David Michael Miller
News-MGE-Report-12-19-2016
Madison Gas & Electric scores poorly on a new “energy report card” released by local utility watchdog RePower Madison. The nonprofit gives an overall grade of D+ to MGE based on individual scores in six categories: customer satisfaction, rates, corporate behavior, greenhouse gas pollution, energy efficiency and renewables.
“Most businesses wouldn’t survive with high prices and unhappy customers,” Mitch Brey, campaign director of RePower Madison, writes in a statement about the report. “But as a poorly regulated monopoly, MGE takes your money without any guarantee of satisfaction.”
RePower Madison is releasing the report card to inform MGE customers of the company's rate structure and efforts to ease away from fossil fuels in favor of renewable energy sources.
“We’ve been monitoring MGE and keeping stock of its actions and inactions. The report card is a snapshot of where MGE is and where they have been,” says Brey. “They have a lot of work to do to serve the community in the way we expect.”
MGE spokesperson Dana Brueck would only answer questions submitted by Isthmus via email. “I’m not going to comment on a report I haven’t seen,” Brueck writes. “What I do know is that we have pursued a rigorous, transparent and robust customer engagement process with lots of different forms of input. We know what our customers have said the last two years, and we know that our long-term direction is consistent with their input.”
RePower Madison scores MGE’s commitment to renewable energy a “C” — the highest letter grade given to the utility in the report. The group says MGE earns below average marks in reducing greenhouse gas and energy efficiency. The utility gets a “D” in customer satisfaction, rates and corporate behavior. According to RePower Madison, the company has the lowest customer satisfaction of any electric utility company in the state.
“Over the last few years, MGE went from one of the top rated utilities to being near the bottom,” says Brey, citing customer surveys from J.D. Power. “That drop in customer satisfaction lines up exactly with their decision to increase mandatory [fixed] fees.”
In response to the survey from J.D. Power, Brueck counters, “Very little detail is disclosed about these surveys, but we know rankings tend to vary over time and from year-to-year.”
The company’s mandatory fixed rate — the flat fee it charges to be hooked up to the grid — is the second highest in the state among public utilities. In 2015, MGE raised its fixed fee from $10.49 to $19. It had originally proposed an increase of $49 in 2016 in conjunction with decreasing the rate it charges for electricity use. That plan was panned for disproportionately impacting low-income customers and discouraging efforts to conserve energy or install solar panels. Any rate change needs approval of the Public Service Commission — the three-member panel in charge of regulating Wisconsin utility companies. Brey says the commission is no longer “keeping utilities in check” and MGE is taking full advantage of the loose regulatory climate.
“The utility regulatory system is broken in Wisconsin,” says Brey. “You’d hope that the regulators would be protecting the public interest. But in fact, they seem to be promoting the interests of the utilities and their shareholders.”
The Public Service Commission is comprised of three commissioners appointed by Gov. Scott Walker: Former chief of staff to Waukesha County Executive Dan Vrakas and deputy director of School Choice Wisconsin Ellen Nowak; former Republican lawmaker Phil Montgomery; and former secretary of the Department of Administration, Mike Huebsch.
MGE says if you include rates charged by electric cooperatives in Wisconsin — nonprofit utilities owned by customers that are not regulated by the Public Service Commission — there are “more than a dozen other utilities” in the state with higher monthly charges for residential customers. Isthmus could not verify this claim. Brueck did not provide verification either.
In 2016, Madison Gas & Electric charged more for electricity than any other utility in the state. MGE’s residential customers will also be paying more for power in 2017. The Public Service Commission gave MGE final approval on Thursday, Dec. 15 for a small rate increase on residential electricity use while lowering the rate for some commercial and industry customers.
“MGE's rates remain below the rate of inflation,” writes Brueck. “The average annual increase in MGE's electric rates from 2013 through 2017 will equal 0.2 percent while the average increase in MGE's natural gas rates will equal 0 percent.”
Earlier this year, MGE wrapped up a yearlong campaign seeking community input to help inform its Energy 2030 Framework (which was released in November 2015). The public outreach campaign was capped off with a “community energy workshop” at Monona Terrace. The event was not open to the public but specific business, nonprofit and community leaders were invited to attend. The Energy 2030 Framework sets a goal of supplying 30 percent of retail energy sales with renewable resources by 2030, increasing energy efficiency and reducing carbon dioxide emissions by 40 percent from 2005 levels by 2030.
“At the workshop, our customers told us they want MGE to ‘meet them where they are,’” writes Brueck. “That means ‘one size doesn’t fit all.’ It will take many different kinds of partnerships with many different partners to meet customers’ needs and to advance Energy 2030, and we’ve already begun establishing partnerships in pursuit of shared goals.”
In its report, RePower Madison praises MGE’s new community solar project in Middleton. But Brey says compared to neighboring utilities, MGE is lagging behind on renewables. In 2016, Alliant Energy — also based in Madison — announced renewable energy projects that will eventually produce 500 megawatts of power. The solar initiatives announced by MGE this year will only produce 0.6 megawatts.
“We give MGE credit for the solar projects in Middleton. But 31 utilities in Wisconsin source a higher percentage of power from renewable energy. It was really astonishing to see how small [MGE’s renewable energy initiatives] are compared to other utilities,” says Brey. “Clean energy technology has been advancing rapidly and prices have fallen dramatically. MGE needs to address its coal dependency but it won’t be easy given its long-term investments in coal.”
When asked if MGE is pursuing renewable energy projects in addition to the solar projects in Middleton, Brueck writes, “We are actively looking at new renewable projects and will share information as we make decisions.”
In October, MGE announced longtime CEO Gary Wolter will be stepping down. Jeffrey Keebler, senior vice president of energy supply and planning, will take over as CEO in March. Keebler declined to be interviewed for this story. The change in leadership, Brey says, could be an opportunity to make “Madison a national leader in clean energy with fair and affordable bills.”
“We are hopeful that [Keebler] will able be to change course and take some actions more rapidly. It’s incumbent on the new CEO to show that [MGE] really wants to make Madison a leader.”
Madison Ald. Rebecca Kemble is less optimistic. She’s worried that the next presidential administration will thwart the city’s effort to significantly reduce carbon emissions and source more power from renewables.
“In light of President-elect Trump’s promises to deregulate the coal industry, even permitting coal plants to remove already installed scrubbers, there will be even less economic incentive for MGE to transition away from dirty fuel,” says Kemble. “We can’t depend on market forces to support our collective values of clean air and water.”