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Home My WebLink About30758 / 80-32l June 5, 1980 � 32 i• -• r i r a• �«• a Iiv'ITL�TED BY: CIT`C ADi�ffNISTRr1TION r�s. • p _ � BF, i'I° �Gi;J,� by �:e Ccxir,vn Ccurr.il c3f tha_ C.;';.y oi OsYilcosh that tr,e interim water rates approved by the Stat� of Wisconsin Publir_ Senrice Canndssion, dated May 20, 1980, are hereby ac�pted and the appropriate depaYtrnents of the City o.f OsYilcosh are authorized and directed tc� put s�id rates into affect effective June 1, 1980. BE IT FURTI-]ER RESOLUED that the Mayor is authorized to write the Rablic Service Comnission of Wisconsin to urge an expeditious audit of the Oshkosh Water Public Utility Operation and issue its final decision on a perma.nent rate structure that gives consideration of a flat rate increase per 100 cu. ft. in lieu of a percentage increase. S'JB�dITTED BY ° 3� � .',O;ED /�`t'�`� 4'��—� A ��k� � a.�. �' ! ��'-"��"= ,`� `-��, . �� State oi ��isconsin \ PUBLlC SEftViCE COMM4SS{ON 14ay 20, 1980 STANLEY YORK, CHAIRMAN EDWARD ht. PARSOiVS, JR., CDMMISSIONER WIL41E J. NUNNERY, CO��iMISSIONER Hill Farma Stace Offics Buildinp Matlison, Wisco�sin 53702 (608)266-1Y41 File No. 1� 4$ O-41R- 2 Oshkosh i`un. Water Utility City H211 215 Church St. Oshkosh, t�IS 5k9�1 Edward Nokes 2217 Henry St. Neenah, WI 5�!956 William P. Plagle Asst. City Attorney 215 Church St. Oshkosh, WI 54901 Application of the City* of Oshkosh, Winnebago Couaty, as a Water Public Utility, for Authority to Increase Rates We enclose certified copy o£ Findinps of Fact and Interim Order issued in the above-entitled ma.tter. Very truly yours, L7�'t� %.��'C�'t�,� �- i Letiris T. idittness Executive Secretary ges encl. pr'�l � P`�'�:':iLct7 �1�Y 2 0 198� � � BEFORE TAE PUBLIC SERVICE CO�Ii•SISSION Oi WISCONSIN Application of the City of Oshkosh, ) F7innebago �ounty, as a Water Public } 4480-t•7R-2 Utility, for Authority to Increase ) Rates ) FINDINGS Or FACT AiJD iNTERI.4 ORDER dVAPEO 'N�TM AND CEPTIFIfO aY w B{�A FULL. TRUE AND COIMECT CO� TNE ORIOINAL ON FILE IN MV OFF�CI ' P+1 fa'� 2 0 1980 '� .�T �� , � ' : cxK!;Wa Sec: a:crq .._..�_ e...a..e e,,,.�n.ieelan ol Wleton:i� ', . ��l, � '. The city of Oshkosh, Winnebago County, as a water public utility, filed an application with the commission on February 22, 1980, under ss. 196.03, 195.20 and 196.37, «is. Stats., for authority to increase water rates. Appiicant requested an is.mediate interim rate in- creaGe of 6 cents per 100 cubic feet for all consumption in es;cess of 800 cubic feet per quarter, oz approximately $156,000. Applicant zequested a final increase which would result in a 7.SOa return on net investment rate base. Apnlicant stated that the cur=ent rate of�return on rate base is insufficient to meet current or future debt service commi tmen ts . � Application for interim rate relief qranted as a 12.II� surcharqe to existing rates for service. Such surcharge will increase annual revenue by an estimated $192,67Q. Pursuant to due notice, hearing was held at Madison on April 18, 1930 before Examiner James �t'olter. �. . •�� , �. , . �� `Appearances: � � � : � C�ty of Oshkosh, as a water public utility, � bY ,.'� ; Ed�vard A. Nokes, City Comptroller `% ` �Qilliam P. ilagle, Assistant City Attorney � \�• Of the commission staff: Kevin H. Klingbeil Accounts and Finance Division Lou Cluster Utility Rates Division Findings of Fact TH� COi�iMISSION FINDS: The city of Oshkosh, Winnebago County, is a water public utility as defined in s. 196.01, [�is. Stats., �ahich provides water utility service to the public in the city of Oshkosh and adjacent areas. Applicant's present rates do not provide operating revenue sufficient to maintain a reasonable earnings levele Accordingly� an interim surcharge of 12.8$ will be authorized herein, based on staff's review of applicant's estimated costs for the test year 1980. This surcharge will provide an esti- mated 12.4� increase in annuaZ operating revenues. The differ- ence between the level of surcharge and the corresponding in- crease in annual operating�revenue occurs because miscellaneous revenues not resulting from user charges are unaffected k�y the surcharge. -2- � � The average net investment rate base for the test year 1980, wh�.ch is reasonable and just for purposes of interim rates in this proceeding, is as follows: Utility Plant in Service Accumulated Provision for Depreciation Net Plant in Service Add: Diaterials and Supplies Less: Contributions in Aid of Construction Averaae tlet Investment Rate Base $12,051,757 2,960,497 $ 9,091,260 146,844 2,719,073 $ 6,519,031 A comparative income statement for the test year 1980, showir.g the results of operation and the effect of the interim rate increase authorized herein, is as follows: Operatina Revenues Operation & Mainten. Exps. Depreciation Expense Anortization Expense Taxe� ib tal Operating Exps. Net Operating Income At Present P,ates $1,552,568 $1,017,851 177,527 64,285 192,000 1,451,663 $ 100,905 Authorized Tncrease $192,670 219 $ 219 5192,451 At Rates Authorized ilerein $1,745.238 $1,017,&S1 177,527 64,235 192,21� a"1,451,832 $ 293,356 Ra*_e of Return 1.55� 4.5�7� The existing rates of the Oshkosh �9ater Utility are u^reasor.abie because of inadequacy. The requested increase of $156,00� ar.nnally will result in a return on net investment rate base of 3.94� which is less than the composite cost of debt of 4.488 and therefore unreasonably low. -3- .� � �� The $192,670 increase in rates authorized herein is equivalent to a 12.4� increase in the present level o£ operat- ing revenue. The interim rates authorized herein will yield a 4.50% return on the average net investment rate base. This rate of return will provide a 4.52$ return on municipal equity and a 2.27 times interest coveraqe, based an capitalization of 56� �un?cipal equity and 440 long-term debt at a composite cost of 4.48�. The aforesaid respective rates of return on equity and rate base are reasonable and just for the purpose of establishinq interim rates. Because Oshkosh �4ater Utility is now earning a return on rate base belocv the level authorized in 1978, the commission finds it reasonable and just to authorize an in�erim surcharge to be applied against all billings in order to generate the necessary increase in revenues. Applicant is now earninq less than its authorized return, and in light of today's economic conditions it is reasonable tha� the ir.ierim order �vill be made effective five days after issuance. The rate increase authorized herein complies with the volunta=y wage and price standards issued on December 13, 1978 as revised by the Council on `•7age and Price Stability to the ex- tent consistent with the co,mmission's statutory responsibility to set rates for utility service which recover the cost to provide that service. -h- I� I� �� The authorization to increase water rates is classi- fied as a Cateyory 3 Action under s. ^SC 2.90(3), Wis. Adm. Code. It consequently requires neither an environmental impact statement �inder s. Z.11, Wis. Stats., nor an environmental screening under the Revised Guidelines for the Implementation of the Wisconsin Environm=ntal Policy Act issued by Executive Order No. 26, February 1976. Conclusion of Law THz COMI�SISSIOL; CONCLUDES: That it has authority under ss. 196.03, 196.20, 196.37, and 196.395, Wis. Stats., to authorize applicant to apply a 12.8� surcharge to all bills for water utility service including fire protection charges, in accordance with the Eoregoing findings of fact; and that such interim order should be issued. Interim Order THE CO24idISSION TIiEREFORE OP.DERS: l. That the city of Oshkosh, Winnebago County, as a water public utility, be and it is hereby authorized to place into effect a 12.88 surcharge on all bills rendered for water utility service and fire protection service, subject to refund, if the commission finds in its final decision on this case that refund is appropriate. - 5- � � . �� 2. That the effective date of this order is five days after mailing to, or physical service upon the parties to this proceeding. The surcharge authorized herein will becoma effective on that date provided it is on file with the commission and placed in all stations and utility offices. The utility sha11 i�nmediately inform the commission, in writing, of the date the authorizea surcharge taY,es effect. 3. That the city of Oshkosh, as a cvater public utility, sha11 prepare bill information which appropriately identifies the authorized surcharge and provide such informa- tion to all customers with the first billing which contains the authorized surcharge. A copy of such information to be affixed to the customers' bills shall be submitted to the commission. 4. That the city of Oshkosh, as a water public utility, shall keep records that will enable it to make appropriate refund in the event the commission orders a refu:.d in its final order in th:.� p�oca��. ..:17 . Dated at Piadison, �4isconsin� By the Corunission. t�IAY 2 0 1°80 �� J �- �" !'-G�l.i.�.�. � . �Liil- �. !•�i f Lewis T, i-Iittness E�:ecutive Seeretary b v � � � � � � �, � �� m H � bD b � � •r� a� +> ¢ 5 � O ri J� O � � � � � b w .� � H N U b v � � � � � � � i� a 0 � ¢ O H S'. 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