October 6, 2014
Madison Gas & Electric Comment Letter
From AARP to the Wisconsin Public Service Commission
Chairperson Phil Montgomery
Commissioner Eric Callisto
Commissioner Ellen Nowak
Public Service Commission
610 N. Whitney Way
Madison, WI 53705
Re: Madison Gas & Electric ("MGE"), Docket No. 3270-UR-120
Proposal for High Customer Charge (Fixed Electric Residential Charge)
AARP is a nonprofit, nonpartisan membership organization that advocates for people who are 50 years of age and older, seeking to promote their independence, choice and control in ways that are beneficial and affordable to them and to society as a whole. One way that AARP promotes the well-being of older persons is through its advocacy for reasonable utility rates and service. Older consumers tend to devote a higher percentage of their total spending towards residential energy costs than do other age groups, and they often have special safety concerns with regard to their continued access to utility service.
AARP 820,000 members in Wisconsin rely upon affordable and reliable energy, to keep their homes warm and for other essential purposes. Many of these members are residential natural gas or electric customers of Madison Gas & Electric ("MGE"). AARP is particularly concerned about one important issue in this rate case that raises serious affordability concerns--the utility`s proposal to dramatically increase the electric residential customer charge. MGE`s proposal in this case would increase the customer charge from $10.50 per month to about $15 per month--a 42% increase to the fixed part of a residential bill.
AARP opposes this plan to dramatically increase the fixed customer charge. This is a change that may benefit large residential energy users, but at the expense of the smallest residential users. In fact, the smaller a particular customer`s electric usage, the greater the negative impact would be from this proposal. Any rate increase is a struggle; imagine a senior citizen living alone having to pay more than $15 each month before using any energy at all!
Shifting cost recovery from a primarily usage-based method over to a high fixed charge rate design would create a significant economic burden for low usage customers, including a great number of one-person or two-person senior households. On average, customers in our region (East North Central Census) use 10,719 kWh of electricity per year, but households headed by a person 65 or older use considerably less power--only 85% of the usage of average households in our region. Generally speaking, low-income customers would also be hit hard by high fixed customer charges; the majority of LIHEAP recipients use significantly less than the average amount of energy.
Many older consumers diligently dedicate themselves to conserving home energy usage, trying to keep their energy bills more affordable. It would be hard to explain to those consumers why they should not be receiving the full economic benefit of their careful conservation efforts. It is frustrating to them when they see the rewards of their frugality minimized. The MGE customer charge proposal would send price signals that erode the economic incentives for conservation and energy efficiency.
In conclusion, AARP respectfully urges the Commission to reject the utility`s high fixed customer charge proposal and the negative impact that such increases would have on the energy cost of low usage customers.
Sincerely,
Helen Marks Dicks
Associate State Director State Advocacy
On behalf of Wisconsin AARP
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