Wisconsin Industrial Power: We Energies and WPS Rate Hikes
The PSCW approved an 8.79% electric rate increase for We Energies in 2026, compounding disastrously on 2025's 10.9% hike. WPS saw a smaller 2.5% bump. In Wisconsin's regulated monopoly setup, heavy industrials have no competitive supply options and must resort to Real-Time Pricing (RTP) tariffs and aggressive demand-response curtailment to offset the massive capital recovery surcharges.
Executive Impact
- →The Compounding Math: We Energies (serving the densely populated Milwaukee corridor) is delivering consecutive body blows to commercial ratepayers. An arbitrary commercial facility paying $100,000/month in 2024 is now facing an annualized run rate approaching $120,000 in early 2026, purely from base tariff escalation.
- →The Clean Energy Burden: The WEC Energy Group is executing one of the most aggressive coal-to-clean transitions in the MISO footprint. Building utility-scale solar and battery storage while simultaneously paying off the stranded debt of prematurely retired coal units creates a massive revenue requirement curve that the PSCW shifted heavily onto manufacturing and commercial meters.
- →Double Margin Erosion: For heavy industrials like paper mills, foundries, and advanced manufacturing, electricity is often a top-three operational cost. The inability to competitively bid this input (unlike raw steel or logistics) means Wisconsin manufacturers are losing margin competitiveness against peers in deregulated states.
Mitigation: Real-Time Pricing (RTP) Tariffs
With competitive supply legally banned, large commercial and industrial consumers MUST pivot toward complex utility programs designed to shift risk. The most potent tool in the We Energies arsenal is the Real-Time Pricing (RTP) tariff.
- Breaking the Blended Rate: The standard commercial tariff is a "blended" rate—it assumes the utility must hedge the absolute worst-case scenario on the MISO wholesale market to guarantee your power. If you accept a standard tariff, you are overpaying 95% of the year to insure against the 5% of hours when grid prices spike.
- The RTP Mechanism: By switching to an RTP tariff, an industrial facility opts to pay the actual, hour-by-hour wholesale clearing price of electricity across the MISO grid. During crisp fall days or midnight shifts, it acquires power for pennies per kWh.
- The Catch—Automated Curtailment: The risk of an RTP tariff is catastrophic exposure during a July heatwave or a January polar vortex. Facilities adopting RTP must have an automated Building Management System (BMS) integrated with grid signals, allowing them to rapidly shut down heavy machinery when wholesale prices breach a pre-set threshold. It transforms energy procurement from an accounting function into a 24/7 engineering discipline.
The CP2 Power Plant Controversy
The PSCW's approval of the compounding rate hikes occurred amidst heated debate over WEC Energy Group's proposal to build the "CP2" natural gas plant (a massive $2 billion combined-cycle facility with LNG storage in Oak Creek). Environmental groups and consumer advocates argued the facility is a stranded asset in waiting, and its eventual construction will ensure that rate hikes continue unabated deep into the 2030s.