...FISCAL NOTE
The proposed resolution authorizes the General Manager of the Madison Water Utility to file for a conventional rate case with the Public Service Commission of Wisconsin for test year 2025; no fiscal impacts for FY 2024.
...TITLE
Authorizing the General Manager to file, on behalf of the Madison Water Utility, a conventional rate case with the WI Public Service Commission for the test year 2025.
...BODY
WHEREAS, the Madison Water Utility (the Utility) is a municipal public utility, with the Utility’s rates subject to the oversight and approval of the Public Service Commission of Wisconsin (PSCW); and
WHEREAS, the Utility's current rates are not adequate to support its long-term Capital Improvement Program (CIP), particularly the water main replacement program; and
WHEREAS, the Utility is committed to maintaining the PSCW recommended level of funding for the water main replacement program; and
WHEREAS, the Utility has an outstanding debt of $166M and a projected annual debt service payment of $18.9M for 2025, which is almost as much as the Utility’s current operations and maintenance expenditures and hence desires to limit further borrowing; and
WHEREAS, the PSCW will generally allow 1.3% depreciation expense on the original cost of existing water mains, which amounts to $2.0M per year; and the PSCW would also like the Utility to replace water mains up to 1% of the existing water mains per year at an estimated cost of $12.5M; and
WHEREAS, to reduce the gap, PSCW allowed the Utility to generate an additional $5M of depreciation in the 2022 rate case; and
WHEREAS, the Utility is seeking PSCW approval for expense depreciation of an additional $5M for a total of $10M in the 2025 rate case, which would be sufficient to replace water mains up to 0.8% of the existing water mains per years; and
WHEREAS this will preempt the Utility from incurring more debt and strengthen its short and long-term financial position; and
WHEREAS, as part of the 2022 rat...
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