Madison Utility Wants Biggest Rate Hike In Its History

The water utility in Madison, WI, is experiencing economic turmoil, a sign of the strain faced by many water utilities across the country.

“The Madison Water Utility is upping its request for a rate hike, from 26 percent to 32 percent, citing a dropoff in revenue. The increase, pending before the Public Service Commission, would be the largest single increase sought by the utility,” The Wisconsin State Journal reported.

“As of Dec. 31, the utility had a deficit of just over $6 million, according to Robin Piper, chief administrative officer, and Kathy Schwenn, finance supervisor. The deficit was discovered last month, when the 2017 annual report and 2017 annual audit were prepared,” the report continued.

Utility spokeswoman Amy Barrilleaux weighed in. “Revenues fell significantly short of where we needed them to be. We did not exceed our approved budget,” she said, per the report.

A significant drop in water use is one factor in the utility’s challenges.

“One of Madison’s largest water consumers was Oscar Mayer’s food processing plant closed last year. It used about 400 million gallons of water each year, but it used only 79 million gallons of water in the first few months of 2017 before permanently closing,” the report said.

Customer conservation has also resulted in lower water use.

“Low-flow appliances and water conservation efforts — encouraged in part by the water utility’s 2008 Conservation and Sustainability plan — have also decreased the average residential water use. Single-family homes would use about 75 gallons per-person per-day 15 years ago, Barrilleaux told the State Journal in January, but now the average is just over 55 gallons, a goal the utility had set for 2020,” the report stated.

Customers voiced frustration over what they perceived as receiving a rate hike as a reward for their conversation efforts.

“It appears I will be paying more for my water, while I continue to do the right thing by trying to save this planet’s water supply,” one ratepayer wrote in a letter to The Wisconsin State Journal.

For utilities, balancing the pressure to keep rates low while also finding cash to upgrade infrastructure is a tremendous challenge. For ratepayers, rising rates mean affordability challenges. Water bill are sometimes unpayable for poor families.

“According to a recent report from the Urban Institute, more than two-thirds of poor families are ‘housing burdened,’ meaning they spend more than 30 percent of their annual income on housing. When so much of families' paychecks go to rent or a mortgage, they struggle to cover other expenses,” Governing reported.

Heidi Goldberg, director of economic and financial empowerment programs at the National League of Cities, described what that means for water.

“Water and other utilities are often one of the last bills paid," she said, per Governing. "A lot of families end up [as delinquent customers] as a result."