City to seek water rate hike

by Emmitt B. Feldner of The Review staff

PLYMOUTH – A large water rate increase could be coming down the pipe for Plymouth Utilities customers.

The City Council Tuesday authorized the utilities to file a rate case with the state Public Service Commission asking for a 39 percent increase in water rates to $33.18.

Plymouth Utilities Finance Manager Howard Bunkert told the council that, at the current rate – which was set in 2006 – the utility is getting a rate of return from the water utility of less than 1 percent.

The PSC allows water utilities up to 5.5 percent rate of return, he added.

The requested increase, if approved, would add a little more than $9 a month to the average water bill, according to Bunkert.

Bunkert said the falling rate of return was the result of several major water utility infrastructure projects over the past several years.

Those included water main extensions for the Glacier Transit and Storage building on County PP and the Sargento office expansion as well as the water utility’s share of the cost of the new Plymouth Utilities operations center, City Administrator Brian Yerges explained.

“The water utility has taken on a significant number of projects,” Yerges summarized, adding that more are in the near future, including a new well and water reservoir.

The upcoming projects prompted the city to seek a rate increase now rather than next year or further down the road, Yerges added. He said an increase now and another one after a few more years would be easier on consumers than a larger increase next year.

He presented information showing that the PSC approved nearly two dozen water rate increases ranging from 3 percent to 74 percent in the last quarter of 2011.

He also pointed out that Sheboygan, Sheboygan Falls, New Holstein, Fond du Lac and West Bend had all been granted water rate increases in the past three years.

But Alderperson Jackie Jarvis responded that Plymouth’s proposed increase and new rate would be “in the high end of the range.

“I know the council voted for several economic development projects to aid business, but back then we knew there would be increases in water rates,” as a result, Jarvis commented. “That’s one reason why I chose in some of those cases not to vote for them.”

While acknowledging that it has been six years since the city’s rate increased, Jarvis asked if Plymouth Utilities could use some of its reserve funds to cover the water utility’s shortfall and “flatten out the increases.”

Bunkert noted that the PSC would have to approve the city’s request and could change the numbers if they desire.

“In 2006 they changed my 28 percent increase (request) to 24 percent for residential customers and 30 percent for industrial customers,” Bunkert said.

“All we’re doing now is filing the case. There will be questions back and forth with the PSC,” he continued. Bunkert said Jarvis’ proposal could be discussed with the PSC as part of the rate case review.

The council voted 7-0 to make the application, with Alderperson Jim Sedlacek absent.

Jamin Friedl of Baker Tilly Virchow Krause presented his firm’s annual audit of Plymouth Utilities to the council.

“Overall, it was another successful year for the utilities,” Friedl summarized.

He noted that the rate of return for the electric utility is low, as well as for the water utility, but added that Plymouth Utilities has a very strong cash flow position.

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