The Gillett Water and Sewer Commission went 10 years without a sizable water rate increase but is now seeking rates that would nearly double the cost of water, according to documents filed with the Public Service Commission.
Average residential customers currently pay $17.91 in volume and meter charges for 3,000 gallons of water, plus the $11.67 Public Fire Protection fee on their monthly water bills.
If the PSC approves the rate request as submitted, it would add $16.74 to the volume and meter charges bringing that portion of monthly water bills $34.65. The PSC will separately consider increasing the fire protection fee but not necessarily by the 93.5% overall increase that the water utility is seeking.
Except for an approximate 3% rate increase the PSC authorized in 2024, the water utility hasn’t filed a full rate case since 2014. That resulted in a 21% increase to average residential customers, which went into effect in January 2016, according to the PSC.
The water utility has operated in the red the past two years, incurring a combined loss of $169,231, and the PSC suggested last summer that it file a rate case to improve its financial situation.
Despite the suggestion, Clerk/Treasurer Chelsea Anderson said it was the reconstruction of state Highway 22 that prompted the rate request.
“We would not have needed it (higher rates) without the highway project as we’re set to pay off a sizable loan this year,” Anderson said.
Water mains have been installed along Highway 22 (Main Street) and sanitary sewer main installation will follow, Anderson said. In April, storm sewer, sidewalks and repaving will begin with completion expected in November.
According to the rate application filed with the PSC in January:
• The village has obtained loans and a grant for its share of the utility work and needs extra revenue to finance the costs.
• Increased operating costs, largely due to inflation, are also driving the need for more revenue.
• Without the new rates, the utility would finish 2026 with an $88,365 income deficit based on a revenue estimate of $527,194 and expenses of $615,559.
The new rates are expected to boost annual revenue by $463,103, which would increase its net income to $374,738 and yield a 6.8% rate of return on the value of its infrastructure investment. However, the PSC currently considers a 6.4% rate of return adequate for water utilities.
Anderson doesn’t expect residents to be very happy about paying higher water rates but notes that Gillett’s rates are among the lowest in the area.
“We have to do the sewer and water work for the highway project. Water and sewer aren’t a luxury you can do without,” she said.
Anderson, who’s been clerk/treasurer since 2020, admits the village could have been better prepared financially for the costs associated with the Highway 22 project. However, the state kept changing the project’s start date, making it more difficult for the village to plan for it.
The village’s 300,000-gallon water tower on Finnegan Road will need repainting at some point, which has an estimated cost of $450,000. The village board has begun budgeting for that eventual expense, Anderson said.
The PSC will evaluate the water rate request and hold a public hearing in Gillett and Madison before it approves new rates, a process that typically takes several months.
