WE Energies - Requested Rate Increases

There's only one word for this.

Wrongheaded.

We live in a capitalistic society. That means
that a firm trying to do business in this society
has shareholders who invest money in the basics
that constitute that business. Goods,
infrastructure, payroll, and whatever else is
necessary in any given instance. And sales are
designed to include profit, yielding the basic
reason for shareholder investment in the first
place.

The decision to invest in a new huge power
generating plant has a number of elements
driving the decision whether to build such a
facility or not.

First, is there either growth in demand for power
that will justify the investment based on increasing
sales? Or, the other justification, has the existing
infrastructure gotten so old that replacement is a
necessary expenditure?

Based on these two, the analysis either justifies
shareholder investment, or it does not.

WE Energies appears to have latched on to some other
criteria as justification to build a new power plant,
but cannot justify it under the only criteria that
makes any economic sense. So they now approach the
Public Service Commission in order to increase
utility rates to pay for a new power plant that is
an investment not available through the shareholders.

As an electrical energy consumer in the region served
by WE Energies I have a couple of very simple questions
to ask.

1) What am I getting in return for increased rates?

The answer is, nothing.

2) If I am paying for this generating power plant, where
is my return on the investment?

The answer is, it doesn't exist. This rate increase is
nothing more than a bottomless pit wanting to be filled.

WE Energies recommends their customers make changes to
power consumption habits in order to reduce our monthly
costs. But, if successfully implemented, what that results
in eventually is an overall reduction in consumption with
an accompanying request from WE Energies for another rate
increase in order to maintain former profit levels.

This request is nonsensical. The management and
shareholders want to increase production capacity
without increasing sales and to reach into customer
pockets to pay for this excess capacity that we
will not be utilizing.

Here's the hook you're looking for.

Once this excess capacity is available, WE Energies
will likely sell that power to other regions of the
country at lower rates than we are paying because
we are subsidizing the excess capacity. It will
likely be resold at retail through unregulated
utility companies where profit is not reportable
to any state regulatory agency, making this a scam
worthy of a Bernie Madoff.

I urge the Wisconsin and Michigan regulatory agencies
to thoroughly investigate interlocking boards of
directors between WE Energies and unregulated
electrical power providing utilities in other
states.

In the meantime, I urge the Michigan Public Service
Commission to deny the rate increases requested for
the addition of this coal fired generating facility
by WE Energies.

Bill Vajk