It’s time to dump MGE and Alliant for a new paradigm

Rising electricity rates, rising temperatures, and the case for public renewables.

Sweltering heat domes, suffocating wildfire smoke, 100-year floods. 

Amidst a year of unprecedented climate events, including the hottest day recorded on earth, Madison Gas and Electric (MGE) and Alliant Energy have been quietly pursuing a plan to slow the adoption of solar energy and charge residents even more to continue burning coal and natural gas.  

Enter the rate case. A rate case is the central mechanism by which investor-owned utilities (IOUs) are allowed to increase rates and, importantly, through which the community can resist such changes and make demands of their utility providers. 

This year, all five major energy utility companies in Wisconsin have filed rate cases to charge residents more for electricity in 2024 and 2025, a total increase to the tune of $500 million. Ostensibly, the money is needed to fund renewable energy projects, despite high profit margins and big payouts to shareholders and executives.

Rate hikes, billed as an accelerant for renewable infrastructure development, actually exacerbate energy burdens and help to maintain fossil fuel infrastructure. But, despite their efforts to suppress campaigns for utility municipalization, the public is catching on to IOUs’ greenwashing—and to the potential of a publicly-owned, renewable energy grid. 

Footing the bill for our peril 

In April, Wisconsin’s energy providers announced their plans to increase electricity rates. Madison Gas and Electric proposed a 7% rate increase, and Alliant Energy, leading the pack, proposed a 14% rate increase. 

In Dane County, energy bills are already too high. A 2022 study published by 350 Wisconsin found that, in Madison, extremely low-income households—those who earn 30% or less than the area median income, or approximately $20,270 per year and below—spend up to 10% of their income on energy costs, almost twice the 6% considered an unaffordable energy burden. And while the average energy burden for Madison’s low-income households is 4%, a substantial increase in utility rates could push many people beyond the “affordable” threshold. 

It’s also worth noting that nationwide, Black households have a median energy burden 64% higher, and Latinx households 24% greater, than their white counterparts. While those population demographics were not analyzed in the Wisconsin study, it’s likely these national racial disparities are reflected at the local level.  

Increased rates will make life-saving electricity—all the more essential as extreme heat becomes an inevitable feature of summer—less affordable. When energy bills climb, families and individuals experience more financial stress, which can have cascading effects on food, housing, and health security. With the pandemic-era utility shutoff moratorium lifted, service disconnections have returned as a looming threat for energy-burdened residents. Though energy assistance programs exist, such as funding for weatherization and reduced fees, energy affordability remains a persistent problem for low-income households. 

As residents struggle to afford their bills, MGE and Alliant Energy plan to squeeze their customers even tighter to rake in profits for shareholders, not to mention handsome compensation for top executives. MGE CEO Jeffrey Keebler made over $2.6 million in 2021 and Alliant Energy CEO John Larsen made over $10 million the same year. MGE, which services Dane County and parts of south-central and western Wisconsin, clocked $111 million in profit in 2022. Alliant, which has a substantially larger service area, including large parts of Wisconsin and Iowa, made a profit of $686 million in 2022. 

IOUs exploit their captive customer-base to generate millions in profits while deliberately prolonging the transition to renewable energy and perpetually extending lifelines to coal and natural gas. Though MGE and Alliant claim their goals are to reduce emissions by 80% and 50%, respectively, by 2030 compared to 2005 levels, they have on three separate occasions delayed the closure of the coal-powered Columbia Energy Center, near Portage. Most recently, they announced that the Columbia plant, originally slated to close in 2024, would be in operation until at least 2026. According to the EPA, in 2021, the plant emitted nearly 7 million metric tons of CO2—or more than the total annual emissions of Mali, a country with more than four times as many people as the state of Wisconsin. 

Unsurprisingly, it’s the same story for Alliant’s coal power plant in Sheboygan, the Edgewater Generating Station. In May of 2020, Alliant announced they would retire the plant by the end of 2022. By the time 2022 rolled around, they pushed back the planned closure to 2025. In the meantime, the plant will continue spewing upwards of 2 million metric tons of CO2 into the atmosphere per year, alongside sulfur dioxide, particulate matter, and other pollutants that endanger local communities. MGE and co-owners of the Elm Road Generating Station in Oak Creek are also delaying the transition away from coal until 2035 and branding its eventual substitution with natural gas as a cleaner, more reliable option. 

And what about MGE and Alliant’s plans for phasing out natural gas? Well, largely they don’t exist—but offsetting natural gas emissions, largely debunked as an effective tool, is apparently part of the plan. Natural gas, after all, is a “great complement” to renewable energy, according to Alliant. The argument comes straight from the outdated fossil fuel lobby playbook, which has argued for decades that natural gas is a clean, low-carbon alternative to coal. In fact, calling it “natural” was part of a deliberate marketing campaign to make the public believe it was a safe energy source. Recent evidence shows, though, that the warming potential of natural gas rivals that of coal, not to mention the risks gas extraction poses to human health. Unfortunately, the tired discourse of bridge fuels—a branding trick that frames natural gas as a necessary stepping stone to the renewable future—lives on. 

Energy utilities’ sustained attachment to natural gas and coal makes sense: fossil fuels are artificially cheap and their use, planetary destruction aside, is sensible from the perspective of a business trying to maximize short-term profits. 

Especially painful, though, are greenwashing campaigns touting IOUs’ renewable energy goals and climate commitments. MGE brags in their marketing materials that they were “one of the first” utility companies to set a goal of zero-carbon emissions by 2050, a benchmark Alliant shares. But that benchmark is significantly out of step with the Biden administration’s stated goal of a carbon-free grid by 2035. In reality, these companies consistently obstruct pathways to a rapid and just transition. And they pass the costs of this obstruction onto consumers, who foot the bill for a hotter, less stable world. 

The attack on distributed solar

Not only do MGE and Alliant plan on charging customers more to keep burning fossil fuels, but they’re also scheming to slow the adoption of solar panels. Included in their plans for increasing electricity rates are changes to net metering, a policy designed to compensate owners of rooftop solar systems for the excess energy they feed back into the grid at a fair rate. Households with solar panels usually produce more energy during the daytime than they consume; the energy they don’t use gets rerouted to other households and is credited to their utility bills so they only pay for their “net” consumption of energy. 

Attacks on net metering are nationwide and have been coordinated with the help of the Edison Electric Institute, the country’s largest utility lobby. Conveniently for Wisconsin IOUs, they hosted a four-day course on electricity rates and “responding to the challenges of distributed energy resources” in Madison from July 23 through 26. 

MGE is setting out to replace net metering, which compensates solar energy contributed to the grid at the retail rate, with a model that will rebate small businesses and residents at the rate for solar systems exceeding 100 kilowatts, or a decrease from 13 cents per kilowatt-hour to 7.5 cents. The Alliant plan will reduce compensation for energy contributed to the grid from 7.1 cents per kilowatt-hour to 4.6 cents.

While the scope of the proposed changes differs slightly between MGE and Alliant, the goal is to siphon profits from individual solar providers, who the utility companies see as a threat to their monopoly over energy production and distribution. 

Their plans will make investing in solar panels for schools, churches, homeowners, and businesses more cost prohibitive, amounting to less solar capacity, and sustained reliance on a precarious and IOU-controlled grid. For example, in Detroit utility providers pursued a similar policy, substituting net metering with an “inflow-outflow” model, which has increased the timeframe to recoup the costs of investing in solar by 30%.

Distributed solar makes for a more resilient energy grid, which is essential as we adapt to more frequent extreme weather events and put more stress on our already-vulnerable system. And net metering makes small-scale solar energy more affordable and incentivizes the diversification of our energy sources. 

But leaving it up to individuals with the capital and the inclination is not a plan up to the task of averting climate catastrophe—and neither is business-as-usual, IOU foot-dragging.

Net metering is an important tool for incentivizing the adoption of rooftop solar, but a potent tool for achieving energy democracy it is not. While the costs of solar are on the decline, for low-income households and renters already faced with an extremely costly housing market, rooftop solar is simply not an option. 

Securing net metering—a policy certainly worth fighting for—amounts to a better, if compromised, negotiation. Instead, we should aim for a fundamental challenge to the nature of the relationship between residents and utility providers. It would be better to focus on wresting power from investor-owned utilities and putting it into the hands of the community, especially those most burdened by energy costs and climate change. 

How to intervene, literally 

IOUs are uniquely structured. They’re granted monopolies over service areas, meaning customers have no option but to accept the rates set by and means of energy production offered by the IOU. While IOUs are “regulated monopolies,” often regulation is lax, and abuse of customers is met with weak resistance.

Nonetheless, utilities cannot set the price of their services without government approval. Typically, with little fanfare, energy utility companies architect plans to increase rates for electricity, which are filed and then approved by a regulatory body called a public utility commission (PUC), or in Wisconsin’s case, the Public Service Commission (PSC). 

Movements for climate and energy justice, though, have raised the profile of rate cases, identifying them as an important site for challenging the IOU status quo, and illustrating that complex and technical energy policies are, at their core, about equity and power.  

Intervening in a rate case offers an opportunity for nonprofits and industry groups to join proceedings as an official party, meaning they can make legal arguments, conduct discovery, and file testimony. So far, there are over a dozen intervenors in the MGE and Alliant Rate Cases, including Dane County, 350 Wisconsin, and the Citizens Utility Board.

Individuals typically participate either through submitting a public comment to the PSC or testifying at a public hearing. As of now, public hearings and the public comment period for the MGE and Alliant cases have yet to be scheduled. Often though, public hearings for rate cases are scheduled at a time that conveniently minimizes public participation. Barriers aside, individuals can voice their concerns to the PSC about rate increases and proposed changes to solar policy—and, ideally, sway the Commission to side against utilities in favor of the public. 

Before relocating to Madison for graduate school, I participated in a rate case against one of New York City’s major utilities, Con Edison, which transformed into a city-wide campaign pushing for publicly owned, renewable energy. The rate case was the catalyst for the formation of the Public Power Coalition; four years after the start of that campaign, New York passed the Build Public Renewables Act (BPRA). The legislation dramatically expands the state’s renewable energy capacity, all while ensuring public ownership, provisions to protect low- and moderate-income customers, and guaranteed collective bargaining for all new renewable energy projects. 

Intervening in a rate case is one important way to challenge IOUs and raise awareness about their abuses, but, in isolation, it’s a tactic that puts the public on the back foot. Having a vision and proactive plan for an alternative energy system is vital. Without one, the harms of the current system will simply be reproduced in the clean energy economy. 

The case for public power 

Between life-threatening heat waves raging across the globe and wildfires rapidly burning millions of acres of precious, carbon-storing forest, the earth is quite literally on fire. Now is not the time to capitulate to unjust paradigms and beg for scraps from those in power—the urgency of the climate crisis demands we rethink the very structure of our energy system.

A fundamental problem with the IOU model: it’s gripped by the dogma of shareholder value. The utility’s priority, under such a perverse incentive structure, is turning a profit and generating dividends for investors at the expense of residents and the planet. Under this model, there is no voting to remove a CEO or choosing to subscribe to an alternative energy provider. Even members of the regulatory body charged with keeping utility companies in check are normally appointed to their positions by the governor rather than elected, which can lead to conflicts of interest. Essentially, there is no accountability and little room for public input.

Publicly owned and operated utilities, which don’t have the same drive for profit generation, are cheaper than IOUs. They also offer access to lower cost tax-exempt financing and offer more reliable service. And, perhaps most importantly, they’re accountable to the public—not to shareholders. In practice, this means the public has more agency to shape the local energy system and accelerate the transition to renewables without leaving low-income residents in the lurch. 

Public energy utilities are more common than you might think. In fact, public power providers serve 16% of all utility customers, or one in seven Americans, lest your IOU try to convince you that public power is a flight of fancy. Fighting for a publicly-owned, publicly-controlled energy utility that prioritizes the needs of the community is a winning strategy—we’ve seen it with the historic passage of the BPRA in New York. 

And it teaches us an important lesson: the structure of our energy system, including the utilities that govern our day-to-day contact with that system, is not the exclusive purview of technocrats and engineers. It’s a battleground for every person with an energy bill and a desire for a livable future.