The Public Service Commission of Wisconsin (PSC) approved a 34% water bill increase for average residential customers in Lodi on Thursday, June 13. The increase will be used to recover the cost of the $1.77 million booster station built without prior approval.
The PSC had previously voted May 23 to allow the recovery of the cost of the project in the city’s current water rate case. Director of Administration Julie Ostrander said the City of Lodi will be implementing the new rates Aug. 1. The city plans to release a press release regarding the increase Wednesday, June 19.
Under the current rates, the average residential customer is paying $26.10 each month. With the 34% increase, this will result in a $9 increase to $35 a month for customers using 3,000 gallons of water.
While Lodi has not had compliance issues in the past, the commission did express concern for the city’s deliberate actions to build the booster station during their investigation.
The controversial west side booster station was allowed to be recovered through the water rate case in a 2-1 decision from the PSC, with Commissioner Ellen Nowak dissenting. In PSC documents, she said she believes disallowing the recovery in rates was warranted in this case and it is unfortunate there are no shareholders to hold accountable.
“Here, the ratepayers of the utility are the ones who suffer the consequences of their leaders’ and officials’ conduct. While not an ideal situation, it does not mean we should not act and enforce our rules. If we are not going to hold a utility accountable for deliberately defying...statutes and the Commission’s rules that are in place to protect ratepayers, then when will we?” Nowak wrote in her dissent.
This decision will increase the revenue for Lodi Municipal Light and Water Utility over $236,000 to a total revenue of over $943,000. This will result in a net income of over $314,000. If the utility was not allowed to recover the cost of the booster station, the city would have received a net income of around $78,000.
The city previously began construction on a west side booster station for the new primary school and residential development in April of 2017. The PSC opened their investigation into the project on Aug. 8 after the booster station was built. The booster station was placed into service on Aug. 28.
Lodi submitted an application for authorization to build the booster station on March 20 of 2018 to the PSC. The project’s engineer consultant, MSA Professional Services, advised the city the construction of the booster station could not start until they received authorization. However the project began before approval due to time constraints.
According to PSC documents, the City of Lodi said MSA Professional Services believed the merits of the projects, the project schedule and the request for construction authorization would have resulted in an expedited review and issuance of authorization.
In January, the city received a letter of reprimand and a referral to the state attorney general after failing to obtain a certificate of authority. There has been no further update on the city’s case with the attorney general.