Village of Hortonville weighs 42% water-rate estimate, staff asked to prepare PSC filing before July 31

At its April 2 Committee of the Whole meeting, the Village of Hortonville heard a water and sewer rate study from consultant Ariana Schmid of Ellers, who said a conventional Public Service Commission (PSC) filing based on current inputs would produce a roughly 42% water-rate adjustment and that filing before July 31 could lower that figure.

Schmid, who led the presentation, said the PSC27s conventional rate-case methodology uses depreciation and a net investment rate base (NIRB) that increases as new capital is added, which can produce large "catch-up" increases after a long gap between filings. "Right now your increase you're looking at is about 42%," she said, adding that the number comes from the PSC math and noted it27s tied to asset values and the commission27s benchmark rate of return.

The consultant offered three practical options: file a full PSC rate case before the July 31 test-year cut-off (so new assets placed in service after the test year are not included), file a simplified rate case this year to secure a 3% increase now and buy time, or do nothing and accept larger increases later. Schmid cautioned that a conventional filing is a lengthy, information-intensive process that typically takes nine to 12 months and that the PSC may adjust the proposed increase during review.

Schmid also reviewed the utilities27 financials: the water utility is projected to have just over $1 million in cash on hand at the end of 2026; Ellers27 recommended minimum cash benchmark is about $694,000 (roughly four months of O&M plus depreciation and one year of debt service). She said a mix of debt and cash funding is shown in the capital-improvement plan (CIP), including a modeled large debt issuance (about $1.4 million) in 2030 for a vault project that drives future debt-service costs.

On sewer, Schmid noted the PSC does not govern sewer rates and that the village sets sewer rates on a cash basis. The sewer utility currently has debt service of about $329,000 per year that matures in 2030; Ellers modeled modest, staggered sewer increases (examples: 4% in 2028, 2030 and 2032) to preserve debt-coverage ratios and avoid a single, large spike later.

Schmid quantified customer impacts using sample scenarios: the simplified 3% increase this year would raise the average residential annual bill by roughly $9 (both utilities combined, in the example), while the modeled long-term package of increases would add about $300 in annualized cost over a 10-year horizon for the sample residential user. She said a full rate case if filed in 2031 in the model could show a cumulative larger increase (an illustrative 55% full-case number was used in the presentation for a later filing scenario).

Council members asked clarifying questions about what projects are included in the CIP, capacity at the wastewater plant and the expected timing of reviews. One committee member recommended pursuing a full PSC filing before the July 31 test-year deadline and piloting monthly billing to spread customer impacts; Schmid said staff could present the proposed application results in June before an official filing and that the village could withdraw before a final PSC order, though that is rarely advised because of cost and staff time.

The committee did not take a formal roll-call vote on rates during the meeting, but the discussion produced a working consensus to direct staff to proceed with study work for a possible PSC filing timed to meet the July 31 test-year cut-off while also considering a simplified 3% increase this year and exploring monthly billing to ease customer cash-flow impacts. The committee adjourned at 6:00 p.m.