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D for Customer Satisfaction:  This grade is based on MGE’s level of customer satisfaction as measured by J.D. Power. They conduct customer satisfaction surveys using a 1,000 point scale for electric utilities and for natural gas utilities by examining the following factors: power quality & reliability, price, billing & payment, corporate citizenship, communications, customer service, and field service.

The J.D. Power 2014 survey of electric utilities gave MGE an excellent rating, fourth from the top of all the Midwest midsize utilities, and only 4 points below the top utility. In the 2015 survey, after the rate case that approved doubling the mandatory fixed fees, MGE went from being well above the average to well below the average in its class. If you compare MGE to other Wisconsin utilities, regardless of size, it went from the highest customer satisfaction score to the lowest.

In the 2016 survey, MGE gained fewer points than other Wisconsin utilities, so it remains the lowest ranked Wisconsin utility and is still below the average in its class.

MGE is also the lowest ranked Wisconsin utility in J.D. Power’s 2016 survey of natural gas customer satisfaction. MGE held the top position in its class in that survey in 2014 before raising mandatory fees.

 

 

C- for Energy Efficiency:  MGE has participated in the statewide energy efficiency program, Focus on Energy, for many years and through that program their customers have seen considerable cost effective savings. 

MGE’s Energy 2030 Framework recognizes that energy efficiency is an important tool to decrease carbon pollution and states that it will “increase energy efficiency and conservation as an important energy resource by working with customers to reduce growth in energy use.” That pledge is a good start, but it lacks any specific targets for energy savings.

Since making that pledge in late 2015, MGE has proposed no new efficiency programs nor has it sought increased funds for energy efficiency. MGE has not committed to any metrics to judge progress in meeting its stated energy efficiency goal. And, very importantly, MGE lobbied in support of WI Act 299 that cut Focus On Energy funding by $7 million annually statewide in 2016. One recent positive action is that MGE opposed the use of Focus on Energy funds for broadband infrastructure in comments submitted to the Wisconsin Public Service Commission (PSCW).

 

 

C for Renewable Resources: MGE got a C because of good intentions and one small action but the grade would have been higher if the goals were more ambitious and there had been more action. It is progress to see MGE set a goal for renewable energy: 25% by 2025 and 30% by 2030. Unfortunately, this goal is “business as usual.” MGE could continue to add renewable resources at the same pace as the past and still meet this goal1. Preventing climate catastrophe requires higher goals and faster action.

In fact, in a filing to the PSCW on April 18, 2016, MGE said, “MGE took no action since its 2011 compliance filing to increase its renewable energy percentage.” Since then, MGE has begun construction on a 0.5 MW “shared solar” and a related 0.1 MW solar project in Middleton, for which they receive some credit. However, this effort pales in comparison to neighboring utilities, which have announced significant renewable projects: Xcel for 1500 MW, Alliant for 500 MW, WPPI for 100 MW, and Dairyland Coop for 98 MW.

 

 

D for Greenhouse Gas Reduction:  The grade is primarily a reflection of MGE’s current reliance on coal for 68% of electricity sold2. Again, MGE has a goal for a reduction in emissions but no plan for how the goal will be met. In addition, a stronger goal is needed to make MGE a leader3.

Without a plan we don’t know whether the decrease in emissions is projected to be from the addition of renewable resources, more conservation and efficiency, decreases in sales, switching fuels, or the types of power purchased. MGE has made a deal to slightly decrease its ownership stake in the Columbia coal plant, but this step is too small to address the challenges, and MGE remains heavily invested in Elm Road Generating Station, a $2 billion coal plant expected to run until 2050. MGE’s customers have consistently asked for cleaner power, more renewable generation, and less coal generation. MGE does not seem to be listening and certainly has not been timely or transparent about where it is going.

 

 

D for Rates:  MGE has the highest residential rates of all utilities in the state4. In 2014, it was one of the first utilities to propose very regressive increases to mandatory fixed fees for both residential and small commercial customers.

In the Order resulting from the 2014 rate case, PSCW Commissioners instructed MGE to talk to their customers about rates, especially low-income rates. MGE did reach out to customers to talk about the “utility of the future,” but despite a promise made in a letter to 141,000 customers, MGE neglected to ask specifically about rates. Without being asked, many customers told MGE that they wanted lower rates and lower mandatory fees.

In the 2016 rate case, MGE proposed the same regressive rates and opposed a party who suggested a change back to the old rate structure. In lieu of a broader investigation of rate structure, MGE met with CUB and Clean Wisconsin, but after two years there has been no public report from this effort and no changes to mandatory fees nor were optional low-income rates proposed in their rate case.

 

 

D for Corporate Behavior:  MGE has stated and advertises that it is a “Community Energy Company” and that it will be more open and transparent with customers but its actions are to the contrary. When launching their Community Conversations, MGE said they would form a “Community Energy Partnership” that would “feature additional deliberative discussion to provide input, help inform, and provide ongoing guidance for MGE’s continued planning for how the company moves forward together with customers and stakeholders to build a Community Energy Company of the Future”.

What we have gotten instead are: 1) MGE holding small group meetings that are confidential where reports are rarely made public; 2) Change from an open public workshop to one by invitation only; 3) MGE denied release of workshop materials for six months; 4) Official statements that rate case testimony about MGE’s public outreach, was “irrelevant” and “a waste of time”.

MGE’s Discussion Guide told customers that the conversations would result in “an energy plan” for the next 10-15 years. Furthermore, it was made clear to MGE customers that a “framework is not a plan,” but it has now been more than a year since “Energy 2030 Framework” was released and no “Plan” has been announced and no annual goals exist to check progress.

Two other corporate actions that had been anticipated for an “Energy Company of the Future”, but have not been acted on are: 1) Placement of diverse representatives on the Board of Directors and 2) Discussion of becoming a certified B Corp at an annual shareholder meeting, which would place value on the community’s well-being.


MGE is making insufficient progress and needs to increase their efforts to avoid failure. MGE should take steps immediately to improve their grades and the satisfaction of their customers. Announcing support for the goal of making Madison a national leader in clean energy with fair & affordable bills would demonstrate a willingness to improve. Other suggestions for specific actions can be viewed here

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REFERENCES

Most references are included as links in the text, but further explanation is provided here for items compiled or calculated by RePower Madison. Information is current and accurate to the best of our knowledge at time of publication on December 19, 2016.

  1. Data on MGE’s renewable energy percentage from 2006 to 2015 was retrieved from filings with the Wisconsin Public Service Commission. The PSCW gathers and reports this information annually as it tracks Renewable Portfolio Standard compliance. The information for each year can be found by searching the PSCW’s ERF system for documents with the following PSC REF numbers: 2006 – #85339; 2007 – #107019; 2008 – #124865; 2009 – #143807; 2010 – #153716; 2011 – #174240; 2012 – #190801; 2013 – #206461; 2014 – #271802; 2015 – #285744.
  2. MGE’s power sources were calculated using information from MGE’s 2015 annual report filed with PSCW. Information on MGE’s purchased power is on pages 160-161 and generated power is on pages 180-185 and 192. Fuel types were approximated for power purchased from WE Energies and MISO using information about their power sources available on their websites. MGE does not own any nuclear plants.
  3. All major investor owned utilities in Wisconsin have announced goals to reduce greenhouse gas pollution. All goals are based on 2005 levels. Xcel Energy has set a goal of 60% reduction. MGE, Alliant Energy, and WEC Energy Group (owner of WE Energies and WPS) have all set goals of 40% reduction.
  4. Year to date information on residential rates at regulated Wisconsin utilities was pulled from the PSCW’s website in December 2016 to compare bills paid by customers using 600 kWh of electricity a month. Rate comparisons between Wisconsin and other midwest states come from the PSCW’s Strategic Energy Assessment published in 2016.