Marshfield Utilities seeks permission to raise rates
FOR HUB CITY TIMES
MARSHFIELD – Marshfield Utilities has filed a rate increase request with the Public Service
Commission of Wisconsin. This is the first time in six years the publicly-owned utility has sought to increase electric rates.
The rate case was anticipated for recovering costs of a new building project and due to increased operating costs.
The costs associated with the new building were locked-in contracts prior to the current inflationary increases, which has resulted in substantial savings compared to bidding the project now. “MU is experiencing the same type of inflationary increases as our customers for our normal operations,” according to a press release. “There have been dramatic increases in the prices for materials, supplies, contracting services, and fuel. For example, the cost for a typical transformer has increased from around $1,500 to $6,000 over the last year due to supply-and-demand issues. We have taken steps to lessen the impact through various measuring, like using alternate suppliers, altering designs, and delaying purchases.”
The increase in fuel cost has also increased the cost of purchasing power, according to the release. The price of natural gas is determined on the open market and influenced by both national and international events. Since July 2021, the price of natural gas has more than doubled. It is the highest it has been in almost 15 years, and it is expected to go even higher. Higher natural gas prices cause higher energy cost.
Since 2016, MU has invested $29 million in improvements in the electric utility. “These investments upgrade the electric distribution system infrastructure and reduce outages to customers,” the release also states. “Additionally, local operating expenses have increased 10 percent. If approved, the overall increase in electric rates would be eight percent, which is an average increase of about 1.3 percent per year.”
MU has maintained and will continue to have significantly-lower rates compared to cooperatives and investor-owned utilities in surrounding communities. According to a 2021 rate comparison, MU residential rates average 33 percent lower than surrounding utilities. The press release adds, “MU understands that any increase in rates can create financial challenges for our customers. We encourage customers to visit our website, www.marshfieldutilities.org, for tips on ways to reduce energy usage which can help mitigate any increase in rates.”
The PSCW will perform cost-of-service studies to determine the actual rate increase that will take effect in early 2023. Marshfield Utilities customers will have the opportunity to address the PSCW during the Rate Case Hearings that will be scheduled at a later date.
“With more than 13,800 electrical customers and 8,300 water customers, Marshfield Utilities maintains a rate of operating profit that provides adequate funds to meet current and future operational needs,” the press release adds.