Wisconsin Utilities Rake in Increased Profits as Wind and Solar, Transmission Spending Increases
Government-approved monopoly utility companies in the Midwest continue to pad their guaranteed corporate profits by building more wind and solar installations, along with the transmission lines needed to transport the energy generated by them to far-away population centers.
This time, it is Wisconsin utilities that are doing the profit padding by adopting the same language used by Xcel Energy to mislead consumers on the cost of their electricity, according to the Wisconsin State Journal.
“Alliant Energy announced a 7% increase in its 2020 dividends Wednesday as it reported earnings of $226 million in the third quarter of 2019.
That’s up almost 10 percent over the same period last year, which Alliant attributes to its growing capital investments, on which regulated utilities are guaranteed a profit.
The Madison-based company, which controls utilities in Wisconsin and Iowa, expects to spend $6.8 billion over the next four years, including about $1.7 billion on renewable generation.”
According to an earnings call from Alliant Energy, much of the spending will be on renewable projects and electric system infrastructure, which likely includes transmission lines for linking wind and solar installations built in Iowa to consumers in Wisconsin. Unfortunately, the call was light on details, as several hundreds of millions of dollars are simply listed as “other” spending.
The State Journal Article continues:
“About $2.9 billion of that investment will come from Alliant’s Wisconsin subsidiary.
Alliant last week announced plans to acquire up to a gigawatt of solar generation by 2024 and is in the process of building a gigawatt of wind capacity in Iowa, though the majority of the capital spending will be on gas and electric distribution systems.
While these investments drive profits for shareholders, they can also benefit ratepayers by eliminating fuel costs — a strategy known as “steel for fuel.”
Utility companies often claim that steel for fuel saves customers money, but the facts dictate otherwise. As we have noted several times, steel for fuel does not really substitute coal for wind or solar, it substitutes coal for wind, solar, and natural gas, enough natural gas to provide 100 percent of the electricity needed in the event that wind and solar are providing zero energy to the grid, like they did during the polar vortex of early 2019.
Overbuilding the grid in this way is a key reason why residential electricity rates in Minnesota have continued to skyrocket since our state began mandating wind and solar on the grid. Xcel Energy, which openly advocates for more renewables, has seen their prices increase far faster than other Minnesota utilities.
While prices paid by Minnesota families have increased, Xcel Energy has been reaping record profits, and the same is true utilities in Wisconsin like Alliant and We Energies. The graph below shows Xcel’s profits increasing as renewable generation grows in Minnesota.
Every conservative in the Midwest should know that these monopoly utility companies are not private companies and that the spending they partake in is done with the purpose of driving up their guaranteed profits. Unlike private companies who must compete for customers in a free market, the incentive for these companies is to spend as much as possible to make more money because they know their customers are forced to buy their product by state governments.
This is not a free market and until there is, conservatives have an obligation to argue for the lowest-cost resource portfolios and an obligation for allowing customers to choose their own electricity provider.