Madison Gas and Electric Company's Regulatory Update: Rebuking Staff Testimony on Board of Directors' Insurance Expenses

Strategic Insights -

Madison Gas and Electric Company (MGE) presented rebuttal testimony in the proceeding Docket 3270-UR-126, addressing concerns raised by Public Service Commission (PSC) staff on various items, including Board of Director insurance expenses and payroll adjustments. MGE's witness, Stacy A. Rhone, testified on behalf of the Company, rebutting certain staff testimony and providing clarifications on specific issues.

Key Takeaways:

  • MGE disputes the Commission's historic practice of including Board of Director insurance expense and Board of Director fees and expenses in rates, citing the benefits to customers from board oversight and protection.
  • The Company agrees with Commission staff on payroll adjustments for non-represented and temporary employees but disputes the decrease of 5 regular represented FTEs, resulting in a revenue requirement impact of $259,000 for 2026 and $267,000 for 2027 for electric, and $166,000 for 2026 and $171,000 for 2027 for gas.
  • MGE supports the inclusion of the Wisconsin Pollutant Discharge Elimination System (WPDES) agreement amount of $333,330 but seeks to clarify the revenue requirement impact of cost overruns for several solar projects.
  • The Company agrees with Commission staff on the accounting treatment for Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA) but requests to continue escrow accounting treatment for these items.
  • MGE requests to defer any potential impacts from the H.R.1 bill signed into law on July 4, 2025, ensuring both the Company and its customers remain whole.
  • The Company agrees with Commission staff on the depreciation rates filed in Docket 3270-DU-106, suggesting that the Commission should incorporate the rates from the cited docket if a Final Decision is issued prior to the open meeting in this proceeding.
  • MGE provided a customer notice to all customers pursuant to Wis. Admin Code SS PSC 2.10, distributing the bill insert in customer bills over one complete billing cycle mailed between July 1, 2025, and August 5, 2025.

Statistics:

  • Revenue requirement impact of adding back the 5 regular represented FTEs: $259,000 for 2026 and $267,000 for 2027 for electric, and $166,000 for 2026 and $171,000 for 2027 for gas.
  • Correct revenue requirement impact of the cost overruns for Badger Hollow II: $314,000 in 2026 and $314,000 in 2027.
  • Correct revenue requirement impact of the cost overruns for Paris Solar and BESS: $1,839,000 in 2026 and $1,735,000 in 2027.
  • Correct revenue requirement impact of the cost overruns for Darien Solar and BESS: $1,416,000 in 2026 and $1,361,000 in 2027.
  • Amount of WPDES agreement: $333,330.

Sources:

  • Direct-PSC-Colvin-7, Ms. Colvin addresses the adjustments for electric and natural gas operations relating to Board of Director insurance expenses and Board of Director fees and expenses.
  • Ex.-MGE-Rhone-2, the customer bill insert used to notify customers of the proceeding.
  • Docket 3270-UR-106, the referenced docket on depreciation rates.
  • PSC REF # 527462, the Reference number for Wisconsin Public Service Corporation (Docket 6690-UR-128 Final Decision at 8).
  • PSC REFF # 527450, the Reference number for Wisconsin Electric Power Company and Wisconsin Gas LLC (Docket 5-UR-111 Final Decision at 9).