Village of Jackson board votes to file 16.38% water rate request with PSC

The Village of Jackson Village Board voted July 8 to authorize staff and consultant Ehlers to file a conventional rate application with the Wisconsin Public Service Commission requesting a 16.38% increase in water rates for the test year 2025.

The board’s motion to file the CRC (conventional rate case) application followed a presentation by Ariana Schmidt of Ehlers, who explained that the PSC is the regulatory body that ‘‘ultimately determine[s] what your rates are’’ and that the proposed increase responds to an estimated PSC-calculated revenue shortfall of about $252,000. Schmidt said the PSC applies a utility-basis method that includes depreciation and a benchmark earnings return (about 6.7%) when calculating allowable revenue. She said the conventional rate case prompts a detailed PSC audit of the utility’s financial records dating back through prior filings.

Schmidt outlined timing and customer impacts. Because of the PSC review schedule, she said implementation would likely occur about six months after filing and that the Village must file before July 31 for the application to use test-year 2025; filing after July 31 would make the application test-year 2026 and require reworking the submission. Using a sample residential customer who uses 12,000 gallons per quarter, the consultant showed the 16.38% increase would add about $15.39 per quarter (about $61.58 per year) on the water portion of the bill. Schmidt emphasized that the PSC will issue a cost-of-service study and final rate order that allocates the increase among customer classes and charges.

Board members and staff discussed outreach. Schmidt recommended the village begin public messaging early so residents are not surprised when formal public notice (required by PSC) appears months after filing; the consultant said public notice to customers is normally posted roughly four to five months after the application is filed and that PSC public hearings are currently held virtually. A board member noted that an April village newsletter had published a higher preliminary estimate near 29%, and asked that staff clarify the lower requested percentage in forthcoming communications.

Schmidt also reviewed the village’s cash-flow forecast: the 16.38% increase is intended to restore PSC-required coverage metrics (the village’s target all-in debt coverage ratio is $1.60 of revenue per $1.00 of debt service) and to provide a cushion for planned capital projects. The presentation included a projection that simplified, inflationary increases of 3% were built into later years (beginning in 2028) as placeholders, subject to change.

After discussion, the board moved and seconded a motion that the village and Ehlers file the CRC application for test year 2025 at the benchmark rate of return of 16.38%. The motion passed by voice vote; the meeting record shows ‘‘Aye’’ and ‘‘Motion carries’’ but does not list an individual roll-call tally in the transcript.

The record shows the board also discussed that the PSC does not consider cash reserves when setting rates — it evaluates the revenue stream — and staff and the consultant noted that some planned projects would be funded from a mix of debt proceeds and cash reserves. Schmidt said updated 2024 actuals, additional customers, and revised capital project cost estimates reduced the earlier forecast from roughly 20–29% down to the 16.38% figure now proposed.

The board asked staff to continue annual utility cash-flow updates as part of the village’s financial management plan. The application filing will trigger a PSC audit, a virtual public hearing, and a final PSC rate order that will specify implementation timing and the detailed tariff changes.