Finance director presents proposed electric and water rate increases at RF CC

By Andrew Harrington
Posted 7/3/24

After a presentation from Finance Director Josh Solinger, River Falls City Council approved electric and water rate case applications to the Public Service Commission on June 25.

According to …

This item is available in full to subscribers.

Please log in to continue

Log in

Finance director presents proposed electric and water rate increases at RF CC


After a presentation from Finance Director Josh Solinger, River Falls City Council approved electric and water rate case applications to the Public Service Commission on June 25.

According to city documents, the aggregate electric rate increase is 6.01% and aggregate water rate increase is 51.43%. The proposed residential increases would be 7.39% for electric, 9.18% for electric Time Of Day and 25.8% for water. Electric utility rates in River Falls were last increased in 2020 and water was last increased in 2016.

Solinger said the rate application process is three steps: determining the revenue requirement of the utility to achieve the benchmark rate of return set by the Public Service Commission, a cost of service study that determines revenues by “customer category” and rate design to recover costs and no more or less.

The rate-driven revenue required to reach the benchmark set by the Public Service Commission is about $17.2 million for electricity, which is 6.01% higher than the current rate.

Solinger said the rate of return under the proposed rate would be 6.5%, which is higher than the 6.2% benchmark set by the Public Service Commission.

“A rate of return is the PSC’s estimate of how much net operating income a utility needs to operate and invest in its infrastructure,” city documents state.

“It’s very much sort of a negotiated process,” Solinger said. “We do believe that ultimately the Public Service Commission will have us come down to that 6.2% rate of return, but if you start high, you’ll end up coming down lower.”

A strong rate of return helps the city with its bond rating.

The water utility rate-driven revenue required to meet the benchmark is $2.88 million, a 51.43% increase from current rates. As for the rate of return, it checks in at 4.5%, which is below the 6.2% benchmark.

“The rate changes being proposed by the city to the PSC are intended to bring the water utility closer to the PSC’s current benchmark rate of return but minimize the impact of rate increases to customers,” city documents state.

Solinger said based on average residential usage, electric utility customers would see about a $7-9 or 7-9% increase from current monthly bills. Where the increase falls in the range depends on the Power Cost Adjustment Charge, which fluctuates based on the cost incurred to buy wholesale power that is provided to customers, according to Solinger.

Average residential water bills will see an increase of about $6 or 34% to monthly bills.

“When you see a percent change, that doesn’t mean every single customer is going to see that,” Solinger said. “It still depends on individual usage and things like that.”

According to a chart from the city, prior to the proposal, River Falls has the lowest annual residential water bill of similar utilities in the state, and after the proposal, River Falls would remain in the bottom third.

“We aim to provide value for quality, reliability and service, we’re not just necessarily aiming to be the cheapest utility,” Solinger said. “Things like 99+% electric reliability, our average downtime exceeds industry average, so we do get to outages faster than the industry average, water meets or exceeds all state and federal standards.”

Solinger said the Public Service Commission is responsible for protecting ratepayers and ensuring the submitted application is responsible and equitable. The Public Service Commission can make changes to the proposal after the council’s approval and they make an effective date.

“Final rates are ultimately determined by the PSC,” Solinger said.

Public comment

Former River Falls Sustainability Coordinator Mike Noreen spoke during public comment at city council for the second meeting in a row, encouraging the follow through on solar projects that were approved in the 2024-28 Capital Improvement Plan.

The projects outlined in the plan are a $200,000 expense for solar panels on the roof at City Hall in 2024, supplying about 30% of its needs, and $350,000 at the library in 2025, supplying about 50% of its needs.

In the plan, the justification for both projects cited the hailstorm of 2022 bringing a need for a new roof, and that it is an “ideal” time to install the panels.

“Adding solar fits into the core values of the city, will reduce utility bills, will demonstrate us leading by example, will have significant environmental benefits and we'll be able to utilize IRA funding,” the plan states.

Noreen said River Falls has been a leader in sustainability, but “to think that we are that far ahead of other communities would be a mistake.”

“With the City Hall, we have a new roof, which I know makes people nervous to put solar on, but that is what best practices are,” Noreen said. “You could put solar on without roof penetrations.”

Noreen said there are other options for solar if the council is against it, including car ports or “pavilion options” in the front or sides of City Hall.

Lance Hovland also discussed sustainability during the public comment period, stressing the importance of adopting a Climate Action Plan.

“The city, its people and the surrounding community, have done a tremendous job in taking on a leadership role in sustainability,” Hovland said. “However, much of this work is being done by various nonprofits in the area and is lacking cohesion with the city.”

Hovland said a plan would allow the city to focus their sustainability efforts and secure funding from the state.

Another community member asked the city to consider writing a separate job description for a city forester separate from the sustainability coordinator position. Noreen previously served as both the forester and sustainability coordinator. They also encouraged the reinstatement of the Tree Advisory Committee.
Dana Linscott discussed the city’s yard waste site, asking for it to be moved to property near the dog park and said he is willing to assist.

“The current city yard waste site is, by the city’s own definition, a public nuisance and health hazard,” Linscott said. “It violates federal, state and city laws, during heavy rains, it dumps liquid nutrients into the Kinni and when compost is ground twice a year, biotoxins are spread to the residential neighborhoods surrounding it.”

Linscott said he has not found another municipal compost site in Wisconsin or Minnesota located in a residential area.
“Anticipating a negligence lawsuit, the council met in closed session in 2021 on the compost site,” Linscott said. “The state licensing authority has repeatedly warned the city that the compost site can spread dangerous toxins to surrounding neighborhoods, and the testing done by the city confirms that it has.”

Patricia La Rue, former chair of the park board and member of the Plan Commission, returned to City Hall after speaking at a previous Plan Commission meeting. La Rue shared about the projects that were done during her time on the board. While La Rue was not originally reappointed by the mayor, she asked Mayor Dan Toland to reconsider an appointment due to vacancies on the Plan Commission and park board.

Tonya Schmitt encouraged the city to continue the Powerful Choices Program to keep educating residents on energy efficiency and sustainability.

Other business

  • Approved a general development plan for Sisu River Falls, a 66-unit multi-family development and addition to a storage facility located south of Cemetery Road and East of Wasson Lane. Resident Cecil Bjork raised concerns about the project during public comment including mentions of a lack of public input and a lack of meeting criteria for its zone.
  • Bjork said during public comment that the proposed ordinance that would amend the membership of the Plan Commission to not require a member to be the chair of the Park and Recreation Advisory Board is in violation of state statutes. The ordinance would instead include an additional citizen member. City Attorney Chris Gierhart said he has not seen anything in the proposal that would violate state statutes and that he would take another close look. The ordinance was in its first reading at the June 25 meeting.
  • Approved Troy Connolly as the interim city forester. Noreen endorsed Connolly during the public comment portion of the meeting. City Administrator Scot Simpson said the sustainability coordinator position is expected to be filled in the next 90-180 days.
  • Extended TID #5 by a year to use resulting revenue for affordable housing and to improve the city’s housing stock. The extension brings an estimated $495,000 to the Housing Reserve Fund, according to city documents.
  • Approved the 2024-25 Merchant McIntyre Associates Agreement, extending their partnership with the city.
  • Approved the 2023 Compliance Maintenance Annual Report.
  • Approved renewals of Class “A” liquor and beer licenses for Aldi, Dollar General, Family Fresh Market and Holiday. Approved Class “B” beer license and Class “C” wine license renewals for the River Falls Baseball Council. Approved Class “B” liquor and Class “B” beer license renewals for Burrito X.Com, Patty’s Pub & Boxty House and Tarnation Tavern. Granted a Class “A” liquor and Class “A” beer license to Ptacek’s Family Market.
  • Approved the final plat and rezoning of the Mann Valley Corporate Park.
  • Extended the River Falls Days noise control and open container exemptions on July 11 to 10:30 p.m. to accommodate for the laser light show.
  • Approved Tattersall’s Retail Outlet to extend to both River Falls Days and Bacon Bash in Heritage Park.
River Falls City Council, Public Service Commission, electric utility rates, water rates, River Falls, Wisconsin