Electric rates are going up as Milwaukee's least well off continue to struggle to pay their bills
There's both good and bad news on the energy affordability front in Milwaukee.
The good: Energy burden, measured as the percentage of income households pay for electric and gas service, fell slightly in the past three years as the post-pandemic economy improved and household incomes rose, according to a new study by the Sierra Club - Wisconsin Chapter.
In general, energy bills should take up no more than 6% of household income. In Milwaukee County, the average burden is just 3%, and it's 2% in the surrounding counties, according to the U.S. Department of Energy.
The bad: Those who have struggled most to pay their bills aren't necessarily reaping the benefits of the resurgent economy. Residents of some low-income neighborhoods are paying 20% to 26% of their income on energy bills, up from 15% to 20% in 2021, according to the Sierra Club study.
Those city residents have lost ground through a combination of stagnant earnings and a 14% increase in electric bills over the past two years.
And the pressure isn't going to let up. We Energies last week proposed a new round of rate increases that will push the average residential energy bill up another 15%, or $17 to $18 a month over the next two years.
That increase may not seem too bad to middle class rate payers who can absorb the added cost, but it can be crippling for households with incomes near the federal poverty level and already are paying 20% of their income to the utility and 50% or more on rent, said Cassie Steiner, senior campaign coordinator for Sierra Club-Wisconsin Chapter.
A household is considered cost burdened, or challenged to pay its monthly bills, if more than 30% of its income goes to housing costs, including utilities.
"When somebody's already spending a large percent, every penny counts," Steiner said.
Why are electric and gas bills going up again?
We Energies is seeking an additional $359 million from ratepayers in 2025 and 2026 to fill a revenue shortfall driven largely by the cost of its investments in solar energy construction and grid resiliency improvements. Those capital costs make up about 85% of the amount the utility is seeking.
The utility is proposing to make up its shortfall with rate hikes that will add $10 to $11 to the average residential bill in 2025 and another $7 to $8 in 2026.
Who is most affected by rising utility bills?
In Milwaukee, the challenge of energy affordability is felt most keenly in the majority Black neighborhoods north of North Avenue between North 35th and North Holton streets, who on average pay 7% to 9% of their monthly income to heat their homes and keep the lights on.
That disproportionate burden on people of color plays out across a large swath of the city, from the near south side to the northwest, the Sierra Club study found.
While 16% of Milwaukee’s metro population is Black, 65% of residents of high-burden neighborhoods are Black. Hispanic households make up 19% in in high-burden neighborhoods.
In contrast white people make up about two-thirds of the Milwaukee metro area’s population, but account for 9% of the population in high-burden neighborhoods.
"That disparity is staying the same or getting worse even though the number (of burdened households) is going down a bit," Steiner said.
Adding to the challenges, Wisconsin's winter utility shutoff moratorium has ended
The seasonal moratorium on utility shutoffs for non-payment of electric and gas bills ended Monday.
That means customers face a loss of power if they don't sign up for a payment plan and stick to it.
Customers who are behind on their bills can go to we-energies.com, use the We Energies app or call (800) 842-4565 to set up payment arrangements and connect with financial and energy assistance options.
We Energies also warns customers to beware of scammers who may threaten to turn of power if they don't receive immediate payment, often with a prepaid debit card, payments through Zelle or Venmo, or even payment in Bitcoin.
More: Should utility bills be based on ability to pay? It's under consideration in Wisconsin.
What help is available for families struggling with their utility bills?
We Energies since 2021 has offered a Low Income Forgiveness Tool, a program in which half of a customers outstanding bill can be forgiven if they enroll in a payment plan and consistently make payments for 12 months.
More than 36,000 households were enrolled in LIFT in 2023, We Energies reported. The utility in its rate filing is seeking to recover $156 million in bad debt and other program costs that have accumulated since the start of the program.
Customers who wait to enroll before their power is cutoff need to pay a $600 reconnection fee before they can participate.
The Wisconsin Home Energy Assistance Program also offers assistance with energy bills and weatherization. Participation is limited to households with incomes less than 60 percent of the median state income, or $54,678 for a three-person household.
How can I weigh in on We Energies' rate increase?
At this point, there's only a preliminary filing that will be fleshed out in coming weeks. After that Wisconsin Public Service Commission staff and parties that register to intervene in the rate case will gather information for formal comments to the PSC.
The Wisconsin Citizens Utility Board, which advocates on behalf of utility customers, last week
The PSC will open a public comment period later this year and in-person public hearings are typically held in fall.
This article originally appeared on Milwaukee Journal Sentinel: Electric rates going up as challenges grow for Milwaukee's least well off
