Wausau Water Utility posts higher 2024 net income after state loan forgiveness, PSC filing shows

Finance Director Groth told the Wausau Waterworks Commission on July 8 that the utility reported higher 2024 net income in its annual Public Service Commission filing, driven by a full year of final water rates and $6.5 million in state principal forgiveness tied to the GAC project.

The PSC filing shows operating revenue rose to roughly $12 million in 2024 and net income increased to about $5.1 million, Groth said. He told commissioners the $6.5 million principal forgiveness was recorded as miscellaneous nonoperating revenue because the loan for the GAC (granular activated carbon) project included a forgiveness component from the state.

That principal forgiveness and the full-year effect of new water rates also contributed to increases in utility plant assets, Groth said, noting about $15 million in plant additions in 2024 largely from the GAC project and meter replacement work. He also said the utility’s cash position improved from a cash deficit at the end of 2023 to roughly $1.4 million at the end of 2024.

The commission heard an explanation of the utility’s long-term debt accounting: a short-term note taken during 2024 increased reported short-term borrowings, but Groth said the city draws state financing over time for the GAC project and that long-term debt totals will increase as draws continue in 2025.

Mayor Doug Denny emphasized an operational metric discussed in the PSC filing: net water loss. “Last year, we had a total water loss as a percentage of net water supply of 17%. We did improve; we’re down to 13%,” Denny said, adding that the drop is likely attributable in part to recent meter replacements and ongoing leak detection efforts.

Commissioners asked whether the PSC issues any opinion on a utility’s overall financial health; Groth said the PSC compiles the financials and does not issue a qualitative opinion. The commission also discussed potential outside reviews such as Moody’s, which can produce credit ratings independently.

The utility’s rate-of-return calculation, used for future rate-change considerations under PSC rules, came in at about 7.23% for 2024, Groth said, noting that figure would not qualify the utility for a rate increase this year under current thresholds.

Commissioners and staff discussed next steps for continued construction draws on the GAC project and how the 2024 principal forgiveness and better state interest rates have affected debt servicing and sinking-fund balances. Groth recommended continuing to monitor draws as the project completes final tasks.

Ending: The commission placed the PSC report on file; commissioners had no formal vote to change the filing because it was already submitted to the PSC. Staff said the filing is publicly available on the PSC website and the commission will post a link from the utility’s site.