The state Public Service Commission voted Thursday to approve a roughly 7% increase in We Energies' electricity rates spread across 2027 and 2028. For an average residential customer, that translates to a monthly bill increase of between $7 and $8 in 2027, followed by another $6 to $7 increase in 2028. It marks the utility's sixth consecutive rate hike.

We Energies had originally proposed a roughly 9% overall increase, including a 16% jump for residential customers. The commission's decision came after a 10-hour hearing in which commissioners repeatedly raised concerns about the cumulative burden on ratepayers.

"I do not believe we can ignore the cumulative impact of years of increases simply because each individual increase can be explained by a particular investment or expense," Commissioner Kristy Nieto said at the hearing's outset. She noted that customers are experiencing some of the highest rates in the region while the utility delivers strong returns for shareholders, asking whether "the scales are properly balanced."

The commission pared back the increase on several fronts. It lowered the utility's guaranteed rate of return from the 9.9% We Energies requested to 9.5%, saving ratepayers roughly $60 million over two years. We Energies shareholders typically earn 9.8% on their investment, with rates rising to about 10.5% for infrastructure serving data centers. Walmart had filed testimony calling the requested increase "unjustified," and the Wisconsin Citizens Utility Board had sought a cut of nearly a full percentage point.

Much of the new revenue will go toward renewable energy, natural gas and battery storage projects. We Energies serves more than a million customers in Wisconsin and parts of Michigan and Illinois, and its parent company has outlined a roughly $10 billion increase in capital spending over the next five years.

The commission also addressed cost overruns on renewable projects. We Energies was allowed to bill ratepayers for the full cost of a Kenosha County solar and battery facility that came in nearly 40% over its $433 million approved price tag, but commissioners barred the utility from earning a profit on the $166 million in unapproved spending. Commissioner Marcus Hawkins said the utility "chose to put their head in the sand" about risks that existed before it sought approval to buy the facilities. Two other projects — the Darien Solar Energy Center and the Koshkonong Solar Energy Center — are 35% and 42% over budget, respectively, and will be revisited in the utility's next rate case.

On stranded assets — retired power plants that customers are still paying off, totaling roughly $1 billion — commissioners extended the repayment timeline by six years and limited shareholder profits on the defunct plants. The Wisconsin Industrial Energy Group estimated those changes will save ratepayers at least $30 million by 2028.

Commissioners also rejected We Energies' request to bill customers $5.3 million for a portion of its board of directors fees, with Chair Summer Strand saying the board provides a "shareholder benefit, not a customer benefit." The commission allowed only partial recovery of the utility's $4 million in industry association dues, calling the justifications "flimsy."

For customers who fall behind on bills, the commission lowered the minimum payment required to restore service from 80% of past-due balances to 50%, and capped the maximum down payment for low-income households at $100, down from $600. Strand called the previous $600 cap "atrocious." We Energies disconnected roughly 60,000 customers last year, including about one in six households in parts of Milwaukee's North Side.

In response to the rate hike, the Milwaukee Common Council voted unanimously Friday to allow borrowing of up to $1.35 million for a feasibility study examining issues related to a potential city takeover of We Energies. The funding measure still requires approval from Mayor Cavalier Johnson.

The decision comes two days after Wisconsin voters elected a Democratic trifecta to state government, with a new governor and legislative majorities poised to shape the largest energy buildout in Wisconsin's living memory. Strand used the rate case to renew her criticism of the state's regulatory framework, saying the commission is "hamstrung by an inadequate and outdated regulatory framework" and that "the majority party that has been in power since 2011 has refused to consider beneficial changes."

We Energies spokesman Brendan Conway said in a statement that the commission's votes support key investments, including more Wisconsin-produced energy, tree trimming to reduce outages and undergrounding power lines. He said the utility's typical customer bills remain below the national average and in line with the Midwest. The Citizens Utility Board applauded the commission's efforts but Executive Director Tom Content noted the utility had sought nearly half a billion dollars — $449 million — over two years, and that the savings, while potentially in the hundreds of millions, were not enough to prevent an increase.

Shares in WEC Energy Group, We Energies' parent company, hit an all-time high of $120 shortly before Thursday's hearing before falling to $116 by Friday morning.