The state Public Service Commission disallowed about a half-million dollars in charges Oak Creek wanted to recover in a wholesale water sale to Franklin - - and that formula meant Oak Creek would be stuck with a whopping, unanticipated cost borne instead by its retail customers - - if it went ahead and signed a larger wholesale deal that would make Waukesha Oak Creek's largest wholesale customer.
One of the costs disallowed was for pumping equipment that the PSC said should be eaten by Oak Creek and not be billed to Franklin, reported Don Behm:
One wholesale charge that the PSC cut from Oak Creek's rate request was $230,613 to pay for the pumping capacity built in its system so Franklin would have plenty of water to fight fires.Hold that thought.
Waukesha had spent 18 months negotiating a 40-80-year deal with Oak Creek, and would need to spend $183 million to pipe the water in from Oak Creek.
But note that the $183 million figure, while substantial, was substantially less and more politically manageable for Waukesha to sell its ratepayers because its original estimate for the Oak Creek option was $261 million.
So here is a question?
Is it possible that the excess pumping being charged to Franklin, and disallowed by the PSC, was attributable to Oak Creek having beefed up its infrastructure to be able to show Waukesha on paper, and in negotiations, that it could handle the average 10.9 million gallons daily that Waukesha's Lake Michigan diversion plan says it would expect to be able to access?
Racine and Oak Creek in pre-negotiation letters of interest to consider a sale of Lake Michigan water to Waukesha made it clear that Waukesha was to bear the expansion of capacity of their infrastructure should a deal be reached. Oak Creek apparently decided to expand prior to any deal with Waukesha.
ReplyDeleteWould that mean Oak Creek was positioning itself to become a Lake Michigan pedeler in competition with Milwaukee?
Now take that one step further. Was the PSC decision designed to encourage Milwaukee, a city with tremendous excess capacity, to get serious about negotiations with Waukesha?
Any negotiated agreement between Milwaukee would meet such a political firestorm from either city's citizens that the elected officials would get cold feet.
ReplyDeleteThe Town of Waukesha would never agree to a Milwaukee deal.
Tick tick tick yawn.
The PSC and the SEWRPC are not on the same page. Milwaukee is clearly not interested in supplying water to the expanded Waukesha service area designated by SEWRPC, and the PSC just killed the deal with the only other viable vendor of Lake Michigan water.
ReplyDeleteThere will never be a Milwaukee-Waukesha deal because Waukesha officials are too stubborn to ask SEWRPC to redefine their service area. My guess is that Waukesha is going to renegotiate with Oak Creek and eventually have the deal get shot down by the GLC. By this time they will be out of options to satisfy the 2018 mandate and will need to ask for a extension.
Check this press release from Oak Creek Water Utility...
ReplyDeleteDecember 7, 2011
WATER & SEWER UTILITY SAVES RATEPAYERS $10 MILLION
Efficient use of technology generates more water treatment capacity
OAK CREEK–December 7, 2011–The Oak Creek Water & Sewer Utility announced today it saved ratepayers the equivalent of $10 million in capital improvement costs.
“We achieved the best of all worlds,” says Mike Sullivan, Utility Engineer. “We achieved additional water treatment capacity while exceeding water quality standards without adding cost to ratepayers.”
Through technology investments made during the last treatment plant expansion, which expanded daily water processing capacity to 28 million gallons, the Utility now can effectively treat 35 million gallons per day without additional infrastructure build out.
“The Utility’s pioneering spirit always has focused on investment in new technology to ensure the cleanest, safest, most reliable water possible flows to its customers,” Sullivan says. “During the planning process for the treatment plant expansion completed in 2010, we ensured technology investments were made to allow us flexibility in adjusting to evolving regulatory standards.”
The foresight and investment is paying off. When the DNR announced it would limit the amount of water drawn from Lake Michigan by communities, it meant limits would be set on the current capacity of a given water treatment plant.
With that announcement, the Utility saw the need to ensure ratepayers had access to as much water as possible before the DNR restrictions went into place. The Utility presented to the DNR a solution that would ensure ample water supply through 2040 without additional expense to ratepayers.... Click this link to read the rest... http://www.water.oak-creek.wi.us/wwwroot/Index/Media_Releases.html