Whitehall looks to raise electric rates

The Whitehall city council gave official approval to seek a raise in its electrical rates following a presentation that showed it would otherwise operate at a net loss in the future. 

What the new rates end up being and when the hike will happen is yet to be decided, but the council heard that without an adjustment it could see a net operating loss of about $284,125 next year. That’s the figure Adam Dikeman of WPPI Energy gave the council during a presentation at last week Tuesday’s regular monthly meeting.

Dikeman recommended an average rate increase of 9.24 percent, though he said the Public Service Commission will likely lower that number when it reviews the application. Should the proposed rate be accepted, the average residential customer would see an average increase of about $11.85 on their monthly bills. 

The timing of the increase is still in question. While the council approved submitting its intent to increase the rates to the Wisconsin Public Service Commission (PSC) last week, Dikeman said the PSC has taken an average of 275 days to review such requests. 

“It might be a while before any of these rates come into effect,” Dikeman said. 

Dikeman said the PSC changes the proposed rates “every time” they review an application and the actual increase will “most likely” be less than what was proposed last week.

“They really look at utility wages and benefits to make sure what we’re paying is in line with what they think we should be paying,” Karen Witte, city clerk, said. 

The city hasn’t raised its electrical rates since 2017, Dikeman said inflation has risen 31 percent in aggregate since then. 

“Even with this nine percent increase, you’re still doing way better than the overall cost of living,” Dikeman said. 

Dikeman told the council that even with the increase, city residents would be paying less than they would with Xcel Energy. He added that Xcel is planning increases in 2026 and 2027, which would increase the gap. 

In other matters, the council approved moving forward with developing plans to add an improved HVAC system in the water treatment plant, though it could alter or remove the addition in the future.

The council heard from representatives from engineering firm Short Elliott Hendrickson, who said the current HVAC system isn’t keeping up and, since the council is already remodeling the plant, it could consider upgrades. While a scientific study hadn’t been done on the plant, Jeff Nussbaum and Isaac Steinmeyer told the council they believed the chemicals in the plant were causing corrosion on metal parts. 

“We didn’t have HVAC improvements in our scope of design or our project estimate cost, but it is clearly a problem with equipment getting destroyed,” Nussbaum told the council.

While a study could be done, the engineers told the council that they were running short on time. The HVAC upgrades would have to be included in plans submitted to the Wisconsin Department of Natural Resources as part of the Safe Drinking Water Loan program application, which is due June 30.

“If we want it as part of the project, we don’t have a lot of time,” Nussbaum said. 

The SEH engineers estimated that including the HVAC upgrades would add an additional $350,000 to $400,000 to the total project. However, they did include some cushion in the initial estimates so the amount the city requested from the DNR, $2.8 million, would be the same. 

Council members indicated they weren’t happy with such a large expense being dropped on them with so little time to consider it.

“Why didn’t we plan on it,” council member Bob Sendelbach asked. “It sounds like something we should have planned on with a plant like ours. I would’ve preferred more time to think about it.” 

Nussbaum said the plant has an HVAC system so they didn’t consider that when they created the original scope. It wasn’t until they were physically inside of the plant that they realized there were issues with chemicals. He added that there may also be safety issues with city employees breathing the chemicals in. 

“It sounds like it may be a safety concern, which is more important than the cost,” Sendelbach said, adding he couldn’t think of a reason not to include HVAC upgrades. 

Their recommendation was to only do a portion of the plant, but council members asked that an HVAC system for the entire plant be included with options to reduce the scope of that portion of the project. Bidding for the entire project won’t be done until after the city finds out if it is awarded a Safe Drinking Water Loan. 

Another representative from SEH, Brea Grace, told the council it appeared the city would get 40 percent principal forgiveness if it is awarded the loan and the interest rate for the loan currently looks like it would be around 1.386 over 20 years. She said Whitehall is considered a “disadvantaged community” because the median income is lower than the state average. 

As part of the loan application, the council approved a proposal to provide a water rate study, which will be submitted with the loan to show the city has enough revenue to pay for the loan. 

In another matter, the council approved an agreement for fire protection services with the town of Lincoln. The city fire department has covered Lincoln for many years, but the two municipalities never previously had a written agreement. 

The council approved a pay request from RJ Jurowski Construction for work done on the slide at the city pool. The total cost for the project was $7,000 less than estimated.