We Energies Profits at the Expense of People and the Planet
Wisconsin and Milwaukee face a crisis in the affordability of energy, and a disproportionate energy burden imposed on low income communities of color. Wisconsin also lags in meeting the international deadlines to reduce greenhouse gas emissions require to head off runaway climate change.
We Energies, exploiting its lucrative government-mandated monopoly over a necessity of modern life, is a driving force behind the Wisconsin energy burden and climate crises.
First, We Energies imposes racially discriminatory energy burdens on red-lined communities which have been forced to live in zip codes with the oldest least energy efficient buildings, charging high prices and fees while blocking access to energy efficiency and renewable energy upgrades for low income homeowners and renters. As a result, Black and Brown Milwaukeeans often pay 10 to 20 times more of their income for energy than their white counterparts, forcing them to choose between keeping the lights on and basics such as food, rent, and medical care.
Second, We Energies is dangerously slow-walking the necessary climate transition to squeeze maximum profit out of the dirty coal plants it should never have built given the scientific consensus on climate change, while laying the groundwork to dominate the rising renewable energy system and lock in future price gouging.
The lobbying and political might We Energies has amassed has undermined the original social compact where the utility was guaranteed reasonable profits for operating in the public interest. Current Wisconsin energy policy is rigged to meet insatiable demand for more windfall profits by We Energies management and its Wall Street backers. The only way to return Wisconsin energy policy to the public interest, making it affordable and clean, is a grassroots movement to shift control from We Energies back to the people.
High Energy Burden is a Major Driver of Racial & Economic Inequality
Wisconsin energy prices are unnecessarily high for all consumers, and unaffordable for low income people, especially communities of color, because We Energies has grabbed the political
power to guarantee windfall profits without any reciprocal obligation to make energy truly affordable for everyone in its service area..
- Nationally there is a crisis in the affordability of energy, with 20 million Americans (one in six) behind on their utility bills. Utilities such as We Energies are allowed to profit from over-building. According to a UC Berkeley study, utilities are overcharging consumers $2 billion to $20 billion per year.
- The affordability crisis is worse in Wisconsin, where energy prices are the 2nd Highest in the Midwest. Wisconsin’s largest utility, We Energies, has jacked up rates at nearly double the rate of inflation since 2000. We Energies is asking for a large rate increase for its renewable energy investments, when it is one of the worst utilities in the country on climate change.
- The energy burden (the proportion of income paid for utility bills) is unaffordable for low income Milwaukeans, especially for African Americans. An energy burden of over 6% of income is considered problematic, yet the energy burden in Milwaukee Black and Latinx neighborhoods is often 7% to 10%, and sometimes as high as 15% or more. Worse, the poorest Milwaukeans (those below 1.5% of the Federal Poverty Limit) pay a shocking 20% of their income for utilities.
- The Energy Burden in the Milwaukee Metro Area is racially discriminatory. While 65% of Black residents, and 21% of Latinx residents live in neighborhoods with high energy burdens, 9% of whites live in such neighborhoods despite representing 67% of the metro area population.
- Past and on-going housing discrimination forces low income Black and Brown people to live in older energy ineffecient homes. Richard Rothstein’s book The Color of Law documents that housing discrimination was imposed with government authority. Nearly three-quarters of Black Milwaukeeans rent, and Mathew Desmond’s book Evicted shows that Black renters in Milwaukee are still forced to live in formerly redlined neighborhoods with poor housing stock. Shockingly, maps of high energy burden areas in Milwaukee closely match the old real estate redlines.
- We Energies has rigged the system for guaranteed profits, without any requirement to make energy truly affordable.
- We Energies is guaranteed a 10% profit rate, and as a result has 8 employees on the list of 100 top paid executives, with compensation packages ranging from $8 to $18 million per year.
- We Energies refuses to make energy affordable for customers who cannot afford the rates and fees they impose. Because We Energies loses profits when customers use less energy from their dirty coal plants, they are preventing low income Milwaukeans from accessing easy financing mechanisms available in Illinois and many other states that would allow low income homeowners to make energy efficiency upgrades or install solar panels at no upfront cost. We Energies has also done nothing to help low income renters, leaving them at the mercy of landlords who pass higher utility bills on to their residents.
We Energies is rigging the dangerously slow transition to renewable energy to protect windfall profits, forcing rate payers to foot the bill for a centralized wind and solar power system where energy will be controlled by them and will be much costlier and less efficient than it needs to be. The result is the worst of both worlds. Wisconsin is not moving fast enough to meet the greenhouse emissions reduction deadlines, and is allowing utilities to undermine the possibility of a more affordable and sustainable decentralized energy distribution system permitted by renewable energy and conservation technologies.
- Due in part to We Energy’s lobbying and obstruction, Wisconsin trails most other states in the critically important renewable energy transition, ranking 36th and trailing all our immediate neighbors. A 2022 study found that the resistance of the largest utility in a state has a controlling influence over a state’s climate policy.
- We Energies climate policies are among the worst in the U.S. According to an Influence Map Study (April, 2022) We Energies is the 4th worst large utility in the nation in resisting a climate transition. A Sierra Club report (October 2022) gave We Energies a D grade for its renewable energy transition. The Executive Chair of We Energies dismissed President Biden’s climate targets as “a moonshot.” Despite its glossy “greenwashed” public relations, We Energies is only 11% of the way in its absolutely necessary renewable energy conversion, and continues to operate on 73% dirty fossil fuels. Its largest plant burns nearly 60,000 train boxcars of coal each year.
- The We Energies business model, which wings massive profits from building large centralized power plants, is standing in the way of a rapid climate transition. We Energies wants to squeeze out profits from its existing coal powered plants, while slowly building a needlessly centralized renewable energy system that it can profit from and control. This is why it is using its enormous power to undermine rooftop solar, residential and business energy efficiency measures, and local governments seeking to build their own solar power.
Organizing is the Only Way to Achieve Affordable and Clean Energy
It is within the power of the state government to provide affordable energy regardless of income and zip code while also dramatically reducing greenhouse gas emissions. This is not a problem of policy, it is a problem of power.
We Energies has used the immense resources it has amassed from its government-mandated monopoly to wrest control of energy policy away from the public.
The only possible check on the power of this organized money is organized people willing to take it on and transform public policy. As Frederick Douglass famously said: “Power concedes nothing without a demand, it never has and it never will.