By Danielle Kaeding, Wisconsin Public Radio
This article was republished here with permission from Wisconsin Public Radio.
Situated on the shores of the largest body of freshwater in the world by surface area, you wouldn’t think there’d be a battle over water in Superior. But one is brewing over how that water gets to residents’ homes, or more specifically, who brings it there. For more than a century, it’s been piped in by a private company, Superior Water, Light & Power, now a division of Duluth-based Allete, and it’s the only privately owned water utility in Wisconsin.
Superior Mayor Jim Payne would like to change that.
Paine spoke with WPR’s Robin Washington on “Morning Edition” about the city’s potential acquisition of the utility, for which the city and Superior Water, Light & Power have presented differing cost estimates.
Washington also spoke with Bill Fennessy, a spokesman for the Superior Community Coalition, a residents’ group siding with the utility against the sale.“Not only do we have the only private water utility in Wisconsin, we have the most expensive water in Wisconsin. We have the most expensive water on Lake Superior. And that’s because this is the only place where Lake Superior water is sold at a profit,” he said.
The following interview has been edited for brevity and clarity.
Robin Washington: The city commissioned an independent study that said it would cost $58 million to take over the water utility. Can the city afford it? And would taxpayers be footing the bill?
Jim Paine: The city can absolutely afford it. In fact, we can’t afford not to. The public is paying that cost right now. We’re merely taking over the payments on the existing infrastructure. When we take over the payments, yes, we will have to take out a bond, which we can definitely afford to pay for. But our interest rate will be 3.5 to 4 percent, less than half what we are paying now.
RW: What’s a typical water bill right now, and what would it be after you took it over?
JP: There is no typical water rate in the state of Wisconsin. Everybody’s is different. What we do know is that cities like Ashland, like Wausau, like Waukesha, that have invested hundreds of millions of dollars into their infrastructure, all still have lower rates than the city of Superior. And we know it goes down after we take it over.
RW: Superior Water, Light & Power also commissioned a study, and they also depicted it as independent, which put the purchase price at about $137 million. They also cited startup costs at about $34 million and transaction costs at about $5 million. Are those estimates correct? And regardless, wouldn’t the company as the seller be able to set the price at whatever they wanted?
JP: This process is regulated by state statute. The Public Service Commission of Wisconsin sets the price, and state law determines the process by which they figure that price out. Our study is a true independent study, and it used the same process as the Public Service Commission.
RW: Couldn’t a study have been sponsored and paid for by both the company and the city to assure independence and fairness? And would you be willing to do one if they said, “OK, we’ll join with you?”
JP: Not only would I be willing to do that, that’s an actual part of the process. The Public Service Commission is the independent body that will provide the true and final number. What happens first is the people of Superior have to decide through a referendum.
RW: Is a referendum planned?
JP: The exact timing is up to the city council. That could be in November or the following April. But we’ll make sure it’s at a regular election so that there will be plenty of time for the public to learn about it.
Editor’s note; The position of Superior Water, Light and Power on the potential acquisition will be expressed in an upcoming story.
