PSC Approves Rate Hikes For Superior Utility

The Wisconsin Public Service Commission of approved a Superior utility’s request to raise electric, water and gas rates. The utility sought an increase to pay for improvements and a projected loss of income from the Husky Energy fires in April.

Superior Water, Light & Power will draw in an additional $1,306,424 under the rate increase, which is about $1.1 million less than the utility requested.

The commission approved an 8.55 percent increase in water rates, as well as smaller rates for electric and natural gas. The average residential customer will pay around $4 more per month for water with a monthly bill around $58.21.

The company proposed the hikes in part to offset lost sales to its largest water customer: Husky Energy. Husky Energy made up around 25 percent of the 843 million gallons of water sold to customers last year. The refinery isn’t expected to resume normal operations until 2020.

If Husky goes back online sooner, the utility will be required to return any excess revenues from water sales to ratepayers in a future rate case.

“We need to protect the ratepayers and ensure that any excess funds over the sales forecast go back to the ratepayers,” said commissioner Rich Zipperer.

Paul Holt, treasurer for SWL&P, said the utility appreciated the commission’s in-depth review and the input of customers and stakeholders on the company’s request.

“We realize that any time to alter additional rate changes can be difficult,” said Holt. “We do think it came into a reasonable solution. Then, we’ll just try to make the best of it, but we’re very pleased with hanging up additional revenue and sales if they do come back sooner than what they project.”

The commission’s decision will not alter the utility’s plan to move forward with improvements to its water system, which include replacement of two miles of 100-year-old water mains under Belknap Street in Superior. The company is also making improvements to its water treatment plant, as well as upgrading its gas system and Winter Street substation.

Tom Content, executive director with the Wisconsin Citizens Utility Board, said the commission recognized that larger rate increases would have been a burden on ratepayers. He said the water rate increase spreads the pain among the utility’s customers in a “reasonably fair way.”

“Obviously, the explosion at Husky did require the utility to come in for some changes that ended up being needed,” said Content. “But, in the case of Enbridge, they did not allow them to reduce their rates in a way that really would’ve increased rates even more for residential and small business customers. That’s something we’re really pleased about.”

Enbridge Energy requested a 2.5 percent decrease in its electric rates as a large industrial customer. The company argued it’s paying around $1.4 million more than it costs the utility to provide service. Commission staff recommended a 0.89 percent rate decrease for large industrial customers like Enbridge.

“I think the customer’s comments are very well-founded. Their concerns are very well-founded,” said Zipperer. “The proposal is an attempt to do what I believe the commission can do without causing issues on other sides and creating other problems.”

A spokeswoman for Enbridge did not immediately respond to a request for comment on Thursday.

The Public Service Commission will issue a written order in the coming weeks. The rate increase could go into effect as early as Jan. 1, 2019. Superior Water, Light & Power serves 38,000 water, electric and natural gas customers.