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Water rates on the rise

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news New Richmond, 54017

New Richmond Wisconsin 127 South Knowles Avenue 54017

Village of Somerset Water Utility customers will be seeing higher water bills in the coming months thanks to an increase in water rates, if approved by the state.

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According to utility clerk Brenda Neumann, the increase request filed with the Public Service Commission of Wisconsin (PSCW) is necessary due to a 412 percent increase in the gross plant investment and a 392 percent increase in operating expenses since the last water rate case in 1988.

The rates from 1988 have been adjusted through the simplified rate case process in 2000, 2002, 2003, 2006 and 2009 for inflation.

The village has requested a 5.5 percent rate of return increase from the PSC, which means the annual revenues from the water utility would increase by an estimated $138,142, or 38 percent, Neumann said. Of this amount, $81,347 would come from general service customers, and $56,795 would come from the public fire protection charge seen on the bills.

“The fire protection charge is not related to the purchase of the new fire department truck,” Neumann said. “Per the PSC one of the reasons that the public fire protection charges increase is larger than the overall rate increase of 38 percent is that the water utility has built over $1 million in utility financed plant since the last full rate case in 1988. Much of this plant is only now being properly allocated to the public fire protection charge.”

If the rate increase request is granted by the PSC, the water portion increase of the utility bill will depend on usage and meter size per customer, Neumann said. For example, an average customer using 11,000 gallons of water per quarter will see an increase in $45.63 to $59.94 , which is 30 percent (not including fire protection charge). If the new public fire protection charge is included in this number, the increase would be from $45.63 to $68.96, or 51 percent.

“The village currently pays a public fire protection charge of $91,612 and that will remain a municipal charge collected through property taxes,” Neumann said. “The increase in the public fire protection charge of $56,795 will be recovered through a direct charge to the water customers based on the equivalent meters method. This will be a charge to all utility customers, including schools and churches.”

The creation of a new public fire protection charge would require a $56,795 reduction in the levy limit, or the adoption of a resolution that says the levy limit should not be reduced. It would then go to referendum, according to a legal notice in the newspaper.

At last month’s village board meeting, board members were assured that if this increase is approved by the PSC, it should be another eight to 10 years before another increase would be necessary.

The board had also discussed going from quarterly to monthly billing, but decided against the change due to lack of support and an inevitable increase in staffing costs that would occur with more frequent billing.

For more information on the rate increase, contact Neumann at 715-247-3395.

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