MADISON - The Wisconsin Public Service Commission Monday issued a letter of reprimand and a warning to the New Glarus Light and Waterworks for not getting approval before starting to change out old water meters for new ones.
The reprimand is a mild sanction compared to the maximum punishment possible by the PSC, in which the commission would prohibit a utility from increasing rates to recover the cost of such projects. Instead, Water Division Administrator Steven Knudson wrote in a Feb. 19 letter that "given the facts surrounding this case," the utility can recover the cost of the meter project.
Earlier this month, the PSC signaled it would not impose a stiff punishment by authorizing a 25 percent increase in water rates for the village which went into effect around Jan. 28.
In January, the PSC ordered the utility halt further installation of automated meters. The group learned of the project in October while examining the utility's pending water rate request.
The PSC learned that the utility had begun replacing its conventional water meters in 2014 with automated meters. However, there was no order on file authorizing the project and its expense, Andy Galvin, a PSC assistant division administrator, said last month.
New Glarus officials said PSC staff had informed the village in 2014 that the meter replacement project was not subject to formal approval. Village Administrator Bryan Gadow said the municipality was told to move forward. In further discussions, village officials learned the PSC staff member who informed them the formal approval was not required was either no longer with the agency or had not worked in the Water Division. Galvin said the individual would not have known the rules.
The PSC puts the responsibility on utilities for knowing and following the rules and warned the utility that future violations could be referred to the office of Attorney General Brad Schimel for enforcement.
Other utilities have been confused about the need to get pre-construction approval after changes in state statutes in recent years. Some construction projects, which required PSC approval before 2014, did not require approval after statutes changed.
The PSC also told the City of Two Rivers in January to halt installing new water meters because it did not get pre-approval for the project. The investigation remained unresolved this week.
In 2014, statutes required public utilities seek pre-approval from the PSC for expenses that exceeded $271,000 or 25 percent of a utility's income for the prior year, whichever is less. Based on 25 percent of its 2014 income, New Glarus would have been required to seek PSC approval for projects that cost $108,330 or more, Galvin said.
When the PSC began investigating the matter last month, neither Galvin nor Gadow knew the cost New Glarus is incurring to replace its meters. Gadow said Thursday that the village has so far replaced about 150 meters at a cost of $50,000 and has about 680 meters yet to replace, which should cost roughly $250,000.
Gadow expected the PSC's reprimand.
"It's the standard letter the PSC sends to communities," Gadow said. "We've submitted our application for authority to construct the project and will continue once it's received."
Utilities across the state are replacing old meters because they contain lead and parts are difficult to locate. New automated meters can be read remotely saving the utility labor costs and can provide earlier detection of leaks, saving customers money.
However, even if the utility was only replacing a few dozen meters annually it would still be subject to the statutory requirement that is triggered by a project's total cost and not its annual cost, Galvin said.
The reprimand is a mild sanction compared to the maximum punishment possible by the PSC, in which the commission would prohibit a utility from increasing rates to recover the cost of such projects. Instead, Water Division Administrator Steven Knudson wrote in a Feb. 19 letter that "given the facts surrounding this case," the utility can recover the cost of the meter project.
Earlier this month, the PSC signaled it would not impose a stiff punishment by authorizing a 25 percent increase in water rates for the village which went into effect around Jan. 28.
In January, the PSC ordered the utility halt further installation of automated meters. The group learned of the project in October while examining the utility's pending water rate request.
The PSC learned that the utility had begun replacing its conventional water meters in 2014 with automated meters. However, there was no order on file authorizing the project and its expense, Andy Galvin, a PSC assistant division administrator, said last month.
New Glarus officials said PSC staff had informed the village in 2014 that the meter replacement project was not subject to formal approval. Village Administrator Bryan Gadow said the municipality was told to move forward. In further discussions, village officials learned the PSC staff member who informed them the formal approval was not required was either no longer with the agency or had not worked in the Water Division. Galvin said the individual would not have known the rules.
The PSC puts the responsibility on utilities for knowing and following the rules and warned the utility that future violations could be referred to the office of Attorney General Brad Schimel for enforcement.
Other utilities have been confused about the need to get pre-construction approval after changes in state statutes in recent years. Some construction projects, which required PSC approval before 2014, did not require approval after statutes changed.
The PSC also told the City of Two Rivers in January to halt installing new water meters because it did not get pre-approval for the project. The investigation remained unresolved this week.
In 2014, statutes required public utilities seek pre-approval from the PSC for expenses that exceeded $271,000 or 25 percent of a utility's income for the prior year, whichever is less. Based on 25 percent of its 2014 income, New Glarus would have been required to seek PSC approval for projects that cost $108,330 or more, Galvin said.
When the PSC began investigating the matter last month, neither Galvin nor Gadow knew the cost New Glarus is incurring to replace its meters. Gadow said Thursday that the village has so far replaced about 150 meters at a cost of $50,000 and has about 680 meters yet to replace, which should cost roughly $250,000.
Gadow expected the PSC's reprimand.
"It's the standard letter the PSC sends to communities," Gadow said. "We've submitted our application for authority to construct the project and will continue once it's received."
Utilities across the state are replacing old meters because they contain lead and parts are difficult to locate. New automated meters can be read remotely saving the utility labor costs and can provide earlier detection of leaks, saving customers money.
However, even if the utility was only replacing a few dozen meters annually it would still be subject to the statutory requirement that is triggered by a project's total cost and not its annual cost, Galvin said.