MADISON - Residential water rates will increase in the village of Albany by 35 percent next month, the first major hike in 17 years, according to an order issued Tuesday by the Wisconsin Public Service Commission.
Average residential customers currently paying $56.18 quarterly for 9,724 gallons of water will pay $76.10 for the sample volume when the new rates take effect June 18, the day after meters are next read, said Lonnie Gill, utility superintendent.
The new rates will show up on water bills mailed in October, he said.
Rates for commercial, multi-family and public authority customers also will go up between 33 and 44 percent depending on the customer category.
The $27.84 meter charge residential customers pay quarterly increases to $34.50. The Public Fire Protection Charge collected on property tax bills increases 18 percent from $80,701 village-wide to $94,492, according to the PSC order.
The higher rates are projected to boost utility annual income by $51,414 from $190,128 to $241,552. After expenses of $173,123, the utility would have an estimated net income of $68,429 and earn a 5.25-percent rate of return on the value of its infrastructure.
The utility had requested a 5.75-percent rate of return, but the PSC deemed 5.25 percent adequate based on the current cost to borrow money and operate a public water utility.
Without the new rates, the utility would have finished 2015 with a net income of $17,015 and a 1.31-percent rate of return.
The utility has made money in recent years; $29,250 in 2011; a high of $52,157 in 2012; and an estimated $29,427 last year, but the margins have been below the PSC's 5.25-percent benchmark rate of return.
In the order, the PSC strongly recommended that Albany evaluates its utility revenue needs annually and file for rate increases every two to three years, a cycle that utilities the size of Albany's are suggested to follow.
Although the utility has sought several small increases in recent years to keep up with inflation, Gill agreed that 17 years between full-rate cases is too long.
"I'm hoping that don't have to go in (for an increase) too often because I don't like rate increases either, but we probably went too long and things got a little tight," he said.
Routine increases can eliminate large spikes in water bills and help customers better manage their financial resources, according to the rate order.
The utility needs more revenue to finance replacing water mains and water meters, according to the rate application filed in December. Replacing water mains along Wisconsin 59 (N. Mechanic, Vine and parts of Main streets) is nearing completion and Gill expected laterals to individual addresses would be finished by this week.
Another capital project, replacing 444 aging water meters with new automated ones, will begin this fall. The change-out will save meter reading costs, provide better notice of water leaks and comply with federal lead standards but will cost an estimated $101,000.
Average residential customers currently paying $56.18 quarterly for 9,724 gallons of water will pay $76.10 for the sample volume when the new rates take effect June 18, the day after meters are next read, said Lonnie Gill, utility superintendent.
The new rates will show up on water bills mailed in October, he said.
Rates for commercial, multi-family and public authority customers also will go up between 33 and 44 percent depending on the customer category.
The $27.84 meter charge residential customers pay quarterly increases to $34.50. The Public Fire Protection Charge collected on property tax bills increases 18 percent from $80,701 village-wide to $94,492, according to the PSC order.
The higher rates are projected to boost utility annual income by $51,414 from $190,128 to $241,552. After expenses of $173,123, the utility would have an estimated net income of $68,429 and earn a 5.25-percent rate of return on the value of its infrastructure.
The utility had requested a 5.75-percent rate of return, but the PSC deemed 5.25 percent adequate based on the current cost to borrow money and operate a public water utility.
Without the new rates, the utility would have finished 2015 with a net income of $17,015 and a 1.31-percent rate of return.
The utility has made money in recent years; $29,250 in 2011; a high of $52,157 in 2012; and an estimated $29,427 last year, but the margins have been below the PSC's 5.25-percent benchmark rate of return.
In the order, the PSC strongly recommended that Albany evaluates its utility revenue needs annually and file for rate increases every two to three years, a cycle that utilities the size of Albany's are suggested to follow.
Although the utility has sought several small increases in recent years to keep up with inflation, Gill agreed that 17 years between full-rate cases is too long.
"I'm hoping that don't have to go in (for an increase) too often because I don't like rate increases either, but we probably went too long and things got a little tight," he said.
Routine increases can eliminate large spikes in water bills and help customers better manage their financial resources, according to the rate order.
The utility needs more revenue to finance replacing water mains and water meters, according to the rate application filed in December. Replacing water mains along Wisconsin 59 (N. Mechanic, Vine and parts of Main streets) is nearing completion and Gill expected laterals to individual addresses would be finished by this week.
Another capital project, replacing 444 aging water meters with new automated ones, will begin this fall. The change-out will save meter reading costs, provide better notice of water leaks and comply with federal lead standards but will cost an estimated $101,000.