We Energies is seeking a $240.7 million increase in its revenue requirement for its southeastern Wisconsin electric utility that would take effect in 2025 and another $177.9 million for rates taking effect in 2026.
The request, filed with the Wisconsin Public Service Commission, amounts to a 6.9% increase in 2025 and another 4.6% increase in 2026 for Wisconsin Electric.
For the average residential customer, the increase would add $10 to $11 to their monthly bill in 2025 and another $7 to $8 per month in 2026. The average bill in 2024 is around $122 per month compared to a national average around $142. The exact impact on residential, small business and industrial customers will be determined in the PSC rate case process.
The increase comes after a 2.3% increase in 2024, 9.2% in 2023 and 4.2% in 2022. Since 2015, the average Wisconsin Electric increase has been 1.7%.
Other We Energies utilities are also seeking increases. Wisconsin Electric – Gas Operations is seeking a $57.5 million or 10% increase for 2025 and $31 million or 5.1% for 2026. Wisconsin Electric’s downtown Milwaukee steam utility is seeking a $2.5 million or 8.5% increase for 2025 and no increase in 2026. Wisconsin Gas is seeking a $67.7 million or 8.2% increase in 2025 and $30.6 million.
Combined, the We Energies utilities are seeking increases of nearly $608 million over the next two years.
Wisconsin Public Service Corporation, another WEC Energy Group utility serving the northeastern part of the state, is also seeking increases totaling $217 million across electric and gas operations for the next two years.
The requests for rate increases drew criticism from groups representing large manufacturing companies, small businesses and residential consumers.
“Wisconsin’s ratepayers simply can’t afford additional cost burdens,” said
Todd Stuart, executive director of the
Wisconsin Industrial Energy Group, an organization made up of the state’s 25 largest energy users.
Stuart called on the PSC to drastically reduce the We Energies increase during the rate review process.
“If you want to move the needle on economic development and jobs, then getting rates under control should be at the top of the list,” Stuart said.
We Energies officials contended industrial user rates in southeastern Wisconsin are around 7.8 cents per kilowatt hour compared to a Midwest average of 8.1 cents. WIEG says Wisconsin Electric rates for large industrial users are 9.76 cents per kWh and the Midwest median is 7.91 cents.
“When we talk to customers that are looking in our area, everyone of course considers costs, they look at costs just like everyone else does, but reliability is key for them,” said
Scott Lauber, chief executive officer of WEC Energy Group.
The rate request also includes a proposed increase in Wisconsin Electric’s return on equity from 9.8% to 10%. While the change is not a major driver of the overall increase, Lauber emphasized its role in the company’s larger strategy.
Having a solid capital structure really helps when you have to go borrow money, that interest expense would be higher otherwise,” he said. “$3 million of our rate increase is very small, but the benefits of having a good credit rating and a quality capital structure is also helping us on our interest expense.”
Tom Content, executive director of the
Citizens Utility Board of Wisconsin, a group representing residential and small business customers, said WEC Energy Group’s shareholders have done well over the past 20 years while customers are dealing with rising costs.
“Shareholders of WEC Energy Group have enjoyed profits that are the highest in the state and well above the national average. High profits drive up costs and cry out for a more balanced approach that keeps the concerns of customers paying the bills top of mind,” Content said. “Saddling hundreds of millions of dollars of additional costs on customers who are already paying among the highest prices in the Midwest for electricity is something the Public Service Commission will need to evaluate very carefully.”
Across all of the utilities, the increases are broadly driven by investments to transition power generation toward renewable sources while also maintaining reliability. Wisconsin electric was approved to invest $1 billion between 2020 and 2023 and plans to invest more than $3 billion more between 2024 and 2027.
Also, the energy sector has not been immune to inflationary pressures seen in the broader economy. WEC Energy Group officials noted the PSC had increased the threshold for projects requiring regulatory review by 31% since 2022 as costs have increased.
Just under 70% - roughly $167 million - of the Wisconsin Electric increase for 2025 is being driven by new generation projects the PSC already approved.
Those projects include the Darien and Koshkonong solar projects, the Paris solar and battery storage project, 75 megawatts of smaller “distribution level” solar projects and the 100-megawatt West Riverside natural gas project.
Another $113 million comes from increases in Wisconsin Electric’s day-to-day operations and maintenance costs. Within those costs, about 60% is aimed at repairs, preventing storm damage or maintaining generation.
Other drivers include almost $34 million for bad debt and $31 million for increasing cost of capital.
Participation in We Energies’ low income forgiveness tool has grown from around 1,000 at the end of 2020 to more than 36,000 at the end of 2023. Eligibility for the program expanded after a 2021 agreement with the Citizens Utility Board of Wisconsin. While the cost of the program has increased, We Energies officials said they have seen savings in other parts of operations like call centers and disconnections.
We Energies also said its rate request for 2025 was lowered by around $50 million because of higher anticipated electric sales. Total retail and wholesale sales are expected to be up 3.6% in 2025 compared to weather normalized sales for 2023. For 2026, the forecasted increase is 13.4%.
The utility also opted to accelerate its use of certain deferred tax benefits to reduce its revenue requirement by around $28 million. In addition, the company’s investments in renewable projects turn what would have been a roughly $30 million increase from taxes into a $20 million decrease in the request the utility is making.
