MADISON - After losing money for the past two years, Brodhead Water & Light Commission is seeking new electric rates that would return the utility to profitability, according to an application filed Thursday, Jan. 19 with the Wisconsin Public Service Commission.
The utility requested rates that would boost revenue by 5.6 percent. Its last rate increase was for 2.9 percent in 2005.
A typical residential customer would pay $6.03 more per month based on average usage of 751 kilowatt hours, boosting the monthly bill from $86.09 to $92.12, a 7-percent increase, according to Jeff Peterson, utility superintendent.
BW&L reported a net operating income deficit of $46,472 in 2010, $68,270 in 2011 and would lose $65,708 this year under current rates. If the PSC approves the request as submitted, the utility would increase revenue by $193,494 and finish the year with a $127,786 net operating income.
"We should have requested an increase a couple of years ago, but the commission felt that it should be put off for awhile because of the tough economic times ... Now it's time," Peterson said Monday in a phone interview.
The Water & Light Commission approved the rate application in a 2-0 vote on Tuesday, Jan. 17.
The utility's operating deficits have resulted in a negative 1.99 percent rate of return on its infrastructure investment in 2010 which would increase to a negative 3.09 percent under current rates this year. The utility is seeking rates that would get it a 6-percent rate of return, an amount the PSC has authorized recently for municipally-owned utilities.
Annual sales of electricity slumped from $3.43 million in 2008 to $2.98 million in 2009 and rebounded to an estimated $3.45 million last year. The requested rates would increase operating income to $3.68 million this year.
Due largely to the increased cost to purchase power in the past few years, operating expenses have climbed from $2.88 million in 2010 to an estimated $3.18 million in 2011. Adding depreciation and tax equivalent payments boosted expenses to $3.24 million in 2010 and an estimated $3.55 million this year.
The utility spent $2.43 million in 2010 to purchase power and will expect to spend $2.72 million this year.
Employee pension and benefits expenses were $205,347 in 2008, dipped to $179,996 in 2009 and are expected to be $206,128 this year, according to the application. Administrative and general salary expense has increased from $41,635 in 2008 to $47,067, this year.
The number of full-time employees has remained at seven since 2009.
The utility moved into a new building in 2009 which resulted in a more than doubling of general plant maintenance expense of $34,067 in 2009; that expense has returned to $17,004 last year and is an estimated $17,514 this year.
Peterson said the utility, like the economy, has been struggling during in the past few years and needs more revenue in order to pay its bills and debts.
"Two major customers closed plants, one plant re-opened ... but it's been difficult for everyone," he said.
The utility is seeking permission to expand its time-of-day rates to residential customers; industrial and commercial class customers now enjoy the rate break. Lower rates would be in effect during off-peak hours between 8 p.m. to 8 a.m.
"The new rates would be a little higher during peak times and less during off-peak," said Peterson.
Before the PSC acts on the rate application, PSC staff will review it and make a revenue recommendation that the BW&L can accept or contest at a rate hearing that would be held in Brodhead and Madison simultaneously.
Depending on how busy the PSC is this spring, Peterson said he expects new rates could be in effect within three to five months.
The utility requested rates that would boost revenue by 5.6 percent. Its last rate increase was for 2.9 percent in 2005.
A typical residential customer would pay $6.03 more per month based on average usage of 751 kilowatt hours, boosting the monthly bill from $86.09 to $92.12, a 7-percent increase, according to Jeff Peterson, utility superintendent.
BW&L reported a net operating income deficit of $46,472 in 2010, $68,270 in 2011 and would lose $65,708 this year under current rates. If the PSC approves the request as submitted, the utility would increase revenue by $193,494 and finish the year with a $127,786 net operating income.
"We should have requested an increase a couple of years ago, but the commission felt that it should be put off for awhile because of the tough economic times ... Now it's time," Peterson said Monday in a phone interview.
The Water & Light Commission approved the rate application in a 2-0 vote on Tuesday, Jan. 17.
The utility's operating deficits have resulted in a negative 1.99 percent rate of return on its infrastructure investment in 2010 which would increase to a negative 3.09 percent under current rates this year. The utility is seeking rates that would get it a 6-percent rate of return, an amount the PSC has authorized recently for municipally-owned utilities.
Annual sales of electricity slumped from $3.43 million in 2008 to $2.98 million in 2009 and rebounded to an estimated $3.45 million last year. The requested rates would increase operating income to $3.68 million this year.
Due largely to the increased cost to purchase power in the past few years, operating expenses have climbed from $2.88 million in 2010 to an estimated $3.18 million in 2011. Adding depreciation and tax equivalent payments boosted expenses to $3.24 million in 2010 and an estimated $3.55 million this year.
The utility spent $2.43 million in 2010 to purchase power and will expect to spend $2.72 million this year.
Employee pension and benefits expenses were $205,347 in 2008, dipped to $179,996 in 2009 and are expected to be $206,128 this year, according to the application. Administrative and general salary expense has increased from $41,635 in 2008 to $47,067, this year.
The number of full-time employees has remained at seven since 2009.
The utility moved into a new building in 2009 which resulted in a more than doubling of general plant maintenance expense of $34,067 in 2009; that expense has returned to $17,004 last year and is an estimated $17,514 this year.
Peterson said the utility, like the economy, has been struggling during in the past few years and needs more revenue in order to pay its bills and debts.
"Two major customers closed plants, one plant re-opened ... but it's been difficult for everyone," he said.
The utility is seeking permission to expand its time-of-day rates to residential customers; industrial and commercial class customers now enjoy the rate break. Lower rates would be in effect during off-peak hours between 8 p.m. to 8 a.m.
"The new rates would be a little higher during peak times and less during off-peak," said Peterson.
Before the PSC acts on the rate application, PSC staff will review it and make a revenue recommendation that the BW&L can accept or contest at a rate hearing that would be held in Brodhead and Madison simultaneously.
Depending on how busy the PSC is this spring, Peterson said he expects new rates could be in effect within three to five months.