Rising electricity cost has jolted state

Posted on November 16, 2010. Filed under: Coal, Generation Plants, Renewable energy - generally | Tags: , , |


From an article by Tom Content in the Milwaukee Journal Sentinel:

The price of electricity has shot up faster in Wisconsin than in all but five other states since 2000, which could pose a threat to the state’s economic competitiveness, a new analysis by the Wisconsin Taxpayers Alliance says.

Wisconsin businesses and homeowners are paying more than most surrounding states, as the state continues to pay for power plant upgrades that followed near-brownouts in the late 1990s.

That, coupled with rising natural gas and coal prices, has pushed rates up. The state’s electricity prices, which ranked 11th-lowest in the nation in 1990, now rank 20th-highest, the report found.

“We need to recognize that energy prices really do have an effect on the competitiveness of the state,” said Kyle Christianson, policy research analyst at the nonpartisan Taxpayers Alliance. “We’re talking about trying to attract employers and adding new jobs, and particularly in a manufacturing-intensive economy like Wisconsin, energy prices are a major cost of doing business.”

Utilities regulators defend Wisconsin’s power plant building boom as important to keeping the state’s economy competitive over the long run.

“A manufacturing state simply cannot survive without a reliable electric infrastructure,” said Bob Norcross, administrator at the state Public Service Commission. “Wisconsin responded to its reliability crisis by making necessary investments that were in large part supported by the state’s business community, and they were sound. The rebuilding period that accompanied those infrastructure investments is now reaching an end, but we need to pay for them – and that’s why we have rate pressure. . . .”

Charlie Higley, executive director of the Wisconsin Citizens’ Utility Board, is concerned that rate increases will continue for residential customers.

“Our households are paying a high price for electricity, and it’s hurting their ability to make ends meet,” Higley said.

Wisconsin now has a power glut that prompted the state Public Service Commission to launch an investigation into whether some of the state’s older power plants should be mothballed or shut down.

Shutting down coal would help the state’s customers from having to cover the rising coal prices, Higley said.

“Since we get most of our power from coal that means we’re very susceptible to paying higher rates because of higher coal prices,” Higley said. “It underlies our calls for moving toward cleaner energy solutions like renewable energy and energy efficiency, which don’t have fuel costs.”

But Klappa said the record power use this summer – in the midst of an economy that’s slow to emerge from the Great Recession – underscores that Wisconsin doesn’t have a power glut.

“We never had a 95-degree day this summer and we set two energy consumption records for customers, July for residential customers and August for small commercial and industrial customers,” he said. “There’s not a lot of excess.”

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    A statewide nonprofit dedicated to promoting economically and environmentally sustainable energy policies and practices in Wisconsin.

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