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What if my gas or electric utility asks for a deposit?
A utility may request a deposit from some customers. The regular deposit is based on the 2 highest consecutive bills within the last 12 months for the address where the service is being used. A winter moratorium non-payer deposit is based on the 4 highest consecutive bills within the last 12 month review period.
Residential Customers
A new residential customer may be asked to post a deposit if they owe an undisputed bill for the same type of service incurred in Wisconsin within the last six years.
A current residential customer may be asked to post a deposit if:
- Their service was shut off during the last 12 months
- They falsified a service application
- They accrued charges that became 60 days late within the first eight months of new service
- They fail to pay during the winter and their bill becomes over 80 days past due
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Residential deposits are returned with interest after 12 consecutive months of prompt payment.
The utility may accept, in lieu of a residential cash deposit, a contract signed by a guarantor satisfactory to the utility. The contract guarantees a specified sum not exceeding the amount of the cash deposit or guarantees payment of all future bills.
Commercial Customers
A new commercial customer may be asked to post a deposit if the applicant's credit hasn't been established to the utility's satisfaction.
A current commercial customer may be asked to post a deposit if:
- They have not made prompt payment of all utility bills in the last 24 months
- They fail to pay during the winter and their bill becomes over 80 days past due
Commercial deposits are returned with interest after 24 consecutive months of prompt payment.
The utility may accept, in lieu of a commercial cash deposit, a contract signed by a guarantor satisfactory to the utility. The contract guarantees a specified sum not exceeding the amount of the cash deposit.
**You do not have to post a deposit if your income is below 200 percent of the federal poverty level guidelines.**
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If I’m unhappy with my electric utility, can I choose a different provider?
No, you cannot. Wisconsin explored this concept in the 1990s and concluded that the state’s transmission system would not be able to provide customers with the choice of providers that would result in lower rates. Instead, customers would have access to a limited number of electricity suppliers, likely resulting in higher utility bills. This conclusion proved wise after California’s failed attempt at “customer choice” resulted in skyrocketing utility bills and widespread blackouts. The experience of other states suggests that deregulating the provision of electric service will not provide the customer benefits that some touted a decade ago.
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What can the PSC do about my high natural gas bills?
The PSC only regulates the non-fuel part of your natural gas bill. The natural gas commodity itself, which makes up about 70% or more of customer gas bills, is not regulated and the price goes up or down based on natural gas markets. The PSC reviews each natural gas utility’s natural gas costs every month.
When demand for natural gas increases it is likely the price of natural gas will also increase. During the summer months natural gas usually costs less because consumers don’t use as much. In the summertime when gas costs less, the PSC allows natural gas utilities to buy gas and store it for use in the winter when prices may be higher.
The PSC has long encouraged conservation as an effective means to reduce natural gas bills. There are several ways to save money on your natural gas bill. See
For Consumers: Energy Conservation for tips and resources
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What are the different charges on my natural gas bill and why do they change?
Natural Gas Rates
The following section describes the different charges that customers see on their gas bills, discusses what causes these prices to change, and describes the PSC’s role in regulating these charges. Natural gas rates include customer charges, distribution charges, and natural gas charges:
Customer Charges
Distribution service rates are regulated by the PSC.Customer charges are fixed costs that do not change based on the amount of natural gas a customer uses. They cover the costs associated with billing, customer service, metering, etc. This rate is applied on a daily basis or month basis and is always the same each month. Customers pay the customer charge even if they do not use any gas.
Distribution Service Charges
Distribution service rates are regulated by the PSC. Distribution costs are charged to customers per therm of natural gas that they consume. Distribution service costs reflect the utility's cost of maintaining and operating its gas distribution system. The gas distribution system is responsible for the delivery of natural gas to homes and businesses. These costs, like interstate pipeline rates, are fairly stable from year to year. Unlike interstate pipeline rates, however, local distribution rates do not change seasonally. These rates change only when a utility has a rate case and the PSC approves. In most cases, these rates are not changed more than once every two years.
Natural Gas Charges
Natural gas charges consist of commodity and interstate pipeline costs. Natural gas costs are charged to customers per therm of natural gas that they consume.
Commodity Costs
The cost of the natural gas itself is the most unstable and difficult factor to predict as supply and demand for gas cause the price to increase or decrease. For example, warm winter weather can cause prices to drop as the demand for gas is reduced, whereas a sudden unexpected cold snap can cause prices to rise as the demand for gas increases. The costs that the utility incurs to acquire the gas commodity is passed along directly to customers, meaning that the utility does not earn a profit on the sale of the commodity. During a rate case proceeding, the PSC sets a base price for the commodity cost. For utilities to recover the actual commodity costs paid for the gas, the PSC uses a purchased gas adjustment (PGA) cost recovery mechanism, which is on customers’ bills. The PSC is responsible for reviewing each utility’s commodity purchases on a monthly basis.
Interstate Pipeline Costs
Interstate pipeline costs (or transportation costs) are regulated by the Federal Energy Regulatory Commission (FERC). Interstate pipeline costs are fees a utility has to pay in order to transport natural gas from Canada and other states to Wisconsin and deliver it to the utility’s distribution system. Pipeline costs are more stable than commodity prices.
The PSC requires gas utilities to use a seasonal pricing approach to collect pipeline transportation costs. The concept is shown in Figure 2 below. The winter period runs from November through either March or April, depending on the utility. Pipeline transportation charges increase by about $0.10 per therm of gas used during the winter period, starting on November 1.
Gas Distribution to Customers starts at the
Gas Well and travels the
Interstate Pipeline to a
Gas Compressor. Traveling further up the pipeline it then reaches the
City Gate (Metering) Station. It then moves through a
Transmission Pipe to both an
In-City Electric Generating Station and an
Area Gas Regulator Station. Gas then moves up Distribution Pipes to both Residential and Commercial Customers.
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What do utilities do to protect customers from high gas prices?
Storage
Utilities purchase gas during the summer when gas is usually cheaper and store it for use in the winter. The cost of gas charged to customers in the winter will be a blend of the current market price and the cost of the storage gas. This blending tends to limit price volatility to some extent.
Hedging
Hedging involves the use of financial instruments such as futures, options, and swap contracts for natural gas traded on the New York Mercantile Exchange (NYMEX). Proper use of these contracts allows the utilities to lock in prices or to put a cap on prices. Hedging is used to control price spikes and produces stable and more predictable bills for customers. The PSC reviews each utility’s hedging strategy on an annual basis.
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What is the PCAC charge on my electric bill?
The Power Cost Adjustment Clause (PCAC) allows utilities to charge customers for the costs it pays to buy power. Because wholesale power costs fluctuate, the PCAC is a monthly energy charge adjustment that reflects changes in a utility’s purchase power costs.
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