WATER UTILITY SUBMITS RATE REQUEST

Madison-Madison Water Utility has submitted a rate increase request to the Public Service Commission of Wisconsin (PSCW) for review. The Utility is asking PSCW to authorize an 18% increase in water rates. If this rate increase is approved by the PSCW, the water bill sent every six months to the average Madison residential customer will increase $14.14. According to Utility officials, the rate increase is needed to cover increases in operating expenses and to retain the Utility's ability to finance the replacement of an aging infrastructure and for water quality improvements. The Utility posted a loss in excess of $680,000 for 2007 and has applied to the City for a temporary loan of approximately $3.5 million dollars to meet its obligations. The rate increased proposed by the Utility is expected to provide revenues in excess of expenses for 2009 and enable the Utility to pay off its temporary loan from the City in three years. Water sales have been essentially flat for the last decade. This conforms to the Utility's sustainability and conservation goals, but this does pose problems for the Utility's finances. The rate request will be reviewed by the PSCW over the next few months, and if approved, would begin being phased in around October of this year.