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Monticello applies for hike in water rates
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MADISON - The Monticello Water Utility is seeking a 30-percent rate increase, its first in 14 years, in order to keep up with inflation, according to a rate application filed this week with the Wisconsin Public Service Commission.

If approved as submitted, an average residential household currently paying $16.56 monthly in volume charges for 6,000 gallons of water would pay $21.48, or $4.92 more, under the requested rates.

The $7 monthly meter charge and the $4.05 Public Fire Protection charge collected on water bills also can be adjusted by the PSC during the pending rate case.

The utility has not raised rates since March 2001 but increasing costs due to inflation, relatively stable revenues and a new well house project have prompted the rate request, said Village Clerk DaNean Naeger.

"The new well house ... on the corner of East Coates and North Main Street ... has reduced our funds (reserves)," Naeger said.

The utility funded the $270,000-plus project from existing funds which now need replenishing, she said. Construction of the new well house is about completed and replaces one built in the 1920, "which is very corroded," said Naeger.

Without a rate increase the utility projects a $19,320 net operating income for 2016, after estimated revenues of $252,591 and total expenses of $233,271.

The new rates are estimated to increase revenue by $74,277 and earn the utility a 5.31 percent return on its infrastructure investment, according to the application prepared by James Frechette, a Mukwonago-based accountant.

Revenues have increased in recent years from $238,451 in 2011 to next year's $252,591. Meanwhile, operating expenses have risen from $93,848 in 2011 and are projected to reach $122,200 next year.

Insurance costs, which averaged $3,500 annually in 2013 and 2014, were not allocated in 2012.

Utility employees have begun taking family health insurance coverage, which was not previously available, according to the application.

Adding depreciation cost and taxes brings total expenses to an estimated $233,271 next year, according to the rate application.

Asked how she thought utility customers would respond to the prospects of a 30-percent increase, Naeger predicted it wouldn't be positive.

"It would probably be negative. Who likes increases? No one does," she said.

Maybe customers should get used to more frequent but smaller increases in the future as the utility intends to file rate cases every five years, according to the rate application. The cost to prepare the application and the PSC to review it costs an estimated $6,000.

PSC staff will review the pending application, and then make a revenue recommendation the utility can contest or adopt at public hearing to be held simultaneously in Madison and Monticello before the PSC authorizes new rates likely by the end of the year.