CR 17-055 Rule Analysis

The proposed rule updates the meter accuracy requirements to cover all types of utility meters and allows any meter to be used to measure water so long as it meets the accuracy requirements. The proposed rule also allows a utility, in lieu of periodic testing, to adopt a new meter replacement program that results in each meter being replaced within 20 years of the original date of installation if the utility has data to demonstrate that the meters remain accurate for the 20-year period.

The proposed rule revises conservation requirements to eliminate percentage benchmarks and instead require a water audit be conducted and used to establish utility goals to reduce

non-revenue water. The proposed rule also eliminates duplication with administrative rules established by the DNR related to flushing and pressure.

Finally, the proposed rule updates and clarifies the rules related to utility and customer responsibilities during winter conditions and freezing. The proposed rule includes definitions of the facilities for which the utility and customer are responsible, responsibilities for thawing and, if applicable, providing an alternative source of water, identification of the source of the freezing and annual customer notices, information to be included on notices when a utility requests that a customer run water to prevent freezing and a method for calculating the credits for the water run.

E. Comparison with Existing or Proposed Federal Legislation

Rates and service rules for water public utilities are the exclusive jurisdiction of the States. There are no existing or proposed federal regulations pertaining to water quantity or water conservation that affect water public utilities. However, water public utilities must comply with regulations promulgated under the federal Safe Drinking Water Act, which may include conditions or restrictions on system design and construction to protect public health and ensure safe drinking water. The Great Lakes Compact, an interstate compact ratified by the U.S. Congress, applies to water public utilities that withdraw surface or groundwater from the Lake Michigan and Lake Superior watersheds.

F. Comparison with Similar Rules in Surrounding States

All eight Great Lakes States (New York, Pennsylvania, Ohio, Indiana, Illinois, Wisconsin, Michigan, and Minnesota) are party to the Great Lakes Compact, which requires each state to do all of the following:

1. Adopt a mandatory or voluntary water conservation program.

2. Regulate withdrawals from the Great Lakes watershed, both groundwater and surface water.

3. Prohibit the diversion of water from the Great Lakes watershed, with some limited exceptions.

Specifically, the Great Lakes Compact required each state to implement a water conservation and efficiency program by December 2010, including state-specific water conservation and efficiency goals and objectives and either voluntary or mandatory conservation requirements for water users. The DNR has adopted administrative rules to implement the Compact in chs. NR 850, NR 852, NR 856, and NR 860.

Because water utility regulation is a state matter, each state regulates its water public utilities differently. The commission has the most comprehensive jurisdiction over both municipal and privately-owned water utilities in the upper Great Lakes region. State commission jurisdiction in the surrounding states varies from partial regulation of regional and privately- owned systems to a completely deregulated water industry. Some of the surrounding states have enacted more comprehensive water conservation programs than Wisconsin. The requirements in the surrounding states are described below.

Minnesota

Neither municipal nor investor-owned water utilities are subject to Minnesota Public Utilities Commission oversight. Instead, rates and charges are subject to the oversight of the local municipal or regional governing body. Nonetheless, Minnesota statutes require each water utility serving more than 1,000 people to adopt a water rate structure that promotes conservation, including seasonal rates, time of use rates, water budget rates, excess use rates, or inclining block rates. Public water utilities must update their plan and, upon notification, submit it to the Minnesota Department of Natural Resources for approval every ten years. Water utilities are also required to provide educational information about water conservation to their customers. The Minnesota Department of Natural Resources also recommends that utilities meter all customer usage and conduct a water audit, and implement a leak detection and repair program if unaccounted for water is greater than 10 percent of water pumped.

Illinois

The Illinois Commerce Commission (ICC) regulates investor-owned utilities, including 33 water, 5 sewer, and 14 combined water and sewer utilities. Illinois has administrative rules governing applications for service, deposits, billing requirements, payment plans, irregular billing, refunds and credits and disconnections. However, municipally-owned utilities are not regulated by the ICC. Communities that are served by Lake Michigan, including the City of Chicago and many suburbs, are subject to special requirements known as the Lake Michigan Water Allocation Program, which authorizes the Illinois Department of Natural Resources to manage the allocation of water among regional organizations and municipalities. These requirements include water conservation as a condition of their allocation permit and are intended to fulfill the state's requirement under a U.S. Supreme Court Decree. The requirements include metering for all new construction and remodeling; reducing unaccounted-for water to less than 8 percent of annual water pumped; establishing ordinances for water-saving fixtures; adopting water rate structures based on metered usage and which discourage excessive use; and restricting non-essential outdoor usage.

Iowa

The Iowa Utilities Board regulates investor-owned water utilities, but not municipally-owned water utilities. Iowa has administrative rules governing utility records, tariffs, metering, meter reading, extensions of service, customer information, deposits, inaccurate billing, disconnection of service, customer complaints and meter testing. In addition, the Iowa Department of Natural Resources may, in any permit granted to a community public water supply, include conditions requiring water conservation practices and require emergency conservation practices after notification by the Department. Generally, water conservation practices are not required, although individual permits may have conservation requirements added to them by the state.

Michigan

The Michigan Public Service Commission does not regulate water utility rates and charges. Michigan does not have other water conservation requirements for public water utilities outside of its responsibilities under the Great Lakes Compact.

Indiana

The Indiana Utility Regulatory Commission (lURC) regulates the rates, terms, and conditions of service for both municipal- and investor-owned water and wastewater utilities. However, all municipal utilities and investor-owned wastewater utilities serving fewer than 300 customers can opt out of IURC regulation. Indiana has administrative rules governing records retention, metering, meter testing, meter accuracy, billing, billing inaccuracies, deposits, disconnection, reconnection, customer information, rate schedules and extensions. Indiana does not have other water conservation requirements for public water utilities outside of its responsibilities under the Great Lakes Compact.

G. Effect on Small Business

This rule will not affect small businesses. The Wis. Stat. § 227.114(1) definition of “small business” states that to be considered a small business, the business must not be dominant in its field. The vast majority of water and combined water and sewer utilities are publicly owned and are not small businesses. Further, since water utilities and combined water and sewer utilities are monopolies in their service territories, they are dominant in their fields.

H. Comments

Comments on this rule may be submitted as outlined in the Notice of Hearing.

I. Accommodation

The commission does not discriminate on the basis of disability in the provision of programs, services, or employment. Any person with a disability who needs accommodations to participate in this proceeding or who needs to obtain this document in a different format should contact the docket coordinator listed below.

J. Agency Contact People

Questions regarding this rule should be directed to docket coordinator, David Prochaska, at [phone] or [e-mail]. Small Business questions should be directed to the small business regulatory coordinator, Kristy Nieto at [phone] or [e-mail]. Media questions should be directed to the Communications Director, Elise Nelson, at [phone] or [e-mail]. Hearing or speech- impaired individuals using TTY may call these numbers via Wisconsin Telecommunications Relay Service (WTRS) by dialing 711 and requesting to call one of these agency staff contact numbers.

FISCAL ESTIMATE AND ECONOMIC IMPACT ANALYSIS

A completed Fiscal Estimated and Economic Impact Analysis are included as Attachment C.