FINNEGAN, CONRAD & PETERSON L.C.

MGE 2000 Settlement Results in Effective Reduction to Transportation Rates;
Preserves Current Structure and Benefits

In late July, 2001 the Missouri PSC approved a settlement of MGE's most recent rate case, GR-2001-292.  MGE's original filing was for roughly $40 million; the settlement allows an rate increase of $9.9 million.  Of that increase, transportation customers were excluded from the first $5 million.  As a result, the increase to transportation rates was less than 1/2 the system average increase and achieves the same result as a reduction of roughly $300,000 on a revenue neutral basis from the transportation class before applying the increase.

In addition, the existing level of monthly customer charge for transportation customers ($409.30) was retained, but a significant increase to the residential and small commercial customer charges was approved.  Although Midwest would have preferred a larger shift from the transportation class and our evidence demonstrated an overcharge to the class of as much as $2.5 million, Midwest also obtained settlement of several outstanding judicial appeals and a refund to the transportation customers of $313,000 dating back to GR-96-285.

The class revenue shifts that were approved and the shift in emphasis to the customer charges for the residential and small commercial class are cost-justified changes that Midwest supported.  They will help to stabilize MGE's revenues, extending the day that it will have to seek additional rate relief  and move its rates more in the direction of cost of service principles.

 

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Updated 05/17/06