The Wisconsin Public Service Commission is recommending a water rate increase of just under 20 percent for the city of La Crosse utility, less than initially estimated, according to a report received Monday by the Board of Public Works.
“This rate-setting process addresses multiple objectives including cost recovery, affordability and resource sustainability. The PSC has now provided us with two rate design options that will provide a 19.58 percent overall increase,” said Tina Erickson, utilities accounting and customer support supervisor.
The board voted to move forward with a rate design structured so that residential buildings rate would go from $1.05 per unit to $1.11 per unit on the first 800 cubic feet of water. After that, it would go up to $1.59 per unit. A unit is 100 cubic feet of water, or about 748 gallons.
The board chose the rate design that had rising rates for residential use and declining for nonresidential rather than a uniform rate increase, which would have increased rates on residential properties to $1.56 per unit.
With the housing trends in the city and the tight market, city planner Jason Gilman said the city should do what it can to favor residential developments, especially those for families.
“I just think that all the pressure on residential right now, shifting tax burdens and things like that, I am more comfortable with ... rate design 1,” Gilman said.
La Crosse Mayor Tim Kabat said he wanted a rate design that encourages people to be mindful of their water usage.
“If you’re using a lot more water, you’re trying to encourage conservation and protection of our precious water, we really should be getting out of the mode of the more you use, the cheaper it gets, because that does not encourage people to conserve,” Kabat said.
However, at the same time as the PSC is looking toward sustainability, it’s also concerned about industrial consumers, Erickson said.
“I essentially have to find a balance between sustainability and allowing people like City Brewery and hospitals and Trane Company, those that use a lot of water for their manufacturing, to continue operating,” Erickson said.
The proposed rate for nonresidential users is $1.14 per unit for the first 5,000 cubic feet, which would decrease with the more water used. With that kind of volume, those companies already have an incentive to conserve, said utilities manager Bernard Lenz.
“Whether it’s 11 cents more or not, the total dollar amount is a lot bigger just because of the volume that they’re using,” Lenz said.
After the board’s vote, the PSC will determine a final recommendation and there will be a public hearing to let the community weigh in. The PSC will then issue a final order to the city and the La Crosse Common Council will vote on the increase.
Erickson said the goal is to put the new rates into effect July 1.
The last time the city did a full conventional rate case was in 2010, and the 30 percent increase went into effect in 2011. There was a simplified rate case in 2015, which allowed a cost-of-living increase.
“Even with the rate increase, we’re still one of the cheapest in the state,” council member Gary Padesky said.
“We really should be getting out of the mode of the more you use, the cheaper it gets, because that does not encourage people to conserve.” Mayor Tim Kabat