Reliability Concerns Push Wisconsin Public Service to Ask for Higher Electric And Natural Gas Rates for 2002

Apr 12, 2001, 01:00 ET from WPS Resources Corporation

    GREEN BAY, Wis., April 12 /PRNewswire/ -- Wisconsin Public Service
 Corporation, a subsidiary of WPS Resources Corporation (NYSE:   WPS), today
 announced it was seeking new electricity and natural gas rates for 2002.
     Overall electric and natural gas rates would increase about 16% and 4.5%,
 respectively, if the request is approved as is.  Although the actual increase
 may vary between rate classes, applying the overall increase to typical
 residential customers would result in increases of about $7.62 per month for
 electric customers who use 630 kilowatt-hours, and $3.54 per month for gas
 customers who use 1,000 therms annually.
     "We've done a very good job of keeping our overall rates low," said Bill
 Bourbonnais, Public Service Manager - Rates & Economic Evaluation.  "Coming
 off a particularly difficult winter in terms of bills, we know this increase
 isn't going to make things any easier for customers.  But to continue to
 provide reliable electricity and gas service, we need to invest in our
 facilities."
     Bourbonnais noted that electricity continues to be a great value and that
 prices have been fairly stable for Public Service customers, especially when
 compared to normal inflationary pressures.  "Even with this increase, our
 overall electric rates have risen less than the Consumer Price Index in the
 last ten years," he said.
     Public Service has been the state's low-cost electric provider among
 investor-owned utilities in Wisconsin for several years, according to
 Bourbonnais.  "We know customers appreciate low rates," he said.  "Though this
 request may push our rates slightly higher than a few of the other state
 utilities in the short term, we expect that to be only a temporary situation."
     Much of the increase will go toward the costs associated with joining the
 American Transmission Company, created by the state legislature, and with
 making improvements to the Kewaunee Nuclear Power Plant.
     Improvements to Kewaunee account for 45% of the electric rate increase.
 New steam generators will be installed at Kewaunee this fall at a cost of more
 than $120 million.  That cost will be collected over the next 8 years.  In
 addition, the company needs to substantially upgrade the plant to ensure its
 reliability through the life of the license -- which will expire in 2013.
     "We need to make sure the plant operates smoothly and up to industry
 standards," said Bourbonnais.  "The nuclear industry has seen a significant
 increase in the level of performance of plants across the country and Kewaunee
 has to keep pace with those changing standards. Kewaunee is among the safest
 nuclear plants in the country.  But we can't afford to wait.  We need the
 electricity Kewaunee provides for our customers."
     Other contributing factors to the electric increase include the costs
 associated with operating, maintenance, and capital projects.
     The increase in natural gas rates will pay for improvements to computer
 systems and operating and maintenance costs and does not include the cost of
 the natural gas itself.  The cost of natural gas, which is passed on to
 customers, is a large factor in the price Public Service customers ultimately
 pay.
     The request is a starting point in working with the Public Service
 Commission of Wisconsin, which must approve any rate increase.  "There is
 usually some give-and-take and some modifications to the request because
 conditions at the time we develop the rate case and conditions moving forward
 may change," said Bourbonnais.  "As a result, and as is normally the case, the
 final rate structure is quite likely to be different from this initial
 request."
 
 

SOURCE WPS Resources Corporation
    GREEN BAY, Wis., April 12 /PRNewswire/ -- Wisconsin Public Service
 Corporation, a subsidiary of WPS Resources Corporation (NYSE:   WPS), today
 announced it was seeking new electricity and natural gas rates for 2002.
     Overall electric and natural gas rates would increase about 16% and 4.5%,
 respectively, if the request is approved as is.  Although the actual increase
 may vary between rate classes, applying the overall increase to typical
 residential customers would result in increases of about $7.62 per month for
 electric customers who use 630 kilowatt-hours, and $3.54 per month for gas
 customers who use 1,000 therms annually.
     "We've done a very good job of keeping our overall rates low," said Bill
 Bourbonnais, Public Service Manager - Rates & Economic Evaluation.  "Coming
 off a particularly difficult winter in terms of bills, we know this increase
 isn't going to make things any easier for customers.  But to continue to
 provide reliable electricity and gas service, we need to invest in our
 facilities."
     Bourbonnais noted that electricity continues to be a great value and that
 prices have been fairly stable for Public Service customers, especially when
 compared to normal inflationary pressures.  "Even with this increase, our
 overall electric rates have risen less than the Consumer Price Index in the
 last ten years," he said.
     Public Service has been the state's low-cost electric provider among
 investor-owned utilities in Wisconsin for several years, according to
 Bourbonnais.  "We know customers appreciate low rates," he said.  "Though this
 request may push our rates slightly higher than a few of the other state
 utilities in the short term, we expect that to be only a temporary situation."
     Much of the increase will go toward the costs associated with joining the
 American Transmission Company, created by the state legislature, and with
 making improvements to the Kewaunee Nuclear Power Plant.
     Improvements to Kewaunee account for 45% of the electric rate increase.
 New steam generators will be installed at Kewaunee this fall at a cost of more
 than $120 million.  That cost will be collected over the next 8 years.  In
 addition, the company needs to substantially upgrade the plant to ensure its
 reliability through the life of the license -- which will expire in 2013.
     "We need to make sure the plant operates smoothly and up to industry
 standards," said Bourbonnais.  "The nuclear industry has seen a significant
 increase in the level of performance of plants across the country and Kewaunee
 has to keep pace with those changing standards. Kewaunee is among the safest
 nuclear plants in the country.  But we can't afford to wait.  We need the
 electricity Kewaunee provides for our customers."
     Other contributing factors to the electric increase include the costs
 associated with operating, maintenance, and capital projects.
     The increase in natural gas rates will pay for improvements to computer
 systems and operating and maintenance costs and does not include the cost of
 the natural gas itself.  The cost of natural gas, which is passed on to
 customers, is a large factor in the price Public Service customers ultimately
 pay.
     The request is a starting point in working with the Public Service
 Commission of Wisconsin, which must approve any rate increase.  "There is
 usually some give-and-take and some modifications to the request because
 conditions at the time we develop the rate case and conditions moving forward
 may change," said Bourbonnais.  "As a result, and as is normally the case, the
 final rate structure is quite likely to be different from this initial
 request."
 
 SOURCE  WPS Resources Corporation