Water rates for average residential customers of the Shawano Water and Sewer Utility will increase by 23%, or $5.43, monthly effective Dec. 31, according to the utility.
The cost for average residential customers using approximately 3,000 gallons of water a month will increase from $23.71 to $29.14, according to a rate order the Public Service Commission issued on Dec 4.
The above amounts include the Fire Protection Charge the utility collects for hydrant maintenance and other costs it incurs association with firefighting.
Rates for multifamily, commercial, industrial and public authority customers increased between 25% and 43% depending on customer class and usage.
There were no comments made at the Nov. 14 public hearing on the proposed rate increase. The city accepted PSC’s revenue recommendation prior to the hearing.
It’s the first significant rate increase since February 2015, although the utility received a 3% overall increase against inflation from the Public Service Commission in 2018.
Since then, inflation, which has increased operating expenses, and additional investment in the utility’s infrastructure have reduced the 5.25% rate of return the PSC authorized in 2015 to a projected 2.45% this year.
The utility sought a 6.5% rate of return on the value of its infrastructure, which would have produced a 29% overall increase in rates. However, the PSC authorized a 6.3% rate, stating that it was the benchmark it had selected based on municipal bond rates in effect when the utility filed its rate application in June.
The new rates will boost the utility’s annual revenue by $431,732 to $2.188 million. Against total expenses of $1.482 million, the PSC projects the utility will have a net income of $705,788.
Without the new rates, the utility’s net income was projected at $274,056.
The city’s sewer rates increased this year by 14%, shortly after the PSC turned over regulating sewer rates to the city.
No increase in sewer rates is expected in 2024, said city finance director Greg Smith.
The city will likely continue the practice of seeking more frequent but smaller water rate increases to lessen the impact on water customers, he said.
“We’ll probably lessen the time between rate increases in order to make them less steep,” he said.
The water utility operates with relatively little debt, Smith said, choosing to finance many capital projects from its cash flow.
Among the capital projects planned for 2024 are replacing water mains at a cost of about $2 million, Patrick Bergner, water and sewer utility foreman said.
Community Development Block Grants will cover much of the cost with the city supplying small matching funds.
Mains buried below the streets are replaced during major street reconstruction projects. Next year, certain blocks of South Lafayette, South Lutz, South Franklin and St. Andrews streets will be reconstructed. Bids for those projects are scheduled to be opened this month, he said.
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