2019 Rate Changes
Delivering security, comfort and quality of life
Who we are
Superior Water, Light and Power Co. (SWL&P), a wholly owned subsidiary of ALLETE Inc., delivers reliable electricity, natural gas and water to customers in Superior, Wisconsin, and adjacent areas. We have served the city of Superior and surrounding areas in northwestern Wisconsin since 1889 and provide security, comfort and quality of life to 15,000 electric customers, 13,000 natural gas customers and 10,000 water customers. We do not provide sanitary sewer or trash removal services, and we do not receive any income from property taxes.
By purchasing electricity at wholesale prices, we are able to combine reliable service with rates that are among the lowest in Wisconsin and competitive nationally. Having connections to two interstate pipelines also provides for competitive rates and enhanced reliability for our natural gas system. Our state-of-the-art water treatment system draws water from Lake Superior, provides high-quality water to customers and has the capacity to serve large industrial water users.
Why we requested rate adjustments
For our customers, we know there’s no right time for a rate increase. But we think we’re on the right track in building a safe and reliable energy and water future for Superior — and this rate adjustment will support those efforts. We’ve made investments to strengthen the safety and reliability of the energy and water systems, and added new tools for you to manage your energy and water use. Unlike most other businesses, we need regulatory approval to adjust rates, so we asked the independent Public Service Commission of Wisconsin (PSCW) to review our request. Any rate adjustment must be approved by the PSCW—SWL&P cannot adjust its rates without the independent commission’s approval. On Nov. 29, the PSCW reduced our initial request of $2.4 million per year to about $1.3 million after a required audit and public input.
The rate adjustment will support upgrades to our delivery systems that will improve safety, reliability and service quality for customers. We need to constantly invest in our delivery systems to maintain and improve reliable service, and the cost of these investments rises as costs for material and labor increase. Some of the investments covered in the proposed rate adjustment are:
- Replacing two miles of 100-year-old water mains under Belknap Street.
- Gas system upgrades, including new pipes with a 300-year lifespan, within areas of Superior to improve safety, efficiency and leak detection
- Replacing switchgear at the Winter Street substation that is 50 years old and has exceeded its useful life. A failure at the substation caused an outage in September 2015 that affected 4,200 customers for five hours.
- A water overflow project at our water treatment plant to protect the safety and quality of our customers’ water.
- Continued installation of Advanced Metering Infrastructure, or smart meters, that allow customers to track their energy and water use and also improve the safety of our systems and allow us to detect outages quickly. All of our electric customers now have these meters, and all water and natural gas customers will have them by the end of 2020.
How would the rate adjustments affect my bill?
The average residential customer would see an increase of about $7 per month total on bills for electricity, natural gas and water. All residential customers would see an expected increase of $5-$14 per month for all three services, depending on their usage levels. While these increases were verbally approved during the open meeting on Nov. 29, final rates will not go into effect until the final order is received at some point in December.
How do customers benefit?
We think of our company as delivering security, comfort and quality of life. That means when we do our job, our customers’ lights are on, their homes are warm and their water is safe all day, every day. The services we deliver are essential to our modern quality of life and contribute to public safety and health. We invest in our water system to prevent problems such as those experienced in other parts of the country, where entire cities could not use tap water due to harmful contaminants. When we upgrade our gas system, such as removing low-pressure zones, we are able to identify and detect leaks more quickly to prevent catastrophic events. All of our investments are aimed at maintaining and improving the level of service and safety our customers have come to expect for the past 129 years.
How can customers offset the rate adjustments?
The easiest way to offset any increase under the rate adjustments is to conserve energy and water. A convenient way to accomplish this is to sign up for MyAccount at the SWL&P website. MyAccount allows customers with AMI meters to track their energy and water use in real time. Customers who do not yet have AMI meters can view their monthly use. Tracking your use can help spot any problems or offer ideas for conservation. For instance, a leaking toilet can cost up to $20 per month, and will show up on MyAccount if you track your water use.
Customers also can request a free Home Energy Assessment through Focus on Energy, a nonprofit organization that partners with Wisconsin utilities to help customers conserve energy. Contact us at 715-394-2200 to schedule your free home energy assessment. Focus on Energy also offers free energy-saving products and other incentives, such as $75 toward qualifying smart thermostats that can save up to $120 annually in heating costs.
If you are having trouble paying your bill, please contact us at 715-394-2200. You may be eligible for home heating and weatherization assistance.
Did the Husky refinery incident affect the rate adjustment
Yes. While our rate adjustment request was largely complete before the April 26, 2018, Husky incident and was largely the result of important infrastructure improvements, the information we have available says that Husky will not be using the same amount of water in 2019 while the refinery is offline, and rates are set on assumed system usage. While the Husky refinery is offline we are obligated to maintain our water system, which must be available to serve the entire system including the expected restart of operations at Husky. For the protection of customers, all water sales sold to Husky Energy over what was approved by the PSCW will be tracked, and reported to the PSCW for potential refunds or adjustments in SWL&P’s next rate filing that the PSCW mandated will be in two years. SWL&P will not profit on sales above what the PSCW approved. The Husky event does not have any effect on adjustments to electric or natural gas rates. Husky and all large customers help maximize economies of scale for operating utility systems and help keep costs affordable for all customers.
More information about rates
What is a rate case?
As a regulated utility, we file a rate case request when the costs of providing safe and reliable electricity, natural gas, or water are different (higher or lower) than what customers are paying in rates. Normally in the state of Wisconsin this process is done every two years.
Rates are set through a transparent process with the Public Service Commission of Wisconsin (PSCW), the body that regulates investor-owned utilities in the state, and the proceedings include opportunities for public input and participation along the way.
Utilities are required to provide a detailed forecast of how they would structure operations and make investments. The Commission then reviews the information, with public input from customers, business groups, cities, agencies, and other special interest organizations before making a decision.
Why are Superior Water Light & Power’s water rates high?
There are many reasons why utility rates differ between companies. SWL&P is the only privately held water utility in Wisconsin. This distinction makes it difficult to compare us to other water utilities in the state. Customer mix, differences in how operations are structured, water source, treatment processes, and the age of water system are just some of the items that can differ among utilities.
There are certain expenses that municipal water utilities are able to categorize outside of water rates that helps keep their rates lower. In essence, they have the ability to share expenses for services they provide. For instance, when a privately held utility replaces a water main under a road, the cost of fixing that road is also part of water rates. Municipal utilities may have the ability to consider the cost to fix the road part of their road maintenance budget and exclude that expense as part of water rates.
There are also distinct differences in the way privately held water utilities and municipal water utilities account for things. There are different tax considerations and shareholder return expectations. Municipal utilities also have the ability to apply for grants to cover certain projects. Privately held utilities do not have that ability.
Why wasn’t the Winter Street Substation project done when the large outage happened in 2015?
Any time SWL&P does a large project, upgrade, or rebuild, it requires approval from the PSCW. As a regulated utility, we cannot just invest in projects without going through a detailed review and approval process. This accountability is in place to ensure utilities are not just investing in projects that aren’t necessary.
Ideally SWL&P would correct problems of this nature immediately. However, the substation had to be redesigned to ensure long term reliability. Once redesigned, the project including timeline, scope and costs had to be filed with the PSCW for approval. Approval for that project was granted in August of 2018 and we expect the project to be complete in 2019.
Why are rates increasing due to replacing infrastructure as part of the Belknap project?
The water mains we’ve replaced under Belknap Street as part of the Belknap reconstruction project were over 100 years old. Any time the city takes on projects to replace streets and other utilities; SWL&P analyzes the age and condition of the pipes under the street as well as repair history of the pipes to determine the need of replacing aging infrastructure. When water mains are under roads, especially major highways, it can be a large coordination project to detour traffic in order to dig up the road to either maintain or replace water mains. Therefore, we try to coordinate with other projects when replacing large mains. SWL&P would never want to dig up Belknap Street to repair an old water main when the concrete is brand new. The new mains under Belknap Street are anticipated to last another 100+ years which is good news for our customers.
What is the purpose of the customer charge? Is it just to cover the expenses of having a meter at your house?
The customer charge is not just a meter charge and is not associated with meter maintenance. The customer charge is in place to cover some of the fixed costs associated with having and maintaining the entire electric, gas and water system. Examples of these costs include the wires and poles that transfer electricity across the system, the gas lines delivering gas to your homes and the water treatment plant ensuring you always have clean water available from your tap. These services are critical in providing security, comfort and quality of life. SWL&P has an obligation to serve you, our customers and the fixed portion of your bill, or the customer charge, is there regardless of how much electricity, gas or water you use. SWL&P did not propose any changes to the customer charges associated with residential customer bills in this filing.
Why does it require four or more people to install a hydrant?
When it comes to the maintenance and care of the electric, gas or water systems of SWL&P, our number one concern on any project is safety. Safety is a value that cannot and will not be questioned. When crews are out working on installation or maintenance of our systems it requires a certain number of employees to ensure safety of each and every site. From installing fire hydrants or valves, digging up and replacing water and gas mains, to installing or maintaining the electrical system, the employees involved are each there to ensure the site, the public, and employees working at the site are safe. In addition to safety, it is important to note that crew sizes are also determined based on the size or severity of a project. Many projects (across all three utilities) result in some form of a shutdown or outage of your services. With a proper crew size, SWL&P can ensure that our customers are returned to service and have the shortest outage possible. There can also be situations where it seems extra people are on a jobsite due to new employees being trained, engineers or supervisors being onsite for various reasons, or other inspections being performed.
What does the Water Fire Protection monthly charge to the Village of Superior cover?
The total monthly charge for the Village public fire protection service is based on costs not only of direct facilities, such as fire hydrants, but also the allocated share of costs for the extra capacity designed into the water system for fire flow capacity, including wells, pumps, water treatment plant, transmission and distribution mains, storage, and other facilities. The monthly rate to the Village of Superior includes all quantities of water for the purpose of extinguishing fires within the service area. For all other purposes, additional metered rates apply.
What is Superior Water Light & Power doing to cut costs for customers?
SWL&P is continuously reviewing processes and procedures for new, safer, more efficient, and less expensive ways to do business. Our business is changing and as it does we evaluate every job and every open position to ensure we have the right amount of people doing the right work. We also evaluate every project to ensure it’s the right project at the right time.
What can I do if I have additional questions on the rate filing?
Please contact us. Customers can email questions to email@example.com. We will ensure the right person responds to each question received.