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District 10

Alder Yannette Figueroa Cole

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Alder Yannette Figueroa Cole

Contact Information

Home Address:

4327 Milford Rd

Council Office

Common Council Office:
210 Martin Luther King, Jr. Blvd
Room 417
Madison, WI 53703
Phone: (608) 266-4071
Fax: (608) 267-8669
WI Relay Service

Alder Figueroa Cole’s Updates

Madison Water Utility's rate case & MadCAP

October 29, 2022 9:39 AM

PSC provides decisions on Madison Water Utility's rate case: In December 2021, Madison Water Utility (Utility) filed a rate case application with the Public Service Commission of Wisconsin (PSCW). One of the primary goals was to obtain sufficient funding to maintain required levels of re-investments in water infrastructure on a timely manner. The Utility's last rate case was approved by the PSCW in 2020, in which the Utility was required to file a new rate case in two years to ensure rates are aligned with costs. The Utility is delighted to inform its ratepayers, the public, and all other interested parties that the PSCW has approved the Utility's rate case.

The PSCW approved the Utility's customer assistance program (CAP), marking the first approval of a water utility CAP in the state of Wisconsin. The City is leveraging this historic opportunity to introduce the Madison Customer Assistance Program, or "MadCAP", a comprehensive customer assistance program covering all six services on the Municipal Services Bill, including Water, Sewer, Stormwater, Urban Forestry, Resource Recovery, and Landfill. 

MadCAP will provide financial rebates to lower-income families on their entire municipal services bill. For perspective, the average residential municipal services bill is currently $96.50 per month. MadCAP will offer a rebate of $30 per month for families earning 30 percent or less of the area median family income (AMI) and $20 per month for families earning between 30 and 50 percent of the AMI. These rebates will reduce the municipal services bill of participating customers by approximately 30 and 20 percent, respectively. The City's overarching goal is to provide financial relief for all qualified families. MadCAP allows the City to maintain the highest levels of service possible, without financially burdening any of our valued residents. 

The City plans to launch the MadCAP program in January 2023, pending final City budget approval in November.

Learn more about MadCAP and the other PSCW approvals in the news release.

 



 

A few weeks ago an email from a constituent spark a conversation with Krishna Kumar, General Manager of the Water Utility.  Here are some of the highlights of that discussion:

"A quick backdrop on the major drivers of the current rate case that the Utility has submitted for the WI Public Service Commission's approval.  It is a very lengthy and detailed process at the end of which the PSC needs to be satisfied on the basis for a rate increase before it will approve the rate increase.  It is not that the Utility unilaterally raises the water rates. 

The current rate case submitted by the Utility will result in a 16.71% increase for an average residential bill which is based on a typical customer having a 5/8" water meter, using 4,000 gallons per month, calculated at the proposed rates compared to the present rates. Over half of this increase will be from the infrastructure renewal charge, which will provide a dedicated source of funding for annual water main replacement. Different customer classes will experience varying levels of impact to their bills; for example, the average business customer would expect to see a 21.71% increase. See the calculations for the average residential bill below, which reflects the 16.71% increase:

Average Residential Bill Calculation 

Avg. Monthly Bill at Present Rates 

Avg. Monthly Bill at Proposed Rates 

General Service Charge 

$13.80 

$13.76 

Water Use Charge 

$16.12 

$18.04 

Infrastructure Renewal Charge 

$0.00 

$3.12 

Total 

$29.92 

$34.92 

 

This 16.71% rate increase is between the effective date for the last increase (07/02/2020) and an estimated effective date for the currently requested rate increase (~12/01/2022), which represents a span of approximately 29 months.  If we are to annualize the 16.7% rate increase, it translates to approximately an annual rate increase of 7%, which is lower than the current annual inflation rate.

Utility's request for a rate increase is based on our current projected operating and capital needs, which includes our request to cash fund $5,000,000 in water main replacement annually. The Utility's infrastructure comprises 

  • 22 deep water wells
  • 9 Booster Pump Stations
  • 10 reservoirs
  • 1 Operations Building
  • 1 Administration Building
  • 2 Vehicle Storage Buildings
  • 1 Materials Storage Building
  • over 900 miles of watermain pipeline
  • approximately 100 vehicles
  • over 40 heavy machinery/work vehicles

This represents about $417 million of infrastructure and equipment that will need to be replaced over time (the $417 million figure is based on the cost of the infrastructure at the time it was installed, not current costs to replace). 

Our watermain pipelines range in age from pre-1900 to 2022 and initially cost over $218 million to install.  Our water main pipeline replacement program is ongoing as our current watermain pipelines age and we add new mains.  The current rate request before the WI PSC would provide $5 million per year to replace watermains, which would allow the Utility to replace about 0.4% of its watermains per year. Ideally, about 1.0% of watermains should be replaced every year, allowing the utility to replace all of its watermains over a 100-year period.

The current rate request would also allow the Utility to replace about $7.0 million of its $199 million of other infrastructure and equipment per year. The Utility currently has a substantial amount of debt service from financing previous infrastructure replacements, but this rate request will allow the Utility to pay down existing debt and move towards cash funding of all of the routine annual infrastructure replacements, saving substantial interest expenses in the future. As debt is paid off, the Utility plans to gradually increase its main replacement program to replace 1% of mains per year."

 




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