PSC approves Shorewood rate change to fund grants for private lead service-line replacements

The Public Service Commission voted to allow the Village of Shorewood Water Utility to recover the grant portion of a financial assistance program (FAP) that helps property owners replace private-side lead service lines. The action, taken in Docket 5440-WR-113, follows a multi-point decision by commissioners focused only on the FAP implementation and related accounting and charge-development issues.

Chair Strand, opening the discussion, framed the decisions as a public-health response: “There is no safe level of lead exposure,” he said, and emphasized the commission’s goal of removing lead-containing infrastructure as quickly as practicable. Commissioners agreed the case raises novel issues about how utilities may use rate dollars to fund private-side replacements under 2017 Wisconsin Act 137 and Wis. Stat. § 196.372.

Shorewood requested authority to recover about $353,708 in grant funding to support private-side replacements; the utility indicated the loan portion would be provided through a revolving, interest-free loan program intended to be self-supporting and not funded through rates. The commission approved recovery only for the grant portion, which the applicant specified would cover 50% of a private-side replacement’s cost.

On administrative costs, commissioners approved directing staff to treat approximately $30,000 in program-administration costs as a system-wide general service cost allocated to all ratepayers rather than allocating those administrative costs by customer class. Chair Strand and other commissioners said class-based allocation could trigger separate rate-case proceedings and add undue administrative burden for a relatively small administrative sum.

The commission also approved the accounting approach Shorewood proposed for tracking FAP activities. Staff had recommended an escrow-style tracking method; Shorewood’s alternative preserves customer-class traceability while allowing commission staff to defer net excesses or deficiencies between collections and grant disbursements. Commissioners supported the agreed approach as workable for both the utility and staff.

Because of uncertainty about project timing, construction costs and the availability of external funding (for example, the Department of Natural Resources' Safe Drinking Water Loan Program), commissioners directed Shorewood to file a subsequent rate case within two years of the final decision. The commission also encouraged the utility and staff to develop methods to monitor and adjust the FAP charge more frequently than the cadence of a conventional rate case if practicable.

Finally, the commission delegated remaining rate-case issues outside the five FAP decisions to the administrator of the Division of Water Utility Regulation and Analysis, with the caveat that the administrator may elevate issues back to the full commission if warranted.

Commissioner Richard Nieto moved the approval—“I move we approve the village of Shorewood Water Utilities request to recover the cost to implement its financial assistance program consistent with our discussion.”—and the motion was seconded and approved by a voice vote. The meeting adjourned with the next open meeting scheduled for March 5, 2026, at 10:30 a.m.

What the decision does not do: the commission did not resolve the full Shorewood rate case today, did not authorize rate recovery for loan principal (the applicant indicated loans will be self-supporting), and left remaining contested rate-case elements to the division administrator or a future commission action. Specific dollar amounts for future projects, the pace of replacements and the ultimate per-property costs remain subject to monitoring and future review.