By Kevin Murphy
For the Times
MADISON — Electric rates for residential customers of the New Glarus Light & Water Works will increase by about $7 a month to $93.61, beginning later this month, according to an order issued this week by the Public Service Commission.
Bills reflecting the new rates will be mailed in April, Utility Clerk Beth Heller said.
Average residential customers using 629 kilowatt hours of power monthly will pay $7.61 or 8.63% more under the new rates, according to the PSC’s rate order.
Rates for other customer categories will increase by an average 16% or higher, according to the order.
Any individual customer’s bill may differ from the average increase but will be based on usage, category and other factors.
The 9.18 % overall increase was needed to keep pace with increasing costs of materials and labor and to finance construction of a $3.6 million electric substation, according to NGL&WW.
The last rate increase, a 9.36% bump, went into effect in May 2022.
In June 2024, the village’s electric rates were 18% lower than the average price of electricity in the state, according to the FindEnergy.com website.
How the new rates will affect that ranking hasn’t been calculated yet.
The PSC didn’t authorize rates that would yield all the revenue that the utility sought. Last June, the village requested an 11.86% increase, based on a 7% return on the value of its infrastructure. However, the PSC trimmed the utility’s rate of return to 6.1% which cut the expected increased in annual revenue by nearly $75,00 to $255,790.
Under the old rates, the utility would have had an estimated net income of $121,313 and a rate of return of 1.6%, based on projected revenue of $2.936 million and expenses estimated at $2.818 million.
The new rates are expected to boost annual revenue to $3.195 million, increase net income to $377,107 and yield a 6.1% rate of return, according to the rate order.
The utility sought new rates to keep pace with inflation and finance the $3.6 million cost of constructing substation located on Valley View Road, just north of the existing one.
The new substation went on line in December 2023 and replaced the transformer owned by Alliant Energy with one the village owns.
“That should save us some money, “ said Bill Kosmeder, utility director. The village switched wholesale supplier from privately-held Alliant to WPPI, a consortium of municipal electric utilities.
The cost of the new substation increased from $2.06 million to $3.65 million as the project was revised to accommodate Alliant and American Transmission Co. equipment. Alliant and ATC will reimburse the village at least some of the increased cost, according to a PSC order.
The new substation and new rates allow the utility to upgrade service in older area of the city from 4.16 kilovolts to 12.47 kV. Increasing capacity of the electrical distribution system should improve service and better accommodate future demand, Kosmeder said.
“We’re making improvements to keep squirrels out of problem areas, replacing old lines and poles are necessary...It’s an ongoing process,” he said.