Electric Rates Updated June 1:
Limited Actual Impact for Customers
June 1, 2018
As many of you know, Kaukauna Utilities’ rates are changing on June 1, due in large part to the loss of Appleton Coated in August 2017. A lot has happened since that time, and we want to take a minute to share what we know because our customers deserve to hear directly from us on this matter.
Limited Impact for Customers
Although the approved rate change reflects an overall increase, when compared to before the loss of Appleton Coated in August, most residential customers will see an average actual increase less than projected as a result of the rate change, but it’s important to be aware that other factors can also impact customer bills. While rates are a main component of customers’ bills, the bottom line for what they pay is also shaped by factors that vary month to month.
Examples include seasonal wholesale power cost changes, energy market conditions, fluctuations in customer energy usage, changing fuel costs, hydroelectric production, tax-related savings, and more. KU passes along these costs or savings to customers via the Power Cost Adjustment Clause (PCAC) on their monthly electric bills.
The impact of the change also varies by customer rate class and usage. Our utility staff is available to answer your specific questions and to discuss how the new rates are projected to affect your individual bill.
Why Updates Were Needed
Appleton Coated was by far our largest purchaser of electricity, and although the loss of this customer lets us spend less on wholesale power, most of our not-for-profit utility’s other costs do not change regardless of how much electricity we sell. These fixed electric utility costs are for things like the maintenance of our hydro facilities, local power lines, substations, meters, transformers and more.
When we sell less power, our fixed costs must be spread out over fewer units of energy. We needed to update rates to reflect these changes.
With the former Appleton Coated mill now running again, you may be wondering whether the rate changes are still necessary. While we share the community’s hope that the mill will continue its turnaround and return to full operation, the need for the rate update has not changed. This is partly because the mill’s new owner is now generating its own electricity to meet most of the mill’s needs.
The new rates have been approved on a temporary basis and will be revisited by the PSCW in the future.
Limiting the Impacts for Customers
KU’s investment in local hydropower resources is the greatest factor helping to limit the actual impact of the rate increase on customer bills. Without Appleton Coated, the rest of the utility’s customers now receive a greater percentage of the utility’s lower-cost local hydro power, which brings costs down.
In addition, a recent change to the federal corporate tax rate is lowering KU’s wholesale electric costs, and the utility passes these savings on to customers. KU also examined its business plan for the next several years and cut back on infrastructure and operational costs where possible. These factors have helped to manage the impact of the needed electric rate increase.
What Customers Can Do
Kaukauna Utilities also offers resources to help you manage electric costs. These include:
- An alternative time-of-use rate provides savings for customers who are able to shift their usage to times when electricity costs less to generate
- Energy-saving programs and incentives
- Budget billing
- Energy assistance for income-qualified customers, available through the Wisconsin Home Energy Assistance Program (WHEAP). To learn more about the WHEAP application process, customers should contact Wisconsin Energy Services at (800)506-5596.
As always, we are here to serve your needs. Please contact us if you have questions or would like to discuss how the rate updates will impact your bill.