Shawano Municipal Utilities customers will start paying more for electricity next month, though how much more depends on what class of customers they are.
The Public Service Commission on Tuesday issued an order granting SMU a rate increase sufficient to provide the utility with a 6 percent rate of return.
The increase will start to show up on September bills covering usage for the month of August.
Residential customers and the largest industrial class will fare best under the new prices.
Bills for the residential class will go up 0.9 percent, while the largest industrial customers will pay 0.93 percent more.
The remaining commercial classes will see larger increases ranging from about 2 to 6.5 percent.
SMU was looking for a rate of return that would generate an additional $610,000 a year. The PSC determines how those additional costs are allocated among SMU customers.
The Shawano Paper Mill and Aarrowcast are the only two customers in the CP-4 category of SMU’s largest industrial companies.
Both companies filed objections after an initial PSC rate analysis that would have placed most of the burden of a rate increase on them.
Shawano City Administrator and SMU General Manager Brian Knapp said the net effect on an average residential customer will be less than $1 per month. Average general service (small commercial) customer will pay an increase of a little more than $2 per month.
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.
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.