01-1678 City of Madison v. Public Utilities Commission of Wisconsin

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“The basis for the PSC decision is that the proposed rate increase would be used to benefit a select group of customers by providing a subsidy for the replacement of the privately-owned lead laterals, which those customers are responsible for maintaining and repairing. The PSC’s decision reflects its consideration of the issue of lead reduction and potential penalties for noncompliance with federal regulations. However, it is undisputed that a portion of the lead causing the City’s compliance problem is from the laterals of customers who own them and have the responsibility of maintaining them. Thus, it is reasonable for the PSC to view the surcharge as subsidizing a direct benefit to a select group of customers. It is also reasonable for the PSC to view the City’s decision to require property owners with lead laterals to replace them as a decision made by local government for the benefit of the public at large, carrying with it the responsibility of the local government to provide for any subsidy it considers to be in the public’s interest.

“The PSC’s decision does not prevent the City of Madison from choosing the replacement program as the better alternative. Rather, it prevents the City from using the utility rates to fund the subsidy. It may be that all utility customers will benefit from the surcharge in the sense that the result will be in compliance with the EPA levels without the adverse effects of chemical treatment.

“But all utility customers will receive that same benefit if the customers who own the lead laterals pay for their replacement, or if the City funds a subsidy in some other way.

“Accordingly, we reverse the order of the circuit court and direct that it enter an order affirming the PSC’s decision denying the City’s application for a rate increase.”

Recommended for publication in the official reports.

Dist IV, Dane County, Ebert, J., Vergeront, P.J.

Attorneys:

For Appellant: Steven A. Levine, Madison

For Respondent: James M. Voss, Madison