Water bills for average residential customers of the Gillett Water and Sewer Commission will increase by 21 percent, or about $3 a month, according to an order issued Dec. 22 by the Wisconsin Public Service Commission.
The water rate hike is the utility’s first since 2007, but follows increases the city imposed this year in sewer and garbage fess and a wheel tax.
Average residential customers currently paying $17.20 monthly for 3,000 gallons of water will pay $24.30 for the same volume of water when the new rates take effect.
A decision as to when to increase rates had not been determined as of the Times Herald deadline. Mayor Irene Drake said, at the earliest, the new rates could show up on bills mailed in February.
Drake referred other questions to Nanette Mohr, the utility committee’s chair. Attempts to reach Mohr were unsuccessful.
Rates for the utility’s biggest water customer, Seneca Foods, increased by 103 percent. Michael Hull, plant manager, opposed the rate increase at a Dec. 15 public hearing but declined last week to address the consequences of the rate increase on the food processing company.
“I won’t comment beyond that we opposed the rate increase,” he said.
Jason Blazek, of Northport Marine, asked the PSC at the public hearing to postpone a rate decision in order to address more concerns. Blazek declined to elaborate on his concerns regarding the rate increase.
In the Dec. 22 rate order, the PSC said it appreciated customer concerns about the rate request but concluded that the rates it approved provided for the utility’s long-term financial viability.
The utility posted income deficits of $3,389 in 2011, $28,746 in 2013 and projected losing $11.667 this year, according to PSC staff analysis. The utility’s combined profits for 2012 and 2014 did not exceed its recorded losses since 2011.
Total expenses increased from $322,352 in 2011, hit $403,300 last year and are estimated at $400,199 this year, according to staff analysis.
Meanwhile, revenue took a similar route with $318,963 reported in 2011, peaked at $407,497 last year and projected at $388,535 this year.
In July, the utility sought a 27 percent overall rate increase based on a 5.50 percent rate of return on the value of its infrastructure investment.
The PSC subsequently trimmed the rate of return to 5.25 percent, resulting in a 41 percent increase in revenue. The new rates will yield $148,713 in additional revenue, boosting annual revenue to $537,248 and the net annual income to $137,049, according to the rate order.
The utility’s water rates are below state average for similarly sized utilities, according to the rate order.
The PSC approved moving the public fire protection charge from property tax bills to water bills. It allows the utility to collect the $11.30 monthly charge from all customers, whether they have a tax-exempt status or not.
The PSC also eliminated the utility’s declining rate block structure for a uniform rate for all water used.
Declining rates have fallen out of favor with the PSC as the rates decrease as consumption increases and do not provide incentives to conserve water. Uniform block rates remain the same regardless of the amount of monthly consumption.
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