s rate settlement creates unreasonable barriers to clean energy, and puts an Evers Administration mark of approval on one of the highest fixed charges in the country. This use of a fixed charge, rather than billing customers based on how much energy they use, means customers have less control over their bills and less incentive to save energy as the fixed charge goes up. As we see the effects of climate change continue to negatively impact our environment and our community, I think the worst thing the Public Service Commission could do is continue to approve this archaic system,” said Meghan Pierce, a Sierra Club volunteer and Madison resident.

Utility rates typically have two parts: a “fixed” part that is paid regardless of how much is used and a part that depends on usage. These parts always move in opposite directions-- as the PSC increases one it decreases the other.  Customers only have control over the usage based charges and can only avoid those through energy efficiency, conservation, and rooftop solar.  When the PSC sets a high fixed charge, the customer loses control over her bill and the less she is able to save by turning down the thermostat, putting on storm windows, or investing in solar.  Wisconsin law dictates that the PSC must maximize conservation, efficiency and renewable energy through its rate decisions.  Sierra Club is asking the PSC to do what the law requires: set rates that put MGE’s fixed charges back in line with most other utilities in the country and will give customers more control, smaller utility bills, cleaner air, and more local jobs.

Historically Wisconsin regulators only allowed fixed charges that, at most, covered the cost of connecting a customer. Under Governor Walker, Wisconsin utilities, including MGE, began collecting more costs through the fixed charge and less through the charges based on how much energy a customer uses.  In fact, MGE’s rates are among the worst in Wisconsin, which has some of the worst rates in the nation.  For consumers this shift means that individuals cannot take control of their bills by taking steps like turning off lights, running appliances at night, or installing solar. In the midst of a public health and economic crisis, Wisconsinites are facing unprecedented obstacles when it comes to making ends meet.

“MGE's high fixed fees continue to financially harm the elderly and people with disabilities in its service area. With the growing income disparities, and the current COVID pandemic, our elderly citizens are already struggling to pay their monthly utility bills and all too often, have to cut their medication in half or skip a meal, in order to pay their monthly utility bills,” stated A.J. Nino Amato, Board Member of the Coalition of Wisconsin Aging Groups (CWAG). “We know for a fact, that Seniors on fixed income monitor their electricity use closely in order to control their bills and MGE’s radical fixed fees are unfair and creates a hardship for them.” 

“MGE plans to maintain their outrageously high fixed-charge fees that disproportionately burden the small, low-income households already hardest hit by COVID-related economic challenges. These high fixed charges didn’t make sense when they were first approved by the Walker PSC, but they make even less sense from an Evers PSC in a world where colliding crises have revealed Wisconsin’s dramatic social inequities. MGE might think a global pandemic is the right time for business as usual but I say we must use the massive disruptions of 2020 to envision a better, more equitable future. Re-implementing industry-standard fixed rates is an achievable step toward that future,”said Victoria Gillet, MD, a Sierra Club Volunteer.

In addition to consumer concerns, environmentalists are calling MGE’s proposed settlement more of the same from a utility that has been slow to respond to the climate crises and a missed opportunity to meet the climate goals set by municipalities and a growing number of community leaders.

Madison is one of five municipalities in MGE service territory that has committed to a goal of 100% clean energy. Without buy-in from the utility it is unlikely that municipalities will be able to follow through with these commitments. If the PSC approves the proposed settlement, it would effectively bless MGE's request to burden ratepayers with a regressive rate structure and power generated by expensive coal plants like the Columbia power plant in Portage.