In this edition:
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Ask the Commission
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Simplified Rate Case Eligibility Letters
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The Benefits of Regular Rate Cases
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Watch For: Information on Phased-in Rates (PIRs)
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Lead Service Line (LSL) Webinar Available
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Deadlines & Upcoming Opportunities
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In the future, we hope to use this section to feature answers to questions we’ve received from our readers. Please send your questions to the Commission Water Policy Advisor, Angela James: angela.james@wisconsin.gov. We’ll feature selected answers in our next edition, expected in October 2025.
Simplified Rate Case Eligibility Letters
Is your utility eligible for a simplified rate case?
In the coming weeks, the Commission will be reaching out to eligible utilities by email to notify them that they qualify for a rate increase through the simplified rate case (SRC) process. Utilities are not required to file, rather this informational notification is meant to encourage the use of SRCs. An SRC allows qualified utilities to adjust rates in more frequent, but smaller, increments to help maintain revenue continuity, and may be processed in as little as 30 days. Interested utilities are encouraged to request an SRC application. New SRC rates can take effect no sooner than 45 days from the date the Commission receives the application.
Additional information about the SRC process, SRC application, and eligibility requirements is available on the Commission website: PSC Simplified Rate Case - Water Utility. The current rate increase factor for the SRC is 3 percent (3%) and will remain in effect until it resets on March 1, 2026.
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Why should utilities consider regular rate cases?
Just like it can be unappealing to maintain regular check-ups with your doctor and dentist, Commission data indicates that most utilities wait far longer than the Commission recommends in filing rate cases (see Table 1).
Rate Case Intervals – Table 1
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Utility Class
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Average Time Between Rate Cases (years)
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PSC Recommended Interval Between Rate Cases (years)
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AB
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8.7
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3-5
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C
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11.2
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5-7
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D
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13.8
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7-10
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But why is it so important to maintain regular rate cases? Just like a health check-up, the benefits of regular rate cases can outweigh the time, resources, and challenges associated with filing.
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Regular rate cases encourage proactive planning for infrastructure needs. By planning the timing of infrastructure repair and replacement, utilities can also plan for measured adjustment in rates to accommodate current and future needs.
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Regular rate cases ensure that utilities are consistently generating sufficient revenue to protect against financial challenges. This includes generating sufficient revenue to cover debt payments and set aside emergency operating cash reserves.
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Regular rate cases help to moderate the rate impacts associated with increased operation and maintenance (O&M) expenses such as those associated with electricity, labor, and chemicals. These are difficult costs for a utility to control, and waiting a long time to incorporate them into a utility’s revenue requirement may result in rate shock to customers and impact cash reserves.
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Regular rate cases allow both the utility and the Commission to confirm information about the utility, which can help communities transition duties at the local level when personnel change. The Commission often works with utility managers and village clerks who use prior rate cases or construction authorizations to understand prior activities performed for the utility by former employees.
Delaying rate increases can result in sudden, steep rate increases that create a significant challenge to customer budgets. Failing to maintain financial health can also place a utility in a reactive, crisis-driven position, especially when new regulatory obligations emerge, such as the lead and copper rules or PFAs regulations. Incremental adjustments made through frequent rate cases help to maintain adequate revenue without overwhelming customers and help a utility assess its infrastructure and plan for the future. In between conventional rate cases (CRC), utilities should track key financial performance metrics and consider using the SRC process to make incremental, inflationary increases. Proactive, consistent rate planning supports long-term utility financial health and can help minimize rate shock to customers.
In an effort to smooth out the impact of substantial rate increases and avoid rate shock to customers, the Commission has approved the limited use of phased-in rates (PIRs). In most cases, significant rate increases are triggered by major construction projects, a change to the utility’s method of recovery for collecting public fire protection charges, or a long interval since the utility’s last rate case. Since PIRs ultimately delay the utility in achieving its required revenue requirement, PIRs must be carefully considered. However, the Commission recognizes that PIRs are a tool which water utilities can use to address customer affordability concerns in the face of very large rate increases. Staff have added a Phased in Rates (PIRs) resource guide to the Water Reports and Resources page under “Considerations for Rate Increases” section. Look for updates to the CRC application in the future.
Lead Service Line (LSL) Webinar Available
On June 24, 2025 the Commission hosted a webinar on funding private-side LSL removals using customer rates. The webinar explained the history of Commission decisions surrounding private-side LSL removals, the development of utility financial assistance programs (FAPs) under s. 196.372, Wis. Stats, and prohibitions on using regulated customer revenue for costs associated with implementing private-side removal projects funded by the Safe Drinking Water Loan (SDWLP) program. Staff also discussed how to account for using utility cash-on-hand or other non-regulated utility funds to support private-side removals funded by the SDWLP. A recording of this webinar, along with the webinar slides, is available on our webpage at the PSC Lead Service Line (LSL) Replacement page. Please watch this webpage for additional resources as they become available.
Upcoming Deadlines & Engagement Opportunities
- July 14-18: Look for Commission auditors, Stephen Elmer and Troy Gazza, at the Clerks & Treasurer’s Institute.
- July 31: Deadline to file rate cases seeking to use a 2025 Test Year.
- September 9-12: WI AWWA Annual Meeting in Madison.
- September 15: Recommended deadline to file any requests to the Commission for rate increases associated with Safe Drinking Water Loans closing next year. (See DNR guidance)
- September 25: (Tentative) Commission auditor Amanda Slater speaking to the Southwest Wisconsin Water Operators Group about Annual Reports.
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