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PSC: Three Wisconsin Utilities Must Refund Millions to Ratepayers

July 7, 2016 By Cheryl Kaften

Three Wisconsin utilities – Madison Gas & Electric, WE Energies, and Xcel Energy – have been ordered by the state’s Public Service Commission to refund millions of dollars to their ratepayers in restitution for overestimating costs last year.

The utilities must estimate the cost of providing electricity to customers for permission to raise annual utility rates, Xcel Energy Spokesperson Chris Oulette told Wisconsin Public Radio in a recent interview. Last year, Xcel’s costs were $9.5 million lower than predicted and the state Public Service Commission ordered the money be paid back to customers.

WE Energies and Madison Gas & Electric face similar situations, the news outlet said. They each expect to refund around $16 million to their customers.

The overpayments occurred largely because the cost of natural gas fell during 2015, making it significantly less expensive than the utilities had anticipated. Indeed, Xcel notified the commission during 1Q2016 that, according to its records, Wisconsin ratepayers had overpaid by 7 percent per kilowatt-hour, the variance between electric rates approved in advance and actual fuel costs.

At first, Xcel balked at the repayments.”We agreed with the amount for the over-collection, but we had reached an agreement with several customer stakeholder groups to use the refund amount to offset our proposed 2017 electric rate increase,” Oulette said.

However, the PSC declined and ordered refunds be made as soon as possible.

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