Oak Creek hopes to dictate water prices

Utility seeks autonomy from Public Service Commission

Jan. 8, 2013

Oak Creek - In light of a recent Public Service Commission decision that has the city losing money on the water it sells to other communities, the Common Council voted last week to pursue state legislation that would allow the city to negotiate its own rates.

The legislative draft, written by Steven Yttri, general manager of the Oak Creek Water and Sewer Utility, would make it so municipal utilities that sell large amounts of water on a wholesale basis would not have their rates set by the PSC.

The council supported the draft, which has been sent to 21st Assembly District Rep. Mark Honadel. He hasn't given official backing to the proposal yet, as he said he is waiting on advice from the Legislative Council.

Yttri said the PSC has ordered a rate system that has Oak Creek residents paying a disproportionate amount compared to Franklin and Caledonia, communities to which the Oak Creek utility sells water. He asserted that the city isn't recouping its cost to provide water to other communities.

He hopes to shift about $200,000 of additional costs to the buyers of the water.

Among the complaints set against the PSC was the number of contested rate cases Oak Creek has been in, including their latest negotiations with Waukesha. Yttri said the rate cases have cost the city money, saying that the city has been in the rate application process since May 2011.

If the legislation is not adopted by the state, it could mark the end of discussions with Waukesha, Yttri said.

"If we're going to lose money on our existing wholesale customers, we're not going to add more wholesale customers and lose more money," he said.

The current negotiations between Oak Creek and Waukesha are up in the air after a ruling by the PSC to cut nearly $500,000 to Oak Creek from the $3.5 million in total sales between Oak Creek, Franklin and Caledonia, stemming to a rate case that began before the Waukesha-Oak Creek negotiations began.

"My constituents want a guarantee that whoever we sell water to is not getting water cheaper than what our residents are paying for water. That's the main concern," District 1 Alderman Dan Jakubczyk said in supporting the move to seek a legislative change.

Oak Creek Mayor Stephen Scaffidi was in line with the council in approving the resolution.

"You should be compensated for delivering water to your customers. At some point we need to make sure we're recovering our costs," he said.

There is no established date for a bill to be brought before the Assembly.

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