2023 Rate Case
MGE’s rate filing for 2024-2025
MGE takes seriously our responsibility to provide safe, reliable, affordable and sustainable energy. We are sensitive to the impacts our costs have on our customers, especially our customers who struggle to meet essential needs. We continue working hard to contain costs throughout the organization while advancing cleaner energy for the benefit of all our customers. As your community energy company, MGE considers the well-being of our community and those we serve a primary focus of our company.
This spring, MGE filed a request with the Public Service Commission of Wisconsin (PSCW) to adjust electric and natural gas rates in 2024 and 2025. The request also includes proposals for new and updated customer programs and services, including an Energy Customer Assistance Program, which is in addition to our ongoing efforts to help vulnerable customers. The PSCW is reviewing the rate case and is expected to make a decision on it later this year.
Energy affordability, or energy burden, is important to MGE. It is an issue that we have been working to address and that we will continue to address and manage as we transition our energy supply to cleaner sources. We're working to achieve greater sustainability and to manage long-term costs by growing our use of carbon-free, renewable energy, which carries no fuel costs and serves to reduce rate volatility and manage long-term costs into the future.
A cleaner, smarter grid is part of our strategy for working together with our customers to achieve our goals of at least an 80% reduction in carbon emissions by 2030 and net-zero carbon electricity by 2050. By 2030, we expect every MGE electric customer will have 80% fewer carbon emissions from their electricity use simply by being an MGE customer.
The following address elements of our rate case pending before state regulators.
This is an ongoing case, but as of today, under our proposal, which has been adjusted since the original filing to reflect lower anticipated fuel costs, MGE is requesting a 1.5% electric rate increase in 2024. We haven't yet finalized the rate design for 2025 but expect an increase of about 1.9% in 2025. Ultimately, the PSCW will decide the appropriate increase.
If approved, a typical residential customer using 500 kilowatt-hours (kWh) a month will see a bill increase of about $3 a month in 2024.
Under this proposal, the average annual impact on MGE's electric rates over the last ten years (from 2016 through 2025) will be a 1.2% increase, which is below the rate of inflation.
This is an ongoing case, but as of today, MGE is requesting a 2.27% natural gas rate increase in 2024. We haven't finalized the rate impacts for 2025 but expect an increase of about 1.26% in 2025. Ultimately, the PSCW will decide the appropriate increase.
If approved, the typical natural gas bill, reflecting 715 therms used annually, will see a monthly increase of about $1.50 in 2024.
Under this proposal, the average annual impact on MGE's natural gas rates over the last 10 years (from 2016 through 2025) will be a 1.4% increase, which is below the rate of inflation.
Impacts for nonresidential customers would vary by rate class.
MGE works to contain costs to provide energy at reasonable rates. Our electric grid continues to evolve. The proposed increase in electric rates supports investment in a cleaner, smarter, more integrated and advanced grid, which includes:
- Investments in solar
- Investments in the West Riverside Energy Center to help ensure continued reliability
- Continued grid modernization projects
The request also covers the collection of escrow accounts for uncollectible costs, including costs related to COVID.
MGE is committed to the safe and reliable delivery of natural gas to serve our customers. The proposed increase in natural gas rates includes continued investments in system modernization projects to maintain a safe and dependable system. It also includes the collection of escrow accounts for uncollectible costs, including costs related to COVID.
Energy affordability, or energy burden, is an issue MGE has been working to address and is one that we will continue to address and manage as we invest in a cleaner energy future to benefit all customers. We work hard to keep our rates manageable and keep any increases at or below the rate of inflation.
In addition to our existing, ongoing efforts to help vulnerable customers, MGE is proposing a pilot Energy Customer Assistance Program to assist with energy affordability and energy efficiency opportunities for qualified residential customers.
Participants would receive an incentive to participate, would be engaged by MGE and would be provided with information about opportunities to participate in energy efficiency programs to assist with energy affordability.
The proposal calls for a four-year pilot period to get the program established and to study its impact. MGE customers who receive benefits through the Keep Wisconsin Warm/Cool Fund would be eligible initially.
MGE also continues to offer customers who are experiencing economic hardship flexible payment arrangements, and we continue to connect customers to resources for assistance in the community.
MGE is proposing a third customer option for Green Power Tomorrow (GPT). This new option would automatically tailor a customer's participation to account for the percentage of MGE's energy portfolio that is being increasingly served by renewable resources. For example, a participant under the option could have 25% of their usage served by renewable resources in MGE's "standard resource portfolio." Then, the customer would have 75% of their energy use subject to the $0.01/kilowatt-hour (kWh) incremental energy charge under the GPT program. In subsequent years, as the percentage of renewables in MGE's standard portfolio increases, the percentage of GPT purchased by the customer decreases.
Yes, in a number of ways. One of the ways in which this filing advances sustainability is through the introduction of an option for renewable natural gas (RNG).
Consistent with our ongoing commitment to greater sustainability and to the evolving needs and preferences of our customers, MGE is proposing a voluntary RNG service option for customers who have an interest in procuring gas that is derived from organic waste streams. This service would be similar to the renewable energy programs available to MGE's electric customers.
MGE Connect® helps to manage demand for electricity during peak or when demand on the electric grid is at its highest. Managing demand helps to reduce emissions and to facilitate an efficient, cost-effective grid and its use of generation resources.
MGE is seeking to expand the availability of MGE Connect to small commercial customers and to expand the program to include non-summer events.
MGE also continues to explore additional opportunities for behind-the-meter devices in addition to smart thermostats, such connected water heaters, smart inverters and consumer-scale battery storage.