Madison Water Utility to explore possible rate increase

Madison Water Utility will present its 2014 operating budget plan to the Water Utility Board at tomorrow night's monthly meeting. Part of the budget plan includes a proposed rate increase of 22% to become effective in the second half of 2014. The current water rate is $2.81 per 1,000 gallons. Any rate increase would apply to the water portion of the bill only. The rate increase, which must be approved by the Public Service Commission, would mean the average residential customer's bill would go up by about $4.05 per month. Even with the increase, Madison's water rate would still be below the statewide average and well within the affordability guidelines set by the Water Utility Board. Madison Water Utility is exploring the rate increase as part of our commitment to renew and rebuild much of the city's water infrastructure - we're working to replace some 400 miles of pipe over the next 40 years at a cost of more than $7.5 million per year. When other needed improvements to water quality and supply are added in, annual capital investments top $20 million per year. The main drivers for the rate increase are debt service on the revenue bonds issued to finance the projects, and an annual payment to the City of Madison based on the value of utility assets - called the Payment in Lieu of Taxes (PILOT). The rate increase will enable the utility to continue providing a high quality, reliable water supply. It will be more than three years since water rates have gone up for Madison Water Utility customers. The Water Utility had planned to file for a 12% increase in 2013, but it was not needed because of high water use during last summer's drought.

Links