Aarrowcast seeks to intervene in SMU rate increase

Utility seeks 2nd hike this year

Shawano Municipal Utilities has asked the state Public Service Commission for another hike in electric utility rates, but one of its largest industrial customers opposes the request.

Iron foundry Aarrowcast Inc. has filed with the PSC for intervention and full party status in the case.

“Electricity pricing is a key determinant in the ability of Aarrowcast to remain a profitable, contributing member of the Shawano community,” the company said in its filing. “Any increase to Aarrowcast will be detrimental to the company and its employees, particularly as the utility received an increase less than one year ago.”

Approval of the intervention, which was filed Friday, would give Aarrowcast a seat at the table when SMU makes its case for a rate increase to the PSC.

A date for that hearing has not yet been set.

“Aarrowcast’s participation in this proceeding will promote the proper disposition of the issues, because it will represent the interests of Shawano’s large industrial customers,” according to the filing. “No other Shawano customer has intervened to represent this interest.”

SMU filed with the PSC on June 30 seeking a 1.7 percent increase, which would be its second increase this year.

City Administrator and SMU General Manager Brian Knapp said SMU has fallen short of revenue expected since the new rates went into effect, largely due to changes in behavior by large industrial customers.

Some of those customers, he said, have shifted more of their production to off-peak hours to take advantage of lower overnight rates between 8 p.m. and 8 a.m.

The utility’s request is based on its projected rate of return. The actual rates are set by the PSC.

SMU applied to the PSC last year year for a rate increase that would deliver a 5.5 percent rate of return.

That request was the result of the utility falling short of the 6 percent rate of return the PSC authorized in 2014.

The rate increase that went into effect at the beginning of this year increased monthly bills by an average of about 1.94 percent.

Knapp said the new increase, if approved, will likely be geared more toward industrial customers, but it’s possible commercial and residential users could also see another increase.