In a recent government meeting, officials discussed proposed increases to water and electric utility rates, marking the first adjustments since 2016. The discussions highlighted a comprehensive three-step rate application process aimed at determining the necessary revenue requirements, conducting a cost of service study, and designing the new rates.

The proposed electric utility revenue requirement is approximately $17.2 million, reflecting a 6.01% increase over current rates. For the water utility, the proposed revenue requirement stands at $2.88 million, representing a significant 51.43% increase. These adjustments are driven by the need to meet a benchmark rate of return set by the Public Service Commission, which currently stands at 6.2% for electric utilities and 4.5% for water utilities.

Key components of the rate-setting process include the principle that \"growth pays for itself,\" which involves excluding developer-contributed assets from the utility's net investment rate base. This approach aims to ensure that new developments do not disproportionately burden existing ratepayers. Additionally, tax increment financing and impact fees are utilized to support infrastructure costs associated with growth.

The cost of service study revealed that different customer categories will experience varying rate increases. For instance, general service time-of-day customers in the electric utility sector will see a 9.3% increase, while fire protection services in the water utility will face an 83.5% increase. The adjustments are designed not only to increase rates but also to align them with the actual costs of serving each customer category.

Officials emphasized the importance of maintaining a balance between fixed and usage-based costs in the rate design, with a slight decrease in usage-based revenues for both utilities. This strategy aims to promote conservation while ensuring the financial sustainability of the utilities.

For average residential customers, the proposed changes would result in an estimated monthly increase of $7 to $9 for electric services and $6 for water services, translating to a 9% and 34% increase, respectively. Despite these increases, the utility rates would remain competitive compared to other providers in the region, with the local electric utility still positioned in the lower tier of rates among similar Wisconsin utilities.

The proposed rate adjustments will be submitted for regulatory review, where the Public Service Commission will ensure that the changes are equitable and protect the interests of ratepayers.