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The cost of electricity for many residents in the Upper Peninsula is scheduled to go up again in 2016.
UPPCO has announced that they have applied to the Michigan Public Service Commission for the permission to raise retail electric base rates next year by 6.45 percent.
As a regulated utility, UPPCO is also seeking from the Commission alternative ratemaking for authority to defer certain expenses to reduce the rate impact on its customers and bring the average rate increase down in this case from a possible 12.7 percent to 6.45 percent.
Though the actual numbers will vary, UPPCO says the average residential customer using 500 kilowatt hours of electricity per month would see an increase just under $10.00 per month.
Costs associated with making UPPCO an independent U.P. utility are cited as reasons for the increase.
Here is UPPCO’s full press release:
UPPCO Requests Adjustment in Electric Base Rates for 2016
Will help ensure continued quality customer service and delivery of safe and reliable electric service
Ishpeming – Upper Peninsula Power Company (UPPCO) announced today it has applied to the Michigan Public Service Commission for permission to raise retail electric base rates for 2016 by 6.45 percent.
As a regulated utility, UPPCO is also seeking from the Commission alternative ratemaking for authority to defer certain expenses to reduce the rate impact on its customers and bring the average rate increase down in this case from a possible 12.7 percent to 6.45 percent.
While the net effect on customers will vary by rate classification, the average residential customer under the proposed request in the company’s Integrated System using 500 kilowatt hours of electricity per month would see an increase of approximately $9.93 per month. An average residential customer in the Iron River System using 500 kilowatt hours per month would see an increase of approximately $9.56 per month. Under both examples, the proposed increase is under 33 cents a day.
UPPCO’s last base rate increase request was in 2013. This new request fulfills a promise made to institute a two-year rate freeze after becoming in 2014 a new Michigan-based based utility.
The major drivers for the filing include investments, or start-up costs, UPPCO must make in essential resources to operate as an independent, Upper Peninsula utility and serve its customers. Some of these resources include:
- Customer Service: UPPCO will be establishing an Upper Peninsula-based customer contact center and operations dispatch and control center necessary to provide monitoring of the electric grid, dispatching crews during outages and addressing customer inquiries and billing.
- Safe and Reliable Service: To ensure continued service reliability and improve management of outages, UPPCO wants to make investments in its electric distribution assets. Those assets include approximately 3,500 miles of distribution lines spanning 4,460 miles of primarily rural, and in many cases, heavily-forested areas in ten of the Upper Peninsula’s 15 counties that serve more than 52,000 customers, or approximately 12 customers per square mile.
“Upper Peninsula Power Company has submitted this request in order to continue providing safe and reliable electric service,” said David Forsberg, UPPCO Manager of Community, Government and Public Relations. “Just as important, however, as a new, Michigan-based company UPPCO will also be providing dedicated customer service to our customers we are privileged to serve.
“It should also be noted that as part of creating a new, stand-alone company jobs necessary to help UPPCO operate and serve its customers are being brought back from Wisconsin to Michigan. The company will be looking at contracting for services with vendors in the Upper Peninsula. UPPCO looks forward to helping build the region’s energy future.”
About Upper Peninsula Power Company:
UPPCO serves approximately 52,000 electric retail customers in 10 U.P. counties. The company’s service territory of 4,460 square miles covers primarily rural countryside. The company’s assets include seven hydroelectric renewable energy generation facilities and two combustion turbines providing a total generation capacity of approximately 80 megawatts, as well as approximately 3,500 miles of electric distribution lines and 58 distribution substations.
