Dahlberg customers get rate increase

MADISON — Electric customers of Dahlberg Power & Light overall will pay 4.53 percent more for electricity, according an order the Wisconsin Public Service Commission issued Tuesday.

Residential customers currently paying $69.12 monthly in energy charges for 600 kilowatts of power will pay $71.88 for the same amount of power under new rates that took effect Wednesday.

The monthly customer charge also increased from $8 monthly to $8.50.

Depending on when meters are read, the next Dahlberg Power & Light bill may include usage billed combining the old and new rates, said Dave Dahlberg, company president. The following bill will entirely reflect the new rates, he said.

Rates for the several other customer classes also increased by 3.5 to 4.4 percent.

The utility sought a 4.9 percent overall rate increase in its August rate application. Those rates would have generated $622,541 in additional revenue; the approved rates should yield $570,408 in additional revenue, according to the rate order.

With the new rates, the utility should earn $13.2 million, incur $11.7 million in total expenses, have about a $1.5 million net operating income, and a 10.41 percent rate of return on its infrastructure investment, according to the rate order.

Dahlberg Power & Light sold slightly less power last year than in prior years, due to a continued economic slowdown, Dahlberg said.

Lower electricity sales meant lowered revenue for the company. Dahlberg Power & Light revenues from electric sale have decreased by 1.82 percent, falling from $10.9 million in 2009 to an estimated $10.8 million last year. The utility recorded less revenue from urban, rural and seasonal residential customers; while sales to large power users increased 10.4 percent, according to documents filed with the PSC.

Meanwhile, operating expenses, minus depreciation and tax payments, increased from $7.4 million in 2009 to an estimated $9.6 million last year. Liability insurance and employee pension and benefit costs were among the leading factors in the company’s increased expenses.

Pension costs were driven by the company having to offset less income from lowered interest rates by significantly increasing its required contribution to pension plans in the past few years, Dahlberg said.

That contribution increased from $303,370 in 2009 to $530,512 last year, according to filed documents.

Dahlberg Power & Light received its last rate increase in 2007; however, it can pass on to increases in the cost of the power it purchases customers. Called the Purchased Power Adjustment Clause, PPACs can occur as frequently as the price of wholesale power changes.

Last year, the company recorded $1.86 million in PPAC charges and almost $1.46 million in 2011.

The company also credits customers when the price of wholesale power falls below the rate approved by the PSC.

Presumably, the company makes no profit on the PPAC, according to the PSC.

It’s difficult to forecast precisely the wholesale price of power Dahlberg Power & Light pays, said Dahlberg as its power suppliers also put PPACs in its supply contracts with the utility.

However, next year it appears the wholesale price of power will decrease, he said.

“We’re hoping customers will see a negative PPAC next year,” he said.

Dahlberg Power & Light serves 11,000 customers in Douglas, Bayfield, and Washburn counties.

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