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WUI Board of Directors Tours Wisconsin’s Largest Hydro Dam

Jim Falls Dam, Chippewa Falls, WI

 

WUI Board Members and Staff from left to right; James Buchen, Charles Clarke, Roger Cole,Michelle Lancaster, Phillip Mikulsky, Walter Woelfle, Thomas Fehring, Jeffery West, Richard Krueger, Kenyon Kies, and Trudy Popenhagen.

 


On June 15, 2017, members of the Wisconsin Utility Investors Board held  a board of director’s meeting in Chippewa Falls and toured the state’s largest hydro dam (in terms of generating capacity) at Jim Falls. The dam is an impressive engineering accomplishment, built in 1988 and functioning at full capacity today while preserving and contributing to the natural beauty, habitat and leisure access of the area. Board members were grateful to Xcel Energy for the opportunity to learn more about the powerful contribution of this hydro dam in terms of energy and preservation of our natural resources.

Legislative Update

The 2017-18 Legislature convened its first regular session in January of this year.
In February, Governor Walker introduced his Biennial Budget proposal (AB 64/SB 30)
which governs the state’s taxing and spending for the next two years beginning in July
2017. The Legislature’s Joint Finance Committee has begun its review of the proposal
and the Budget is expected to occupy most of the Legislature’s time and attention until
the bill finally passes in late June.

Of significant interest to utility shareholders, legislation has been introduced by Senator
Stroebel and Representative Ott (SB 115) that will allow the Wisconsin Public Service
Commission (PSC) to retroactively modify or terminate, existing and previously approved,
leased generation contracts. Currently, under such contracts, public utilities are able to
lease electrical generating facilities from their affiliates. This type of financing arrangement
has been used in Wisconsin to facilitate the investment of billions of dollars in new generation
facilities in recent years.

Under current law, the PSC may modify or terminate such contracts only as specified in the
contract itself, or the original order approving the original contract. Under the provisions of
SB115, the Public Service Commission could unilaterally invalidate or modify these contracts
which could significantly impact a utilities rate of return and dividend payout.

The sponsors of the bill believe that modifying these existing contracts will force a
reduction in electric rates. However, the current rates are necessary to generate a fair rate
of return for utility shareholders based on the recent investments Wisconsin utilities have
made in new electric generation.

If this proposal makes investment in Wisconsin utility stock less attractive for many small
investors, it will become more difficult for Wisconsin utilities to raise the necessary capital
to maintain and upgrade our electrical system. In the long run, this hurts consumers
who will have to pay even higher rates to finance the additional borrowing and internally
generated capital needed to replace their equity investment.

Investors seeking stability and reliability have the choice of investing in a wide range
of electric utilities across the country. To the extent that Wisconsin utilities become a
less attractive investment option, shareholders can go elsewhere, while consumers in
Wisconsin are simply left with higher electric rates.

Wisconsin utilities, WUI and many key legislative leaders have already expressed concern
over this bill. You can add your voice of opposition by attending WUI’s Legislative Day in
Madison on May 24, 2017.

2016 Election Preview by James Buchen, Executive Director, WUI

james-buchen

James Buchen, Executive Director, WUI

With the election just weeks away the race for the Whitehouse is beginning to close. The fact that Donald Trump has become competitive nationally as well as in Wisconsin has eased concerns by some Republicans that a poor performance at the top of the ticket might adversely affect candidates down ballot. In the race for the U.S. Senate, former Senator Russ Feingold has been leading in the polls but the race remains close. The outcome of the Wisconsin Senate race could swing control of the U.S. Senate, though it is looking increasingly likely that Republicans will retain control of that house in the next congress. Similarly Republicans are expected to retain control of the House of Representatives next session as well.

In Wisconsin, the Legislature is currently controlled by Republicans with a margin of 19 to 14 in the State Senate and 63 to 36 in the Assembly. Half of the members of the Senate are up for election this year but there appears to only be one truly close, contested race.  The race for the vacant 18th Senate District seat that includes Fond du Lac, Oshkosh and Waupun appears close, though analysis of its historic voting patterns suggests that it leans Republican. Regardless of the outcome in that race, the Republicans are likely to retain control of the State Senate.

In the Assembly, all 99 seats are up for election this year though no more than a dozen appear to be close contests. Even if the Republicans lose a couple of seats they will retain control of the Assembly.

From an energy policy standpoint the outcome of the Presidential election could have a significant impact on issues ranging from the EPA’s Clean Power Plan to oil and gas production and pipeline construction. In Wisconsin, with Republicans likely to remain in control of both houses and the Governor’s office, we should expect a sensible policy environment without any costly new energy regulations.

There is a lot at stake this election year.  Be sure to get out and vote on November 8th.

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