PSC reduces MG&E electric rate increase, won’t change how home solar users are compensated

In the first of a series of rate decisions that state regulators are issuing over the next several weeks, the Wisconsin Public Service Commission (PSC) agreed Friday to raise electricity rates for Madison Gas and Electric 5.7% over the next two years — undercutting the utility’s original petition.

The PSC also rejected the MG&E’s petition to change how it would compensate homeowners who install their own solar panels — a decision hailed by environmental groups.

Under the current rate structure, called net metering, homeowners with their own solar panels are compensated when they generate excess electrical energy and return it to the grid. MG&E said its proposal would have better balanced the interests of homeowners without solar and homeowners with solar, but opponents said it would likely reduce the adoption of rooftop solar.

“MGE’s proposal would have increased the amount of time it takes to recoup the cost of solar panel installation,” said Midwest Environmental Advocates in a statement after the PSC’s decision Friday. “As a result the proposal would have exacerbated climate inequity by putting rooftop solar further out of reach for low- and middle-income Wisconsinites.”

The environmental law firm represented 350 Wisconsin, a climate advocacy nonprofit, in its opposition to the MG&E plan before the PSC.

MG&E had originally sought a 7.3% rate increase for 2024-2025.

In a statement, the Citizens Utility Board (CUB), which represents consumers and small business owners in utility rate proceedings, praised the PSC’s decision to institute an earnings rate cap for MG&E, something that is already in place for some other large utilities.

CUB also noted that the PSC reduced MG&E’s return on equity, or profit margin, from the 9.8% that the company had sought to 9.7%. While CUB had recommended reducing the return to 9.3%, Tom Content, the CUB executive director, said the more limited reduction “remains a good signal that the PSC is focused on affordability for customers paying the bills.”