• WisBusiness

Loehr: New leader at CUB, but mission remains the same
11/25/2013

Despite lackluster energy demand, the new acting Citizens Utility Board leader sees a continued role for CUB in working with the Public Service Commission to control future rate increases.

"Rate pressures remain high," Kira Loehr said in a recent WisBusiness.com interview. "There have been steady increases in Wisconsin from just about all of the major investor-owned utilities over the last 10 years, and it looks that is on pace to continue. CUB fights hard before the PSC primarily to keep those rates as tightly controlled as possible."

Loehr, who began practicing law in 2002, has been CUB's general counsel. Now she's also acting executive director, having taken over in October for Charlie Higley after he went to work for American Transmission Company as a system operator in training.

"I really believe in CUB's mission advocating for reliable, affordable and sound utility service. When the opportunity presented itself to come in house, I jumped."

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She said her organization is also assessing the need for new transmission lines across the state and is closely watching how much rates will go up because of additional air pollution control equipment that the federal government is requiring for coal-fired power plants.

"Each of the (proposed power lines) will need to be investigated closely to see whether they are needed and whether the costs that would be paid for by Wisconsin customers are commensurate with the benefits that they would achieve," she said.

Loehr said energy use has been flat in the state and even declining in some areas.

"I'm not sure of the precise reason, but it's been happening for the past few years since the Great Recession of 2008 and 2009," she said. "Demand dropped significantly then across all sectors, industrial, commercial and residential.

"It hasn't really rebounded from that point. This drop also coincides with energy efficiency efforts, new appliances getting changed out, more efficient refrigerators and heaters. It's a combination of all of that."

She said individuals and businesses are recognizing how conservation and efficiency can help them lower their bills by using less electricity.

"I don't see overall energy use going back up to where it was," she said. "Even if the manufacturing sector rebounds, that sector also understands the benefits of energy efficiency and trying to use energy as cost effectively as possible.''

She said the switch to less expensive and less polluting natural gas should help keep rates down.

"Natural gas use is definitely on the rise as more and more coal plants are switching to gas given the steep drop in price for natural gas over the last few years, it's become an attractive fuel for power plants and individuals and businesses," she said. "It appears those prices are going to stay low over the foreseeable future. At least the next couple of years, most projections show."

But Loehr says there still pressure to increase rates.

"In part, it's because utilities have high levels of fixed costs that they are seeking to recover," she said. "One of the things that I think needs to be looked at is whether those fixed costs can be lowered. The system was built to support a level of increasing demand that is no longer there."

Loehr doesn't see new pollution control requirements on coal-fired plants are a major reason for rate hikes.

"Honestly, that doesn't seem to be the primary driver of the rate increases over the past decade," she said. "It's been a combo of things like the construction of new coal-fired power plants. ... Right now, it is no longer cost-competitive with natural gas, and is becoming less competitive with renewable resources and certainly with energy efficiency. So I'm not sure, but I don't think the future of coal is one of growth."

Loehr noted the recent approval of the Highland Wind Farm by the PSC. Near Eau Claire, the wind farm could have as many as 44 wind turbines and generate 102.5 megawatts of electricity.

Small businesses and homeowners are continuing to add solar panels to their rooftops, but she said she's not aware of any utility scale solar projects in the state. And she said she's disappointed utilities aren't encouraging solar energy production by individuals.

-- By Brian Clark
For WisBusiness.com

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