How are MGE prices set?
MGE's rates are set on normal operating expenses such as labor, fuel and a return on capital investments.
The Public Service Commission of Wisconsin (PSCW) regulates the rates we charge customers. When we request a rate change, the PSCW reviews our request. Based on a PSCW audit and public hearings, the PSCW sets MGE's rates for a specific amount of time—usually a year.
During that time, your electric rates may be adjusted. If the cost of fuel (natural gas and coal) used to generate electricity increases over a threshold level within that year, the PSCW can increase your electric prices with a fuel surcharge. If the cost of fuel declines, the PSCW can decrease prices or provide a refund with a fuel credit.
There are differences between natural gas and electric bills:
• Electric rates include the costs to produce, purchase and deliver electricity. The cost of fuels is figured into the rates you pay. Natural gas and coal are the primary fuels used to produce electricity. Increasing or decreasing fuel costs can impact the price you pay for electricity.
• For natural gas bills, the commodity cost of natural gas is passed through to customers without any markup. The supply charge fluctuates monthly depending on the current price of natural gas and how much gas is used. MGE charges for its services of bringing natural gas to your business—the transportation, pipes, meters and more. The PSCW reviews and adjusts this distribution charge during our rate process.