WPS Resources Corp. subsidiary, Wisconsin Public Service Corp. (WPS), said Friday that the Public Service Commission of Wisconsin has approved a new 3.5% increase in the utility’s electric rates and a 0.3% decrease in natural gas rates. The new rates begin March 21, 2003.

As a primary reason for its electric rate hike, the company cited necessary measures to ensure reliable electricity. In addition, the company noted that costs associated with a Kewaunee Nuclear Power Plant refueling outage and increased costs associated with electricity generation were major reasons for increased rates. Heightened security and infrastructure improvements also contributed to the new rates.

“As our electric plants and other facilities age, maintenance and upkeep become more and more of a factor,” said Jim Schott, assistant vice president – Regulatory Affairs for WPS. “We can’t afford to skimp on those areas if we’re going to continue to provide the high levels of quality and reliability that customers expect.”

Even with the increases, Schott noted that the utility’s rates would compare favorably with those of the state’s other investor-owned utilities. “We’ve had the lowest overall electric rates for some time,” he said. “That’s a result of working hard to manage costs while, at the same time, doing whatever we can to provide services that our customers value.”

Under the new rates, the bill of a typical residential customer who uses 630 kWh monthly will increase by about $2.49 to $55.83. Typical residential customers traditionally served by the utility who use 900 therms of natural gas annually will see natural gas distribution charges decrease by a monthly average of $1.16.

However, the utility noted that typical residential gas customers in the Manitowoc and Wausau areas, served by Wisconsin Fuel & Light prior to its acquisition by WPS, will see their natural gas distribution charges increase by a monthly average of $3.16. The company explained that the different rates for the two areas are different because the 2003 rates partially reconcile differences in the two companies’ residential gas rates from prior to the acquisition.

The company added that even though it is lowering its gas distribution cost, higher market prices for gas means higher gas bills for WPS’ customers. The utility said it will announce its plan to ask for new 2004 electric and natural gas rates around April 1.

WPS serves approximately 408,000 electric customers and 296,000 gas customers in Northeast and North Central Wisconsin, and an adjacent portion of upper Michigan including about 50,000 gas customers acquired in the Wisconsin Fuel & Light merger.

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