Waukesha Water Utility to Ask for Rate Increase

The Waukesha Water Commission voted unanimously to submit a rate increase case to the Public Service Commission as it financially prepares to develop a new water supply.

The rate increase request is for a 25 percent increase, according to discussion during Monday night’s meeting. It is the first of several increases that are expected to come as the city is under a June 2018 deadline to reduce radium levels from its water supply.

The PSC's review of the water rate increase may take up to nine months before approval, according to a memo from Donna Scholl, a CPA with the water utility, to its general manager. The approval for a rate increase may not come until August 2012.

"This is the first step in the process," Waukesh Water Utility General Manager Dan Duchniak said in an e-mail to Patch. "(It) does not mean there will be any rate increase, just that we can go through the evaluation process set up by PSC."

The water utility needs to raise the rates in order to demonstrate to lenders that the water utility will be able to pay off the money it will borrow during the upcoming years to fund projects to meet the Environmental Protection Agency’s mandated radium levels, according to the discussion at the meeting.

The Waukesha Common Council agreed 1-1/2 years ago to apply for Great Lakes water as its primary option to reduce the radium levels. The city needs approvals first from the DNR and the Wisconsin governor. Then the application advances to all the Great Lakes states, which have to also approve the application.

“It is the timing of it,” said Commission President Dan Warren.

Mayor Jeff Scrima, who is on the commission and has opposed the city’s application citing fears of Milwaukee, was not present at the meeting.

The construction costs for a pipeline to and from Milwaukee are estimated at $164 million, at $261 million for Oak Creek and $312 million for Racine. However, those figures are estimates, include a 25 percent contingency and are dependent on negotiations.

Even if the city does not obtain Great Lakes water, it still needs to raise the rates and water bills are expected to double under any scenario to meet the EPA’s mandate.

Meanwhile, the water utility is continuing its discussions with the DNR as the application has not yet received approval from Wisconsin authorities to advance to other states. It is also in negotiations with Oak Creek and Racine to purchase the water and the utility is finalizing a formal report to send to Milwaukee as it has not yet started negotiations with Milwaukee.

The water utility staff also hope to meet still in 2011 with staff from the Army Corps. of Engineers based in Detroit as the city plans to seek federal grant funding to assist with the project.

When the Common Council first approved submitting the application, an 18-month buffer was put into the application to allow for any snags. Because of delays, that buffer has been cut down, allowing for no more significant delays as construction needs to be completed by June 2018.

“By the end of next year, we will need a decision,” said Duchniak during the meeting.

The DNR does not expect to have the technical review and environmental impact statement finished before December, according to its website. A second round of public comment on the application will occur after the documents are drafted.