Cottage Grove reports higher online utility payments, lower costs and PSC rate update

Staff reported to the Cottage Grove Utility Commission on April 9 that 78% of utility customers use the new online portal to some extent and 71% make online payments, up from 49% under the previous payment service. The staff member said the village is seeing roughly $3,400 per month in convenience fees from online payments and about $1,700 per month related to mailed bills; overall, staff estimated the transition produced about a 32% cost savings compared with the prior service provider.

The staff member said the village implemented monthly billing in April 2024 when the village converted from quarterly billing and in response to an AMI (advanced metering) schedule set by the Public Service Commission. The vendor corrected an autopay labeling issue as of April 15 so bills will now indicate whether a customer is on autopay.

Staff discussed rate issues with the commission: Baker Tilly will present to the village board in May on the village's financial position, and the authorized rate of return for the water utility from the last rate study is 6.6%. The staff member said operations came in slightly below that authorized return because consumption was lower than estimated, but not by a large amount. Staff said it plans to present a utility operations and rate summary from Ellers by Aug. 13; at present staff does not expect a rate increase larger than about 3%.

Staff also reminded commissioners the village offers deferred payment agreements; customers who apply and keep current bills may pay down delinquent balances without immediate tax-roll consequences. No formal action was taken.