MGE to Decrease Electric Rates in 2019
Settlement agreement provides short- and long-term benefits for customers and advances MGE's clean energy goals.
Madison, Wis., July 17, 2018—Madison Gas and Electric (MGE) today filed a rate case settlement agreement with the Public Service Commission of Wisconsin (PSCW) that seeks to lower electric rates and increase natural gas rates in 2019 and 2020.
Proposed Rate Changes
- Settlement proposal lowers overall electric rates by 1.94% in 2019. No change is proposed for 2020.
- Settlement proposal increases overall natural gas rates by 1.06% in 2019 and 1.46% in 2020.
- Proposed increase in natural gas rates covers infrastructure improvements.
- Settlement agreement provides benefits to customers and advances MGE's clean energy goals.
- A PSCW decision is expected later this year.
The settlement proposal would decrease overall electric rates by 1.94% in 2019, with no change proposed for 2020. The proposed decrease reflects the ongoing tax impacts of the 2017 Tax Cuts and Jobs Act as well as the addition of lower-cost renewable generation capacity, such as MGE's Saratoga, Iowa, wind farm currently under construction.
The proposal would increase overall natural gas rates by 1.06% in 2019 and 1.46% in 2020. The proposed increase covers natural gas system infrastructure improvements to ensure the continued reliability and safety of our natural gas system. It also reflects the impacts of the 2017 Tax Cuts and Jobs Act.
If approved, the annual decrease for a typical residential electric bill reflecting usage of 510 kilowatt-hours per month would be $15.97, or $1.33 per month. The typical residential natural gas bill reflecting 715 therms used annually would see an increase of $4.36, or $0.36 per month in 2019. The increase in 2020 equates to $11.65, or $0.97 per month.
The proposed changes would take effect Jan. 1, 2019.
Agreement provides MGE future operational flexibility
As part of the settlement agreement, MGE identified steps it can take now to benefit customers both in the short- and long-term. Those steps include the accelerated depreciation of certain assets, including its combustion turbines, Blount Generating Station and Columbia Energy Center Unit 1.
"By essentially paying off these older assets sooner, we have more flexibility to make new investments in cost-effective renewable energy and move us toward our Energy 2030 goals while mitigating impacts on rates," explained Jeff Keebler, MGE president and CEO. "This collaborative settlement process has resulted in multiple benefits to customers through lower electric rates and the opportunity for increased investment in sustainable energy."
A new Wisconsin law allows MGE to work with intervening parties to file a settlement agreement to resolve a rate case. This settlement agreement between MGE and intervening parties seeks to resolve issues in MGE's rate case.
The other parties in the settlement agreement are: Citizens Utility Board, Wisconsin Industrial Energy Group, Airgas USA LLC, RENEW Wisconsin, Clean Wisconsin, and Board of Regents of the University of Wisconsin System.
The PSCW will review the proposed settlement agreement. A decision is expected later this year.
MGE generates and distributes electricity to 151,000 customers in Dane County, Wis., and purchases and distributes natural gas to 158,000 customers in seven south-central and western Wisconsin counties. MGE's parent company is MGE Energy, Inc. The company's roots in the Madison area date back more than 150 years.