A state law preventing utilities from discriminating when setting water rates is hamstringing Milwaukee’s attempt to use Lake Michigan to attract businesses.
Milwaukee aldermen are floating a plan to cut rates for companies that use a lot of water if they create at least 25 jobs in the city. The city would use the lower rate as a selling point to attract water-reliant companies from areas in the country experiencing water shortages.
Lower rates alone will not be the golden tickets that bring companies to the city, said Alderman Michael Murphy, a sponsor of the water-rate plan. But, he said, the cut rate, combined with water quality and quantity, add another selling point.
“No one should make any grandiose ideas that this will be the only reason an industry will pick up and move to Wisconsin,” Murphy said.
But when drafting the ways in which businesses would be eligible for the lower rates, the city had to shed some ideas because of the state law regulating water prices.
Wisconsin and Alaska are the only states with statewide agencies, in this case the Public Service Commission of Wisconsin, setting water rates for publicly owned water utilities. The state policy has long stated utilities cannot set different rates for businesses if those businesses use the water in similar ways.
The city considered offering cheaper rates to companies moving into the Menomonee Valley Industrial Center or 30th Street Industrial Corridor, where city planners want to attract industrial employers, said Water Works Superintendent Carrie Lewis. But state regulations do not allow different rates based on such specific geographic areas, she said.
State regulations also prohibit Milwaukee from offering cheaper rates to companies moving to the city from far away, such as Texas, while offering higher rates to companies moving from nearby cities, such as West Allis.
The lower rate will not do much good for Milwaukee when offered to companies moving from, for example, a neighboring county, said Milwaukee Alderman Robert Donovan, who on Wednesday voted in favor of the plan based only on company water use and job creation. If the Common Council and mayor approve the plan, the city will seek PSC approval.
Officials at the PSC who helped the city draft the plan have responded positively to it, Lewis said. The only reason Milwaukee could set the special rate is because the water utility can produce more clean water than it can sell, she said.
The PSC is willing to consider this rate to attract new businesses because if Milwaukee sells more water and brings in more money, it could lead to lower rates for all users, Lewis said.