Dive Brief:
- We Energies industrial electricity rates are higher than the national average and most surrounding states, but the utility is offering a real-time pricing option to help combat complaints its customers are being competitively disadvantaged.
- According to the utility, its rates only seem high because other electricity providers have yet to make costly and necessary infrastructure improvements.
- Under the real-time pricing program, the utility supplied power at the Midwest hourly wholesale rate of 4.6 cents per kilowatt-hour this quarter rather than the company’s average industrial rate, which so far has been running at 8.6 cents per kilowatt-hour this year.
Dive Insight:
We Energies' real-time pricing is helping the utility fight complaints over its higher industrial rates, the Milwaukee Business Journal reports. Billions of dollars in transmission investment has led to greater reliability in the state, but power rates are higher than the national average and neighboring states except Michigan.
The pricing program, approved by state regulators in 2011, has allowed participating customers to add 1,247 jobs, Gale Klappa, chairman and CEO of We Energies parent company Wisconsin Energy, told the Journal.
The real-time pricing program is available to new customers and those increasing their electricity usage. The Journal spoke with Howard Piotrowski, a manager at two mills for Neenah Paper, who said the program is “a tool to make the rates reasonable.”
But, according to the Citizens Utility Board, the program unfairly subsidizes industrial rates by allowing a customer to pay only the marginal rate and not fixed costs.