Sunday, August 26, 2012

Monopoly Utilities

Bruce Murphy, in Monopoly Greed, uncovers:

  • A new study by the state Public Service Commission (PSC) shows electric rates are now 21 percent higher than other Midwestern states and 10 percent higher than the national average. 
  • Wisconsin utilities have been allowed to jack up electric rates by 55 percent from 2002-2010, during a period when inflation rose by just 20 percent. 
  • A study by the UW-Milwaukee Employment & Training Institute found that the average cost of heat and electricity for city of Milwaukee renters, all customers of We Energies, nearly doubled in just six years, rising from $1,318 in 2000 to $2,227 in 2006.
  • These ever-higher rates have helped drive profits for We Energies: year after year the company has reaped profits of 10 to 12 percent.
  • Wisconsin utilities had the second-highest profit margin among 26 states studied.
  • Those generous profits, in turn, help pay for huge bonuses for We Energies executives, which amounted to $77 million over the last three years, according to annual reports it files with the PSC.
  • Those profits have also been good for the company’s stock price, which has risen by 17 percent year-to-date (33% over the past calendar year). 
  • We Energies would like to see more increases in the years to come. Company officials are requesting an annual increase of 3.6 percent for both 2013 and 2014, though the estimated rate of inflation for those years is 2.2 percent and 2.3 percent respectively.

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