The Public Service Commission (PSC) has approved the Whitewater Municipal Water Utility application to increase water rates. Effective April 28, 2023, the average residential water customer with a ⅝-inch or ¾-inch meter who uses ~3,000 gallons per month can expect a $7.27 increase in their monthly water charges. The average water bill will increase from $24.55 to $31.82.
Due to water utility infrastructure costs, the water rate case was filed with the PSC on July 31, 2022. The PSC regulates water utilities in Wisconsin and determines rates. After reviewing the rate case, the PSC determined a 30% increase was necessary and issued its final decision on February 15, 2023. The PSC requires the Whitewater Municipal Water Utility to implement the new rates within 90 days. Rates are typically implemented at the end of a billing period. The last of the billing periods that fall within that 90-day window is April 28th, 2023. A meter reading will take place on April 28th. Water used after this date will be billed at the new rate.
This rate increase is, in part, due to the need to replace the two 100-plus-year-old reservoirs with a new water tower. This
replacement has been on the capital planning horizon for several years. Due to the historically low interest rates, the availability of ARPA grant funding, and support of the newly established Tax Increment District, the planned replacement of these reservoirs was pulled forward into the 2022-2023 biennial budget. Unless significant new projects are undertaken, an additional rate increase is not expected for some time.
The approved rate increase provides an additional $687,376 in annual revenue, which will result in an estimated overall rate increase of 30.07 percent over the water utility’s present revenue. This revenue is required to enable repayment of project borrowing while maintaining compliance with bond covenants. These rates are expected to produce a rate of return on the utility’s net investment of 6.6%. This rate of return is used by the PSC as a requirement to maintain confidence in the Utility’s financial integrity. The PSC updates its required rate of return periodically based on a three month rolling average of municipal bond rates.
Editor’s note: The above notice was provided by the City of Whitewater.
