Just seven months after hiking rates more than 30%, Madison’s water utility is seeking another increase.
The municipal water utility asked state regulators Monday for an 8% increase, which the utility said would raise the average residential bill by about $2.20 a month next year.
Water utility spokeswoman Amy Barrilleaux said capital expenses and debt payments related to ongoing water main replacement represent the primary cost driver for the proposed increase.
If approved by regulators, the proposed increase would generate about $3.5 million in additional revenue.
Barrilleaux said the utility faces nearly $17 million in capital financing costs this year for projects including a new well and the Blackhawk water tower on the Far West Side, plus reconstruction of a well, water tower and the Paterson Street Operations Center. This year’s projects include about $7 million worth of new water mains.
The utility is about 15 years and 100 miles into a largely debt-funded project to replace about 400 miles of aging water mains. Water main replacement costs about $1.5 million per mile.
Coupled with declining sales, those costs have left the utility with a roughly $6 million deficit.
It will be up to the Wisconsin Public Service Commission to decide whether — and how much — rates should increase.
The PSC in November approved a 30.6% revenue increase that was expected to add about $7 to the typical monthly bill while generating an additional $10.4 million in 2019 revenues.
The PSC also ordered the utility to submit a plan to improve its finances and to update the commission on its progress over the next two years before returning for a rate review.
“In our previous rate case ... they asked us to file again within a certain period of time,” Barrilleaux said. “That’s what we’re doing.”
According to data from the PSC, a Madison household using 6,000 gallons of water per month last year would have had a bill of about $18.56 — ranking 15th most expensive among the state’s 97 large utilities.
Water charges account for roughly a third of the typical Madison Municipal Services bill, which also includes charges for sewer, stormwater, forestry and landfill services.