Aug. 16—EAU CLAIRE — Energy bills were already slated to rise in 2023 for Xcel Energy's Wisconsin customers, but now the utility is seeking an additional surcharge due to higher costs to generate electricity.

State regulators agreed last year to let Xcel raise its electric rates for residential customers by about 4% in 2023 as part of a case that also included an increase this year.

In mid-June, the power company submitted a request to the Wisconsin Public Service Commission to allow it to also increase its electric rates next year, upping them by 1.8% for residential customers, due to rising fuel prices.

"We're seeing increases in fuel costs related to natural gas used to generate electricity along with increasing costs coming through Midcontinent Independent System Operator," explained Julie McRea, Xcel Energy's manager of regulatory affairs for its territory in Wisconsin and Michigan's Upper Peninsula.

(Midcontinent Independent System Operator is an independent organization that runs the electrical grid for 15 states and the Canadian province of Manitoba.)

Without the newly requested rate increase, Xcel is forecasting it would have a $19.1 million shortfall in its 2023 electrical costs, according to its filing.

For the typical household that uses 750-kilowatt hours per month, their bills were already slated to go up next year by an average of $4.25 a month. If state regulators approve Xcel's new request, that monthly bill would go up by another $2.17, according to a notice customers received this summer.

Filing a fuel costs plan in the middle of a year is typical, McRea said, to set the next year's rate for electricity. She noted that the rates have gone up or down in prior years.

"It's really dependent on the market," McRea said.

Staff at the Wisconsin Public Service Commission are currently reviewing Xcel's request. A public hearing has been scheduled for customers and interest groups to voice opinions on the electric rate increase proposed for 2023.

That hearing is scheduled for 2 p.m. on Sept. 20 and will take place via online videoconference program Zoom.

Public comments can also be made online via the Public Service Commission's website.

Two Xcel customers from western Wisconsin wrote so far to argue against the rate increase, stating that residents are already struggling with higher costs, including bigger energy bills.

"From my point of view they increased their rates a lot the first of the year," Janelle Fischer of La Crosse wrote. "Those of us on a fixed income are already having a hard time. What we got for a raise was nowhere near that. I for one will soon have to choose electric/gas, food or medicine."

Xcel did raise base rates for both electric and natural gas customers at the start of this year. It was the utility's first electric rate increase since 2018 and first natural gas service hike since 2020.

For 2022, electric rates rose 9% for residential customers, adding $9.60 to the typical household's average monthly bill.

Natural gas rates went up 10%, adding $4.65 on average to the typical household's monthly bill.

Last year's case also set a 2% increase in natural gas rates for Xcel's residential customers in 2023, adding another $1.20 to their average monthly bills.

Base rates for natural gas service do not include costs for the fuel itself, which customers pay on how many therms they use at a current market rate.

While the rates charged for using electricity are rising, the base monthly cost for being a customer is going down. Last year Xcel had agreed to lower that monthly charge from $17 in 2021 to $16 this year. It will drop another $1 and reach $15 a month in next year's residential customer bills.

And although higher prices are leading to bigger bills, Xcel customers also are using a little more electricity so far this year. The company compared electric usage from January through July this year to the same months in 2021.

"We can see that electric residential customer usage is up by 0.8%," McRea said.

At the end of the year, the company will do its analysis of electricity and natural gas usage to determine what factors contributed to its customers using more or less energy, she said.