(1) WHEN PERMITTED. The commission may grant a rate increase to a municipally owned water or a municipally owned combined water and sewer public utility without a hearing if all of the following conditions are met: (a) The revenue increase is calculated by multiplying the utility’s prior year’s revenues from sales of utility service by the rate increase factor under sub. (2). (b) The revenue increase under par. (a), combined with the prior year’s net operating income, either results in an overall rate of return that does not exceed the rate of return determined by the commission under sub. (3) or results in an amount that does not exceed 6 percent of the utility’s prior year’s total operation and maintenance expenses. (c) The utility will increase its rates for general service, wholesale service and public fire protection uniformly for all utility customers by the rate increase factor determined by the commission under sub. (2), unless the commission determines that the utility has good cause for not meeting the condition under this paragraph. (d) The effective date of the rate increase is not less than 12 months from the effective date of an increase previously filed under this section nor less than 45 days from the date on which the application was filed. (e) If the utility’s rates in effect prior to the rate increase under this section were authorized pursuant to a hearing under s. 196.20, the rates have been in effect for a calendar year. (f) The commission has not rejected the application for good cause. (g) If the utility has 4,000 or more customers, the effective date of the rate increase is not more than 5 years from the effective date of an increase authorized pursuant to a hearing under s. 196.20. (h) If the utility has less than 4,000 customers, the total of all prior rate increases granted since the last hearing under s. 196.20 does not result in rates that are more than 40 percent higher than the base rates previously authorized by a hearing under s. 196.20. (2) DETERMINATION OF THE RATE INCREASE FACTOR. Not later than March 1 annually, the commission shall set an increase factor to apply to rates of municipally owned water public utilities or municipally owned combined water and sewer public utilities. The factor shall be equal to the U.S. consumer price index for all urban consumers, U.S. city average, for the previous year; however, the factor may not be less than 3 percent nor more than 10 percent. The rate increase factor need not be defined by rule. (3) DETERMINATION OF AN OVERALL RATE OF RETURN. Not later than March 1 annually, the commission shall set the overall rate of return to be applicable to municipally owned water public utilities or municipally owned combined water and sewer public utilities for rate increases under this section. The commission shall consider the interest rates for state and local bonds in setting the overall rate of return. The overall rate of return need not be defined by rule. (4) NOTICE REQUIREMENTS. A utility seeking an increase in rates under this section shall notify all customers, upon a form approved by the commission, by newspaper publication or by mail. The utility shall include a copy of the issued notice in its filing of an application under this section. The notice shall include all of the following: (a) The anticipated date of filing of the rate increase application and the anticipated effective date of the rate increase. (b) The impact on customer bills resulting from the rate increase calculated for at least 5 different usage levels, including an average residential usage level. (c) A statement that the increase is being proposed under this section and that no hearing is required. (d) Other information required by the commission to be included in a notice under this subsection.
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