Superior council authorizes $150,000 contract to study acquisition of Superior Water, Light and Power

The Superior Common Council on Sept. 16 approved a contract of up to $150,000 with Erphytis Financial Consultants Incorporated to study the potential acquisition of utilities operated by Superior Water, Light, and Power. The council approved the contract by roll call, 9-1.

The feasibility study will review whether the city should pursue acquisition of the private company’s water, electric and natural gas operations, examine likely legal processes and costs, and produce revenue and capital-liability forecasts for a multi-year horizon. The motion was moved by Councilor Levene and seconded by Councilor Ludwig.

Why it mattered: councilors said the study is the first formal step toward a possible purchase that could substantially change who controls utility rates and infrastructure in the city. Councilor Fennessy warned the study could “open the door to a purchase that could saddle our city with debt, massive debt,” and referenced preliminary debt estimates discussed during the meeting that ranged from about $20 million to $150 million. Councilor Moffett said $150,000 is a modest cost to determine whether acquisition could ultimately lower rates or produce savings for residents.

Discussion and scope: Councilors asked the consultant to describe the acquisition process, including potential legal challenges. Councilor Johnson asked whether the study would include scenarios for capital improvements and whether existing revenues would cover future obligations; councilors explained the consultant would be asked to project near-term capital liabilities and to compare them with existing rate structures. Councilors also discussed whether to study only the water utility or all three utilities together; supporters said shared assets and administrative costs make a combined study more informative.

Legal process: councilors noted two possible processes for acquisition and said the study should identify which process would apply and likely legal hurdles, including the possibility of a contested-case hearing before the Public Service Commission. The council asked the consultant to outline probable timelines and costs associated with such proceedings.

Financing and public approval: proponents said acquisition could be financed through revenue bonds tied to utility income rather than property taxes, and that bonding could be spread over decades. Councilor Herrick said any purchase would likely proceed to referendum, giving residents a final vote.

Vote: by roll call, Councilor Johnson — yes; Councilor Grama — yes; Councilor Ladin — yes; Councilor Anderson — yes; Councilor Moffett — yes; Councilor Sweeney — yes; Councilor Fennessy — no; Councilor Elm — yes; Councilor Ludwig — yes; Councilor Herrick — yes. The motion carried 9-1.

Next steps: the contract award sends the consulting engagement forward; the consultant will return findings the council requested, including legal-process options, comparative city benchmarks and multi-year revenue and capital projections. The council did not adopt any purchase decision on Sept. 16; it authorized only the study.