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Albany seeks water rate hike
Water Faucet

MADISON — The Albany water utility is seeking a 29.5 percent rate increase to finance system improvements totaling about $1 million, according to an application filed Oct. 11 with the Public Service Commission.

If approved as submitted, average residential customers currently paying $78.38 quarterly for about 9,700 gallons of water would pay $101.50 or $23.12 more per quarter, according to PSC and Albany Municipal Water and Sewer Utility documents.

The PSC authorized a 35 percent rate increase in June 2015 and the utility received a 3 percent increase last year in a simplified rate case, said Village Clerk Laurie Keepers.

The PSC typically requires that water utilities earn a 5 percent rate of return on the value of their infrastructure in order for them to meet their debt requirements and maintain financial viability. 

However, Albany’s pending rate case requests only a 2 percent rate of return. Keepers said that would minimize the impact on customers while still keeping the utility in the black.

“The PSC would like us to go for 5 percent … but the board considered a (rate of return) from 1 to 5 percent … and they went about as low as they dared to go,” she said.

Since the 2015 rate case, the utility has replaced a leaking standpipe, which the PSC previously approved at $452,735. The 80-foot-tall standpipe serves as a backup to the village’s water tower and is located in a wooded area north of Mineral St. and east of Robbers Cave Dr.

Public Works Superintendent Lonnie Gill said repairs to the 45-year-old standpipe were rejected due to uncertainty of future maintenance costs.

Rain has delayed construction of the new standpipe but it should be completed by Dec. 1, about a month ahead of the Department of Natural Resources deadline, Gill said.

He added that it will permit the village to take its 150,000-gallon water tower, located at E. Main and N. Summit Streets, off line for repainting its interior and exterior next year.

Rounding out the estimated $1 million in system improvements includes replacing some aging and undersized water mains and updating electrical components in a well house, Keepers said.

Without the rate increase, the utility would incur a $26,711 deficit next year after estimated revenue of $249.418 and expenses of $276,129. The utility’s cash situation is less dire than the numbers suggest as it is required to include depreciate costs of $60,291, a non-cash item, in its total expenses.

The 29.5 percent requested increase in water rates should boost annual revenue by $72,568 and prevent the utility from incurring the projected $26,711 income deficit, according to the rate application.

Keepers expects the PSC to set new rates early next year, after PSC staff has reviewed the application and recommended an amount of revenue the utility needs. Public hearings would be held simultaneously in Albany and Madison for input on the revenue recommendation before the commission takes final action.

A date for the public hearing has not been set.