MADISON — Monroe Municipal Water Utility customers overall will pay 16.7% more for water if the Public Service Commission approves the request the utility submitted July 31.
The PSC granted the city’s last comprehensive rate increase in March 2014. The commission authorized a 17 percent increase in rates for average residential customers, boosting the quarterly cost of approximately 11,220 gallons of water to $57.84, including the Public Fire Protection charge.
However, the city council has the final approval on any increase. It has cut PSC-authorized increases in the past and could so again, said Mike Kennison, water and wastewater utilities supervisor.
The PSC granted the city a 3% overall rate increase last year in a simplified rate request, but the PSC required the city to file a comprehensive rate case this year, he said.
Without the new rates, the water utility projects would be finishing 2019 with a net income of $94,462 after estimated revenues of $1.855 million and expenses of $1.76 million, according to the rate application.
The requested rates would boost annual revenue by $302,196 and earn the utility a 5.3% rate of return on the value of its infrastructure investment, according to the application.
Kennison said utility needs more revenue in order to fund infrastructure projects including refurbishing and repainting what is referred to as the hospital water tower so it can be put back into service.
“We’ll bring it up to code. It has not been painted in 24 years and it’s obviously time. There are some other things that don’t meet code which also will be done,” he said.
The renovation project is expected to cost about $800,000 and is being contracted at $160,000 a year for five years with Suez North America, whose parent company built the Suez Canal in Egypt 160 years ago, Kennison said.
The city’s two towers will be maintained by Suez thereafter for $44,499 a year.
“We’ll never have a major outlay again,” for tower maintenance,” he said. Suez has been maintaining the city’s wells on a similar basis, he said.
The tower renovation is scheduled for next spring.
Much of the city’s water distribution system is 75 years old or older and in need of replacement. Revenue is being sought to continue replacing water mains on a timely basis, typically in conjunction with when streets are reconstructed. However, a problem water main may determine if the street above it needs to be rebuilt, too.
Other water lines are only four inches in diameter which is considered undersized today. The Department of Natural Resources wants the city to replace the four-inch lines with larger ones and Kennison said additional revenue will help that process along.
“We’re going to try to work with the engineering department and what streets they’ll (reconstruct) we’ll check for four-inch mains. We’ll do whatever the city council and PSC allows us to recover in rates and we should be able to do a city block or two per year with the increase,” Kennison said.
PSC staff will review the rate application, recommend an amount of revenue it deems the utility needs for its long term financial viability and hold a public hearing simultaneously in Monroe and Madison before authorizing new rates.
That process is expected to take several months.