Wisconsin consumers may greet an unfamiliar sight next year: lower electricity rates.
Madison-area electric bills are set to go down a little bit next year under a new settlement negotiated between Madison Gas and Electric and several local non-profits.
The settlement follows a similar agreement reached in May between the Citizens Utility Board and Alliant Energy that keeps Alliant’s overall rates and the fixed customer charge unchanged for the next two years.
In a settlement reached between Madison Gas and Electric and local environmental, consumer groups and the UW, the company will decrease overall electric rates by nearly two percent next year – and hold them steady for another year after that.
MG&E says that the recent 2017 Tax Cuts and Jobs Act made that possible. They also plan to add two new solar farms, which they say will cost less to run than their existing coal plants.
MG&E spokesperson Steven Schultz notes the settlement was reached under new legislation that allows a utility to reach a settlement with a group representing homeowners or businesses before the Public Service Commission decides on approving it.
Schultz says,“This settlement process is kind of a new process that the Public Service Commission has put into place for rate cases. Something when we were working internally and figuring out what we would be looking at in terms of rate changes for 2019, 2020, wanted to work with the interveners and work together to see if we could come to a settlement agreement and that’s what we were able to accomplish, and that’s what we filed with the Public Service Commission.”
According to MG&E’s application, the company will be able to lower rates as it retires older fossil fuel power plants earlier than originally planned.
For example, the company’s Madison-area combustion turbines were originally scheduled to be closed by 2029 and 2032. They’re now set to be retired in just over two years, when MG&E hopes to have two new solar-generating facilities in service.
While MG&E left intact policies that may discourage consumers from installing their own renewable energy sources, RENEW Wisconsin’s Executive Director Tyler Huebner sees MG&E taking broader movement toward renewable energy.
Huebner says, “We were really pleased with this settlement because MG&E is not making any changes to how they treat people or businesses who want to put their own solar panels on their homes or businesses, so those policies will continue to be relatively strong, and yet at the utility-generation level they are starting this transition in earnest away from fossil fuel resources toward wind and solar.”
Tom Content is the executive director of the Citizens Utility Board of Wisconsin (CUB), a consumer-advocate group for residential and small-business customers.
While MG&E won’t change their fixed rates, CUB plans to work with the company over the coming months.
Per Content,“We’d love to see the fixed charges come down at some point. Politically, that’s not going to be happening in the current environment, but what we are doing is working with MG&E to come up with some innovative rate options that MG&E is going to unveil later this year we hope that would be alternatives to that fixed charge that could provide more incentives for conservation and energy efficiency .”
The state energy regulator will review the proposal after allowing the Sierra Club, the only stakeholder that did not sign on to the agreement, to weigh in on whether they support or object to it.
If approved, the proposed rate changes will take effect on January 1st next year. Your typical residential electric bill would go down $1.33 per month. Your average natural gas bill would go up 97 cents a month.