By Kennedy Maize
Milwaukee, Wisconsin’s largest city (pop. 577,222), has taken the first steps to expel Investor-owned utility We Energies and replace it with a municipal power system. The Milwaukee Common Council, the governing body, last Friday (Nov. 6) approved spending $1.35 million to study the feasibility of acquiring We Energies assets. The vote was 15-0. 
Alderman Alex Brower, an avowed socialist, sponsored the amendment to the city budget to fund the feasibility study. He said, “We Energies’ days in this town are numbered. We will soon have public ownership of our public utilities, and this forthcoming feasibility study is the first step in that process.”
The budget measure goes to Mayor Cavalier “Chevy” Johnson, who has until close of business Nov. 17 to sign or veto it. Johnson, 40, is a Democratic former chairman of the Common Council. The online daily news service Urban Milwaukee reported, “A spokesperson for Johnson did not immediately respond to a request for comment.”
The city council members had major complaints about We Energies and their continually rising energy rates. The vote came the same day the Public Service Commission of Wisconsin approved an increase in We Energies rates.
The utility commission billed the action as reducing what We Energies had asked for, without specifying the monetary details of the reductions. In a public statement, the PSC said it “made decisions that better protect customers by cutting spending that provides no customer benefit, authorizing resources to help reduce electric outages, and improving customer assistance programs.”
A We Energies spokesperson issued a statement to Urban Milwaukee: “We share the Common Council’s concern about energy costs, and we work every day to keep bills as low as possible while providing customers with the reliable energy they depend on. But spending $1.35 million to study a city takeover is the wrong path for Milwaukee.
“Cities that have explored this have found it can cost billions of dollars, take years and put customers at risk. Ann Arbor spent about $500,000 studying the idea, and this week its voters rejected a proposal to create a city-run electric utility.”
We Energies is the trade name of Wisconsin Electric Power Co. and Wisconsin Gas LLC, subsidiaries of WEC Energy Group (NYSE:WEC). We Energies serves some 1.2 million electric customers, 1.2 million gas customers, and 369 steam customers. WEC provides electricity and gas to over 4 million customers in Wisconsin, Illinois, Minnesota, and Michigan.
Milwaukee’s council action is a first and tentative step in what has historically been a long, and often unsuccessful, process, which the council recognized. Urban Milwaukee reported, “Brower acknowledged Friday that the effort could face substantial political and legal resistance, including the possibility of changes to state law. ‘I think we should expect nothing less than a change to state statute to prevent Milwaukee from doing this,’ he said.” Among the necessary steps will likely be a referendum.
WEC has deep pockets and will surely mount a major defense against further moves by the city. They will have history on their side.
The Brattle Group consulting firm, which has long experience in municipalization efforts, notes that “while numerous municipalization initiatives have been launched across the United States over the past 25 years, fewer than 10% have ultimately resulted in the creation of a lasting municipal electric utility.”
According to the American Public Power Association (APPA), the Washington lobby for municipal electric systems, the most recent successful municipalization came in 2013 in Washington state as Jefferson County on the Olympic Peninsula acquired the assets of Puget Sound Energy (PSE) in the eastern portion of the county. Voters in 2008 by 54-46 percent approved turning a tiny public utility district with less than 10 employees providing water and septic service with a $2 million annual budget into an electric utility.
After two years of negotiations, the county agreed to pay the utility $103 million for the relevant assets. Bellevue-based PSE is owned by an Australian and Canadian consortium of private investors. Jefferson County PUD now serves 20,000 electric customers and 5,000 water and sewer customers and a $50 million annual budget.
Milwaukee, of course, is far larger. Ursula Schryver, APPA senior vice president, education, training and events, told The Quad Report, “The most recent municipalization involving a community of comparable size was the creation of the Long Island Power Authority in 1998. Today, several communities, including San Francisco, San Diego, and St. Petersburg, Florida, are exploring municipalization.
“We have been following Milwaukee’s efforts and have provided information about public power and the municipalization process. A feasibility study is an important step in evaluating whether public power is the right fit for a community, and we commend Milwaukee for undertaking that careful review.”
The Quad Report, covering energy policy and politics