MADISON - After four 3 percent water rate increases since 2005, the New Glarus Light and Water Works is seeking a 25 percent, or a $5.70, increase in monthly water bills.
Average residential customers currently pay $22.83 monthly for 2,500 gallons of water, said Village Administrator Bryan Gadow. If the rate application is approved as submitted, residential owners would pay $28.53 monthly for the same amount of water.
Although the utility has received increases intended to keep pace with inflation, depreciation, expenses and maintenance projects have eroded net revenue over time, said Gadow.
The utility projects only a $26,679 net income this year after estimated revenue of $447,094 and total expenses of $420,415, according to the application filed Friday.
"That's a .87 percent rate of return," Gadow said on the utility's infrastructure investment.
The PSC benchmark rate of return this year has been 5 percent, and the utility is seeking a 4 percent rate of return.
The requested rates are projected to boost annual revenue by $109,284 and net income to $135,963, according to the application.
Depreciation expense and payments in lieu of property taxes have increased as fast or faster than the utility's cost to pump, treat and distribute water.
The cost to replace water mains in recent years is also driving the need for more revenue, said Gadow.
Main replacement costs for the utility has been about $343,000 in 2013, $432,000 in 2015 and $68,000 last year, he said. Financing has come from ongoing revenue and borrowing, said Gadow, but now the utility needs more revenue.
"We don't want to do it (raise rates) but we want to make sure we have a well-operating utility," he said.
Before new rates are set, PSC staff will review the request, recommend an amount of revenue it determines the utility needs to remain financially viable and hold a public hearing in New Glarus and Madison at a date yet to be set. The process usually takes several months.
Gadow said he expects to have new rates approved for implementation after the first of the year.
Asked how he thinks customers will react, Gadow said, " I'm sure there will be some questions as to why there's a rate increase now, so there will be some public education needed. Will listen to the feedback from the village."
The utility's last full rate case was in October 2001, Gadow said. It received 3 percent increases from the PSC in 2005, 2006, 2009, 2011 and 2014.
Average residential customers currently pay $22.83 monthly for 2,500 gallons of water, said Village Administrator Bryan Gadow. If the rate application is approved as submitted, residential owners would pay $28.53 monthly for the same amount of water.
Although the utility has received increases intended to keep pace with inflation, depreciation, expenses and maintenance projects have eroded net revenue over time, said Gadow.
The utility projects only a $26,679 net income this year after estimated revenue of $447,094 and total expenses of $420,415, according to the application filed Friday.
"That's a .87 percent rate of return," Gadow said on the utility's infrastructure investment.
The PSC benchmark rate of return this year has been 5 percent, and the utility is seeking a 4 percent rate of return.
The requested rates are projected to boost annual revenue by $109,284 and net income to $135,963, according to the application.
Depreciation expense and payments in lieu of property taxes have increased as fast or faster than the utility's cost to pump, treat and distribute water.
The cost to replace water mains in recent years is also driving the need for more revenue, said Gadow.
Main replacement costs for the utility has been about $343,000 in 2013, $432,000 in 2015 and $68,000 last year, he said. Financing has come from ongoing revenue and borrowing, said Gadow, but now the utility needs more revenue.
"We don't want to do it (raise rates) but we want to make sure we have a well-operating utility," he said.
Before new rates are set, PSC staff will review the request, recommend an amount of revenue it determines the utility needs to remain financially viable and hold a public hearing in New Glarus and Madison at a date yet to be set. The process usually takes several months.
Gadow said he expects to have new rates approved for implementation after the first of the year.
Asked how he thinks customers will react, Gadow said, " I'm sure there will be some questions as to why there's a rate increase now, so there will be some public education needed. Will listen to the feedback from the village."
The utility's last full rate case was in October 2001, Gadow said. It received 3 percent increases from the PSC in 2005, 2006, 2009, 2011 and 2014.