2023 Rate Changes
Delivering security, comfort and quality of life
Who we are
Superior Water, Light and Power Co. (SWL&P), a wholly owned subsidiary of ALLETE Inc., delivers reliable electricity, natural gas and water to customers in Superior, Wisconsin, and adjacent areas. We have served the city of Superior and surrounding areas in northwestern Wisconsin since 1889 and provide security, comfort and quality of life to 15,000 electric customers, 13,000 natural gas customers and 10,000 water customers. We do not provide sanitary sewer or trash removal services, and we do not receive any income from property taxes.
By purchasing electricity at wholesale prices, we are able to combine reliable service with rates that are among the lowest in Wisconsin and competitive nationally. Having connections to two interstate pipelines also provides for competitive rates and enhanced reliability for our natural gas system. Our state-of-the-art water treatment system draws water from Lake Superior, provides high-quality water to customers and has the capacity to serve large industrial water users.
How are utility rates determined?
Like most businesses, utility rates are set taking into consideration normal operating expenses such as labor, fuel and a return on capital investments used to buy equipment—costs for providing natural gas, water and electric services to homes and businesses. Unlike most businesses, Wisconsin's largest utilities are a state-regulated monopoly. In return for monopoly status, utilities have an obligation to serve all customers. The PSC regulates these utilities and their rates. When a utility requests a rate change, the PSC reviews the request. Based on a PSC audit and customer testimony in public hearings, the PSC sets utility rates.
Utility rates include an amount that is based on a rate of return for shareholders up to an amount capped by the PSC. If the year does not go as well as expected, utilities earn less than the amount authorized. If the year is better than expected, they earn more. The rate of return for shareholders is not guaranteed but does depend on how well a utility operates. Weather also affects how much energy customer’s use, which in turn affects the rate of return.
There is a difference between natural gas and electric bills. For electric bills, the cost of fuels (such as coal and natural gas) is figured into rates. Electric rates include the costs to produce, purchase and deliver electricity. For natural gas bills, the rates cover a utility’s costs to deliver gas to customers—but not for natural gas as a commodity. That is a separate charge that utilities pass on to customers without a markup.
What is a utility's "rate of return"?
A utility’s authorized “rate of return” is the percent return on shareholder equity that a utility is authorized to recover in utility rates. It is set by the PSC and is designed to fairly incent sufficient equity investment in Wisconsin utilities while keeping utilities’ cost of debt relatively low. Notably, the return is not guaranteed. If the utility does not adequately control costs it will earn a lower return for its shareholders. In recent years, authorized returns in Wisconsin have fallen from over 12% to just above 10%. The level of return allocated to shareholders for Wisconsin utilities is similar to returns approved for utilities in other states.
What are the proposed Rate Adjustments?
SWL&P is requesting an overall rate increase of 2.7%, or $3.3 million, comprised of a 3.1% increase in electric rates, an 8.7% increase in gas rates, and a 9.6% decrease in water rates.
Note: The filing on April 29, 2022 is the start of the rate application with Public Service Commission. The Company will file respective Cost of Service and Rate Design in the next month. The PSCW will perform its own review and respective adjustments during this summer. The filing is based upon the future (2023) and will make necessary adjustments as part of the process. Once the audit is complete, new rates will go into effect January 1, 2023.
More information about rates
Q: How often can SWL&P raise utility rates?
A: On average Wisconsin utilities file an adjustment every two years with the PSCW. SWL&P provides information to the PSCW on upcoming projects and the most recent expenses but the PSCW has final approval of any rates billed to customers.
SWL&P’s last rate review was requested in 2018, with rates going into effect January 1, 2019.
Q: Does the Superior Refinery have anything to do with a reduction to water rates?
A: Yes. In SWL&P’s last rate review, the water utility received a larger increase in rates partially due to a fire that occurred at the Superior Refinery damaging their facility. The temporary loss of SWL&P’s largest water customer was challenging, but the Company worked with PSCW staff to develop a plan for ongoing water system maintenance that also protected customers as the refinery was rebuilt. Now, with expected higher water sales SWL&P is asking the PSCW to make a rate adjustment that will lower water rates for all customers.
Q: What is causing the increase in electric and gas?
A: The requested rate adjustments reflect changes in revenue, expenses and customer base across all three utilities. In order to maintain safe and reliable operations, SWL&P must continuously re-invest in its infrastructure. This rate proceeding includes reliability updates at Company substations, upgrades to the natural gas distribution system, and other routine projects. SWL&P makes upgrades to utility infrastructure to ensure safe and reliable delivery of electric, gas and water services for many years in the future.
Q: Why are the rate changes different for electric, gas & water?
A: Because each of SWL&P’s three utilities – electric, natural gas and water– must stand alone financially, the rate change for each reflects each utility’s expected costs.
Q: How will the change in rates affect my bill?
A: SWL&P files with the PSCW in two parts. This first portion determines the overall revenue needs of the Company. The second portion, which SWL&P will file in approximately 30 days, will include a proposal of rate changes for each type of customer (residential, commercial, industrial, etc.) (Rate Class and Utility) based on the filing.
The PSCW will review and makes necessary adjustments with any new information during the review process this summer and fall timeframe.
Q: How can customers offset the rate adjustments?
A: The easiest way to offset any increase under the rate adjustments is to conserve energy and water. A convenient way to accomplish this is to sign up for MyAccount at the SWL&P website. MyAccount allows customers to track their energy and water use in real time. Tracking your use can help isolate any problems or offer ideas for conservation. For instance, a leaking toilet can be the most expensive leak in a home, but the least expensive to fix. Utilizing MyAccount allows you to keep a close eye on your water usage to catch instances such as these.
Customers also can request a free Home Energy Assessment through Focus on Energy, a nonprofit organization that partners with Wisconsin utilities to help customers conserve energy. Contact us at 715-394-2200 to schedule your free home energy assessment. Focus on Energy also offers free energy-saving products and other incentives, such as $75 toward qualifying smart thermostats that can save up to $120 annually in heating costs.
Q: Why do I have to pay a monthly fee even if I don’t use any energy or water?
A: The monthly fee charged to customers is a fee to cover the wires and pipes needed to attach your house to the system. Even if you don’t use any energy or the water, the fee is in place to ensure you have access to it if you need it.