(Marshfield, WI) Marshfield Utilities (MU) has filed a rate increase request with the Public ServiceCommission of Wisconsin (PSCW). This is the first time in six years that MU has sought to increase electric rates. The rate case was anticipated for recovering costs of the new building and due to increased operating costs.
The costs associated with the building were locked in contracts prior to the current inflationary increases which has resulted in substantial savings compared to bidding the project now.
MU is experiencing the same type of inflationary increases as our customers for our normal operations. There have been dramatic increases in the prices for materials, supplies, contracting services, & fuel. For example the cost for a typical transformer has increased from around $1,500 to $6,000 over the last year due to supply and demand issues. We have taken steps to lessen the impact through various measuring like using alternate suppliers, altering designs, and delaying purchases.
The increase in fuel cost has also increased the cost of purchasing power. The price of natural gas is determined on the open market and influenced by both national and international events. Since July 2021, the price of natural gas has more than doubled. It is the highest it has been in almost 15 years, and it is expected to go even higher. Higher natural gas prices cause higher energy cost.
Since 2016, MU has invested $29 million in improvements in the electric utility. These investments upgrade the electric distribution system infrastructure and reduce outages to customers. Additionally, local operating expenses have increased 10 percent. If approved, the overall increase in electric rates would be 8 percent, which is an average increase of about 1.3 percent per year.
MU has maintained and will continue to have significantly lower rates compared to cooperatives and investor owned utilities in surrounding communities. According to a 2021 rate comparison, MU residential rates average 33% lower than surrounding utilities.
MU understands that any increase in rates can create financial challenges for our customers. We encourage customers to visit our website www.marshfieldutilities.org for tips on ways to reduce energy usage which can help mitigate any increase in rates.
The PSCW will perform cost of service studies to determine the actual rate increase that will take effect in early 2023. Marshfield Utilities customers will have the opportunity to address the PSCW during the Rate Case Hearings that will be scheduled at a later date.
Since 1904, Marshfield Utilities has been providing customers in the Marshfield, Wisconsin area with high quality service while managing rates to enhance the service area's economy. With more than 13,800 electrical customers and 8,300 water customers, Marshfield Utilities maintains a rate of operating profit that provides adequate funds to meet current and future operational needs.
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