RACINE - Water rates in Racine and surrounding communities could increase by as much as 15.5 percent according to a proposal before the state's Public Service Commission.
Any increase wouldn't take effect until some time next year, once PSC officials have completed an exhaustive review of the utility's rate case, according to Keith Haas, general manager of the Racine Water and Wastewater Utilities.
Haas is requesting the rate increase because customers of all kinds are using less water and have been for several years, he said. That means less revenue. The PSC must approve any requested rate increase.
"This is just trying to get the proper rates that would give us the revenue required to stay in business. We're not trying to make up our losses," Haas said. "If I keep going in this trend, somebody is going to come in and close the doors."
The sale of Diversey's polymer business at SC Johnson's Waxdale plant in Sturtevant, the water utility's largest customer, accounted for the most significant drop in usage, 17.6 percent, according to utility officials.
Racine provides water to 34,000 customers (residential, commercial and industrial) in Mount Pleasant, Sturtevant, Elmwood Park, North Bay and Caledonia, which is a wholesale customer.
Customers are using less water than at any time in the past 50 years, Haas said.
Residential growth (or a lack of it), industrial usage and Mother Nature (a lot of rain) all contribute to water usage, Haas said.
The situation is so bad Haas had to ask the city for a loan this year to move ahead with a $5 million capital improvement plan, because the utility couldn't get bonds on its own.
"They said the rates we have won't support going out for a bond issue. The only way to get more money is to increase rates," Haas said. "I'm at a point where I can't replace one water main without a little help."
The rate increase would generate an additional $2,659,847 in revenue for the utility, according to the proposal.
That means an average residential ratepayer could see an increase of $8.55 per quarter or about $34 per year ($3 per month) for the cost of water, Haas said.
Haas said the utility has lost an estimated $2 million in revenue in the past two years because of decreased water usage.
The last time Racine officials applied for a rate increase to the PSC was in 2008. The increase was approved in 2009.
At that time, the PSC approved the utility's request, which resulted in a 19.4 percent increase for the average residential customer. That was close to what Haas had requested, he said.
Officials in Caledonia, which operates its own water utility, are waiting to see what happens.
Caledonia buys water from Racine and Oak Creek. The only residents who would be affected by Racine's increase would be those who get water from Racine, according to Caledonia officials.
Ron Keland, chairman of the Caledonia Sewer and Water Utility commission, said the village can't do anything until PSC officials make a decision on Racine's request, which could take several months.
"We have to wait and see how the Public Service Commission reacts. Then we can react to that. Right now we're in a holding pattern," Keland said. "We can't do anything proactive. It's a process that is driven by the city of Racine."