Wittenberg water rates could go up 60%

MADISON — An Oct. 10 public hearing on a request to double the cost of water for Wittenberg Municipal Water and Sewer Utility customers adds another event to the utility’s unusually active year.

In March, the water utility filed its first comprehensive rate case since 1995 on an order from the Public Service Commission. The utility had reported losses of $141,317 during the two previous years and had little cash on hand, which triggered the PSC to require a utility to file a rate case.

While reviewing the water rate application, PSC staff learned that the water utility had been replacing outdated water meters with automated meters since 2015 without PSC authorization.

In June, the PSC ordered a halt to the meter project to investigate. Earlier this month, the PSC reprimanded the utility for not seeking authorization before swapping out the old meters. On Sept. 16, the PSC authorized the project, which lifted the cease and desist order it had issued in June, and allowed the utility to recover the project’s cost in the pending water rate case.

Village Board President William Switalla said the meter project was nearly completed when ordered to halt, and it should be finished by the end of the year. Utility employees have been swapping out the manual-read meters with automated devices along with their other duties.

The PSC put the cost of the meter project at $132,000, which shocked Switalla. He said it was probably closer to $35,000.

“We budgeted for it every year … at about $10,000 for the materials … since we were already paying the employees,” he said.

Many municipalities around the state have been reprimanded by the PSC for gradually replacing old meters with new ones. They didn’t know that the PSC looks at a project’s total cost, and not the annual cost, which elevates the dollar figures on paper and puts them under the PSC’s jurisdiction.

The new meters transmit usage data that can be read without having to visit each meter location. It used to take two days to read all the meters in the village quarterly; now it will take two hours, Switalla said.

Customers will appreciate the new meters’ ability to better detect uncommon usage amounts, which can indicate a problem or leak that could lead to huge bills for the unused water and require correction action. The PSC will require the utility to review customer data and try to resolve cases within a month when the meters indicate unusually high or low consumption, based on parameters set by the utility.

The old meters contained lead; some were 30 years old, and replacements parts were getting difficult to find.

Since the village had gone more than two decades without filing a comprehensive rate case, the pending case calls for a 60% overall increase in rates. Average residential customers currently paying $52.90 quarterly for 9,000 gallons of water would pay $84.54 for the same volume of water under the new rates.

Those dollar amounts include the Public Fire Protection fee charged for hydrant maintenance and other firefighting-associated expenses the water utility incurs. Rates for commercial, industrial and public entity customers are also subject to change.

The PSC is taking comments on the rate request at an Oct. 10 public hearing at 3 p.m. in the Community Room of the Wittenberg Community Center, 208 Vinal St., Wittenberg. Sewer charges are also billed quarterly, but those rates are set locally.

The water utility’s total expenses have been exceeding its revenue in three of the past four years, with it posting a net negative income of $72,382 last year. This year, PSC staff estimates a $29,192 negative net income on estimated revenues of $142,293 and total expenses of $171,485.

However, Switalla say the utility’s cash flow isn’t as bad as what the PSC represents. The total expenses include about $60,000 annually in depreciation costs, a non-cash item that doesn’t impact the utility’s bank balances.

“Every year, the village (government) may pay some thousands of dollars into the utility, but we don’t write very big checks to cover the utility,” he said.

Switalla doesn’t put much stock in the PSC wanting utilities to calculate depreciation costs into total expenses. The PSC states that doing so gives a more complete view of the long-term cost of operating a utility.

“If we need to replace a treatment plant, we’re going to have to borrow money for it. We don’t have that kind of money laying around, and keeping tabs on depreciation won’t help pay for it, either,” he said.

Switalla expects the PSC to act on the rate request by the end of the year and for the new rates to take effect in early 2020.