MADISON – Over the objection of several customers, monthly water bills for Columbus Water & Light Department average residential customers will increase by $7.19 or 19 percent, according to an order issued last week by the Public Service Commission.
Customers in the average residential category currently paying $37.80 monthly for approximately 4,000 gallons of water, will pay $44.99 for the same volume when the new rates take effect July 15, said Michelle Kaltenberg, water & light department co-superintendent.
Rates for large residential, multi-family, commercial, industrial, and public entity customer classes will increase by 19 to 36 percent depending on customer class and usage, according to the PSC order.
The new rates are estimated to boost annual revenue by $269,344 to $1.615 million earning a net income of $411,320 and a 5 percent rate of return, according to the order. The utility requested the 5 percent rate of return, which is below the 5.5 percent rate of return the PSC has been authorizing recently.
Seven customers wrote the PSC in opposition to the rate increase requested in November, including Bobi Beth Kallenbach. She stated her monthly water bill is $200 and the new rates would push it to nearly $240, a “hardship” for a family of nine.
Jack Sanderson, former head of the Water & Light Commission, wrote that a temporary dip in the utility’s rate of return on its infrastructure investment is no reason to seek higher rates now. Replacing water mains when state highway 16/60 was rebuilt in 2017 cost millions of dollars while revenue remained about the same. While that lowered the utility’s rate of return, the city had cash reserves in preparation for the project. Also, the utility has a healthy debt ratio and the water system has been adequately maintained over the years, which Sanderson cited in concluding he expects the rate of return to bounce back over time, he wrote.
“Columbus is already in the upper tier of water rates for Class C utilities. I believe we are in the top 20 out of 167 Class C water utilities when arrayed according to the first 6,000 gallons. If this rate increase is approved, we will most likely be the most expensive Class C water utility in the state. We don`t need to be there,” Sanderson wrote the PSC earlier this month.
The PSC order stated that the new rates put Columbus’ water bills above average for similar-sized utilities.
Denise Grossman echoed Sanderson’s remarks about water already being too expensive in the city.
“Columbus already has a problem with keeping people and businesses in the city and if we continue to raise prices it will be to the detriment of the city and tax base...” she wrote.
The PSC noted the customer comments but said the revenue that the new rates will produce is necessary for the utility’s long-term financial stability and is not excessive.
In recent years, the utility’s net income has fallen from $295,154 in 2016 to $131,746 in 2018, putting it below the 5 percent rate of return authorized in 2012, the utility’s last comprehensive rate case.
Without the new rates, the PSC staff projected the utility would have a net income of $141,976 this year after estimated revenue of $1,345,951 and expenses of $1,203,975 for a 1.73 percent rate of return on the $8.22 million net value of its infrastructure investment.