A public hearing has been scheduled next month to consider Shawano Municipal Utilities’ request for an increase in electric rates.
The Wisconsin Public Service Commission will hold a teleconference at 9:30 a.m. May 8 from Madison with utility officials in the SMU conference room at 122 N. Sawyer St.
Residential customers would barely be impacted by the increase, City Administrator and SMU General Manager Brian Knapp said.
Instead, large commercial operations and industrial customers would bear the brunt of the rate hike, with their bills going up anywhere from 2 percent to 6.6 percent, depending on their size.
Aarrowcast, at 2900 E. Richmond St., in the city’s industrial park, has filed as an intervenor in the case, objecting to the rate increase.
SMU originally requested an increase that would allow for a 5.5 percent rate of return in net revenue, with hopes that a rate increase would be in place by the end of last year.
Delays in the approval process led PSC to suggest the utility request a 6.25 percent rate of return, which the SMU Commission voted to support.
PSC determines what rate increase would be needed and how it would be broken down among customers to reach that rate of return.
SMU last increased its rates in 2010 after being given approval for a 4 percent rate of return, but revenue has fallen short since then due to a decrease in industrial power use and higher labor costs.
The utility had a rate of return of only 1.07 percent for 2013, compared to 3.21 percent in 2012.
The rate of return for the first two months of this year was 0.13 percent.
The utility had a net income of $158,754 from February 2013 to February 2014. The net income for the previous 12 months was $371,475
Because of the economic conditions at the time, the SMU Commission had mixed feelings about its 2010 rate hike and initially debated asking for a 6 percent rate of return before settling on a request for 4 percent.
However, some commissioners felt it was inevitable the utility would have to come back and ask for more.