Some water utilities in Wisconsin have had trouble with the PSC over water meter replacements. Water utilities do not need PSC construction authorization for routine meter repair or replacement. So, what is non-routine? PSC staff considers replacing more than ten percent of meters in a year or changing metering technology non-routine. Upgrades from manual reading to drive-by automatic reading or from AMR to remote advanced metering infrastructure require PSC construction authorization.
If the PSC discovers an unauthorized project in progress, expect an order to cease work, notice of a PSC investigation, and questions about what you are doing and why. You must apply for a construction authorization before restarting work. If the PSC discovers an unauthorized project after completion, it will still formally investigate and ask questions. If you've asked for new rates, expect delays while the PSC investigates.
You need PSC construction authorization for projects costing more than $299,000 or 25 percent of your annual revenue. Projects that cost less than $299,000 don't require authorization regardless of their purpose, but the PSC may count similar projects in different years together to reach the threshold. Some projects, like pump, filter media, and hydrant replacements, specifically don't require construction authorization. Water main installation or replacements are exempt, unless they extend outside your service area or are more than three miles long. Routine maintenance is exempt, but projects that are capitalized in rate base aren't maintenance. For example, building or replacing a water tower requires authorization, but painting it doesn't. If a project includes exempt and non-exempt work, the PSC classifies the whole project as exempt or not based on its overall purpose.
Construction authorization takes time and effort, but it's better than an order to cease work. For help navigating these regulations, contact our experts.
About the Author
Andrew J. Behm
Andrew is responsible for finding financial and management solutions for public utilities at R/M. Before joining R/M, he provided management and financial assistance to municipal water, wastewater, and energy utilities in Wisconsin and around the country, including work as an analyst at the Wisconsin Public Service Commission.