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Regulatory Update: Stanley Central Water Treatment Plant Rate Case

Strategic Insights

— 1 min read

The Public Service Commission of Wisconsin has issued a regulatory update related to the Stanley Central Water Treatment Plant rate case. In response to a supplemental question, the applicant stated that a public hearing would be scheduled as part of the rate case, contingent on the proposed construction. However, the rate case cannot be processed until after the construction has begun. As a result, the Commission staff recommends that the applicant meet with Ace Ethanol and Stanley Correctional Institute to discuss the 48% rate increase and its impact on monthly water bills. The applicant has agreed to meet with these stakeholders and upload meeting minutes to the docket on ERF within two weeks.

Key Takeaways:

  • The applicant's annual revenue requirement is comprised of approximately 85% fixed costs, which must be generated from water sales regardless of the amount of water sold.
  • If Ace Ethanol or Stanley Correctional Institute were to dramatically reduce their water purchases and rely on private wells, the applicant would need to recover lost revenue from remaining water customers, resulting in further rate increases.
  • The City of Stanley has made efforts to ensure that Ace Ethanol and Stanley Correctional Institute continue to purchase the same quantities of water as in previous years.
  • There are no agreements in place between the applicant and Ace Ethanol and Stanley Correctional Institute to ensure consistent water purchases.
  • The City of Stanley has municipal ordinances related to compulsory connection to the city sewer and water system and private well abandonment.
  • The rate impact for the proposed project is estimated at 48%, increasing the average residential water bill from $47 to approximately $70 per month.

Statistics:

  • 85% of the applicant's annual revenue requirement is comprised of fixed costs.
  • 48% rate increase for the proposed project.
  • Average residential water bill increased from $47 to approximately $70 per month.
  • Ace Ethanol represents approximately 50% of the total annual water sales by volume.
  • Stanley Correctional Institute represents approximately 30% of the total water sales by volume.

Sources:

  • Public Service Commission of Wisconsin, Re: Stanley Central Water Treatment Plant 5670-CW-105 Data Request 2 PSCW-SPLK-1.
  • PSCW-SPK-2.
  • City of Stanley Municipal Code: 8-1-7 Compulsory Connection To City Sewer And Water System and 9-3-2 Private Well Abandonment; Well Operation Permit.

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