Wittenberg water rates will increase by 60 percent

By: 
Kevin Murphy
Correspondent

MADISON – Residential water bills for Wittenberg Municipal Water & Sewer customers will increase by 60 percent as the Public Service Commission Friday authorized the village’s first water rate hike in 25 years.

Village Clerk/Treasurer Traci Matsche said the new rates will be applied to quarterly bills after the Dec. 20 meter reading.

Average residential customers who had been paying $52.90 quarterly for 9,000 gallons of water will be paying $84.54 for the same volume under the new rates, according to the PSC rate order.

Rates for commercial, multi-family, industrial and public authority customers also will increase from 42 percent to 131 percent depending on customer category and usage.

The new rates will make Wittenberg’s water bills about average compared with similarly-sized utilities statewide, according to the order.

The utility requested a rate increase in March after the PSC expressed concerns in July 2017 about the utility’s “financial integrity.”

The PSC’s July 11, 2017 letter stated that the utility had “zero days cash available and has operated of $141,327 over the last two years.”

PSC said the utility was in a “financially critical state” and encouraged it to take immediate action or it may lack funds for routine maintenance, or have limited options to deal with an emergency.

The utility’s operating expenses have increased 118 percent since the last comprehensive rate case in 1995 and spending on infrastructure increased 380 percent in that time. As a result, the utility’s total expenses have been exceeding its revenue in three of the past four years, including net negative income of $72,382 last year. Without the new rates PSC staff estimated the utility will incur a $29,192 negative net income based on estimated revenue of $142,293 and total expenses of $171,485.

The new rates are projected to boost annual revenue by $93,093 to a total of $235,386 and yield a net income of $63,901 and a 4.9 percent rate of return of the net value of its infrastructure.

On Oct. 10, the PSC held a public hearing telephonically at the Community Center It reported that two water customers provided comments, with one questioning the rate structure the utility requested and another opposed the size of the increase and its impact on customers.

Four other customers attended the hearing but did not provide written comment in favor or opposed to the rate increase.

In Friday’s rate order, the commission found that the revenue that would result from the authorized rates is necessary to provide for the utility’s long tem financial needs and reflects the cost of serving its various classes of customers.

Village President William Switalla had previously said that the utility’s cash position wasn’t a bad as the PSC numbers would indicate because annual expenses include about $60,000 in depreciation cost, a non-cash item that doesn’t impact the utility’s ability to pay its bills.

The PSC wants utilities to include depreciation cost in its financial reporting to reflect the cost to replace infrastructure over time.

The PSC reprimanded the village in September after learning it had been switching out old water meters for automated ones without authorization since 2015. The PSC found that the meter project was valued at $132,392 which is above the threshold requiring approval prior to installation. Convinced that the utility understands the prior approval requirements, the PSC allowed the utility to recover the cost of the project in the just completed rate case.