The Wisconsin Public Service Commission (PSC) regulates water utilities, and before a utility can raise its rates, it must file for a rate increase with the PSC. This process can be slow and labor intensive, which is why we’ve come up with a list of best practices to make things a little easier.
ABOUT THE APPLICATION
In its application, the utility provides detailed information and proposals about the rate increase request. PSC staff analyze the utility information and proposals and develop additional information, as necessary. The PSC also requests a comment period and holds a hearing to gather information, ideas, and opinions regarding the issues raised in the utility’s request. The Commission will then review this information and determine if a given rate increase is appropriate.
BEST PRACTICES
Have Information Organized at Time of Application. Being well organized will help your utility respond to PSC data requests, customers questions, and inquiries from the Utility Commission.
Consider Timing. For straight-forward cases, it takes an average of 8 months to a year to implement new rates after filing. This should be taken into consideration in the early planning phases to determine the best time to apply.
Review Construction Approvals Prior to Filing. For projects that require construction approval, ensure that your utility has received approval for all necessary projects prior to filing. Not obtaining the necessary approvals may cause significant delays.
Do not be Afraid of Incomplete Application Letters. The PSC performs an initial screening of rate case applications once filed. This allows room to correct items that were not accurately completed and may significantly delay the rate case process. Incomplete application letters give utilities an opportunity to correct items in the application and ultimately expedite the rate case process for the utility and the PSC.
Be sure Final Applications are Complete. There are common application errors that can cause significant delays. These issues are now reviewed during the initial application screening process. They include:
a. Completing Attachment 19 and 19a of the rate applicationb. Resolving problems with any customer billing data
c. Classifying plant properly
d. Classifying Contributions in Aid of Construction (CIAC) plant accounts in both test year and prior year
Expect Many Questions and Answers from the PSC in Data Requests. Responding to PSC data requests with timely, detailed-oriented answers will aid in the expediency of the rate case. Many delays occur during this phase.
Submit your Own Cost of Service Study and Rate Design. Submitting your own Cost of Service Study and Rate Design provides more input into your overall rates and more control over the outcome. In addition, the PSC may use your Cost of Service Study and Rate Design as a starting point rather than starting from scratch.
Keep your Governing Bodies Informed. It is best to keep your governing bodies informed early and throughout the rate case process. Doing so could avoid any future delays.
Learn More
If you have questions or would like assistance filing a rate increase application, please contact an R/M expert today.
About the Authors
Bridgot A. Gysbers
Economic Consultant
Bridgot recently joined the R/M team as a Financial Consultant. She has a diverse background in utility regulation, including 16 years of experience in municipal and investor-owned utility regulation in energy, gas, water, and sewer utilities. Bridgot developed the revenue requirement for a majority of the water rate cases regulated in Wisconsin and served as the lead auditor for several of the most complex investor-owned cases involving electric, gas, and water utilities. At R/M, Bridgot works to find financial and management solutions for public utilities.
Edward F. Maxwell
Economic Consultant
Edward joined Ruekert & Mielke, Inc. (R/M) in 2017 as a financial analyst. Before joining R/M, he worked in private-sector finance, analyzing capital investments, forecasting expenses and revenue, and crafting department budgets. At R/M, he creates financial solutions for all clients, from municipalities to corporate businesses.
