Kevin Murphy, Leader Correspondent
Shawano Water and Sewer Utility residential customers will soon pay 13 percent, or about $2.85 per month, more for water, according to an order issued Monday by the Wisconsin Public Service Commission.
Residential customers currently paying $22 monthly for 3,750 gallons of water will pay $24.85 for the same amount of water when the new rates take effect Saturday, according to Nancy Schauer, financial manager for Shawano utilities.
The $24.85 includes the $8.50 monthly meter charge applicable to most residential customers and the public fire protection charge, which reimburses the utility for hydrant maintenance and other firefighting costs the utility incurs.
The utility sought an overall 22 percent rate increase in the application it filed in July. However, that was based on the 6.5 percent rate of return on the value of the utility’s infrastructure the PSC granted in 2007, the last time the city increased water rates, Schauer said.
Instead, PSC staff trimmed the request to the 5.25 percent rate of return benchmark it has been authorizing more recently, which cut into the utility’s requested revenue.
Water utility income increased from $1.471 million in 2010 to an estimated $1.634 million last year, according to PSC analysis. Operating expenses also grew from $1.066 million in 2010 to an estimated $1.12 million last year.
That caused the utility’s net operating income to decrease from $416,965 in 2010 to an estimated $346,713 last year, which, would have earned a 3.57 percent rate of return, according to the PSC.
The new rates boost annual income by $163,123, to $1.634 million. After total expenses of $1.124 million, which includes depreciation and payments in lieu of taxes, the utility has a projected $509,836 net operating income this year, according to the PSC.
Schauer said she was “very happy” with the authorized rate increase and referred further questions to Eddie Sheppard, public works director.
Efforts to contact Sheppard on Tuesday were unsuccessful.