Transcript Document

Why is WPL filing a rate case?
 Last Base Case Rates were set January, 2007
 Cost of our utility investments must be reflected in
prices our customers pay
 Rate case process is the only way to recover costs to
provide safe, reliable, affordable, and environmentally
sound utility service to our customers and communities
 Energy demand is growing at 2-3 percent per year and
we must invest in new facilities to meet that demand
 Need to pursue a greener energy future by increased
investment in renewable energy
 Supports the expansion of customer energy
conservation programs and renewable energy projects
How much additional was requested?
 Initial Request to PSCW was to increase retail electric
rates by $93 million
 Since Initial Request, collecting increased fuel costs
$15.6 million
 Overall requested change in rates is $77
 Commercial & industrial average < 6%
 In addition, we are asking for permission to decrease
retail natural gas service rates by $814,000 or 1.0
percent
 WPL is also proposing the ability to reopen the rate case
for the purpose of incorporating costs associated with
major infrastructure projects which receive PSCW
approval before the end of 2009
How are rates determined for 2009
and 2010?
 For retail electric rates, WPL proposes that rates be
set for 2009 based on 2009 revenue requirements,
with limited adjustments for 2010 permitted
through a limited rate case reopener process
 For natural gas rates, WPL proposes that rates be
set for 2009 and 2010 using averaged rates over a
two-year period, incorporating revenue
requirements for both years.
What are the primary cost drivers?
 Environmental Compliance and Stewardship
 Clean Air Interstate Rule CAIR
 Clean Air Mercury Rule CAMR
 Clean Air Visibility Rule
 Renewable Generation – Cedar Ridge Wind Farm
 Energy Efficiency and Conservation
 New Generation – Nelson Dewey, Neenah Generating
Facility
 Advanced Metering Infrastructure
 Transmission
What initiatives are there for
Industrial Customers?
 Continuing WPL’s $40 million Shared Savings
program that helps business/ag customers with their
energy efficiency and energy conservation
 Proposing an initiative that would help to financially
support the installation of new customer-owned
renewable generation
 Proposing to increase our buyback rates for solar,
biogas and wind energy
What is the timeline?
 Filed the Base Rate Case on February 22, 2008
 The approval process is expected to take about 9
months
 All rate changes must be approved by the PSCW
after a thorough review of the data and extensive
public input
 WPL is requesting that new gas & electric rates be
effective on or about January 1, 2009 with a
change in 2010 for impacts approved via a limited
re-opener
How will this impact customers?
 Typical residential electric customers would see a
monthly increase of $7.85
 Typical residential natural gas customers would see
an annual decrease of $7.00
 Business customers would see varying cost
impacts based on their customer class and usage
 Actual amounts will vary depending on the
outcome of the case, and the associated rate
designs approved by the PSCW
What is WPL doing to help customers control costs?
 Increased interruptible credits based on the cost of
peaking units
 Eliminated the customer demand charge which
was applied to highest peak in past 12 months
 Economic interruption rate option available
 Shared Savings to support customer energy
efficiency improvements
 Enhanced renewable buyback rates for customer
owned generation
What is WPL doing to control costs?
 Helping customers reduce their energy
consumption through energy efficiency and
demand-side management programs
 Holding the line on O&M expenses
 Implementing business unit cost saving activities
 Utilizing Lean Six Sigma projects
 Shielding against rising fuel costs by using a
variety of fuels, multiple transportation options,
locking in of prices and storage
Questions?
NYMEX Natural Gas Prices May 2007 – May 2008
Natural Gas Prices Continue to Climb
AE-WPL Natural Gas
Residential Rate Comparison
$1.80
$1.60
$1.40
$/Therm
$1.20
$1.00
$0.80
$0.60
$0.40
$0.20
$0.00
Jul
Aug
Sep
Oct
Nov
Jul '05 thru Jun '06
Dec
Jan
Jul '06 thru Jun '07
Feb
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Apr
Jul '07 thru Jun '08
May
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