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Rochester water rate study points to reduction of planned increase

Rochester's Public Utility Board is slated to review a new water rate study, which estimates how much revenue is required to cover service costs.

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Rochester Public Utilities
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ROCHESTER — The Rochester Public Utility Board will review the latest water rate study Tuesday.

The study, which is conducted every three years, is designed to help the city-owned utility set rates so revenue covers the cost of providing service.

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Planned city budget relies on nearly $92.8 million in property taxes, which is a 6.85% increase compared to this year.

The study estimates the 2023 cost of service at $12.35 million, with the expectation of collecting $11.76 million, if the rates were unchanged.

With the study in hand, utility board is expected to lower annual rate increases from the 6.5% increase proposed last year to an annual 5% for the next five years to cover anticipated costs.

The proposed 5% adjustment is expected to add 74 cents to the average residential customer’s monthly water bill for 2023.

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According to the materials provided to the board, residential and commercial water bills are lower in Rochester when compared to many communities in the region.

Using information provided by Owatonna Public Utilities, the RPU report shows the average residential water bill is between $160 and $200 a year, which is below bills reported in Faribault, Owatonna, Austin, New Prague, Red Wing and Mankato.

Among the cities compared, the average annual residential water expense is $323 for a household.

A comparison of the same cities reportedly shows the average commercial water bill is $688 a year, with Rochester reporting the second-lowest annual charge at slightly more than $400. Faribault saw commercial water bills average less than $400.

In addition to reviewing the proposed water rate adjustment for next year, the Rochester Public Utility Board is slated to review next year’s proposed electric rate.

A 2.5% rate increase is recommended, which would produce an approximately $2.27 monthly increase for the average residential customer.

The rate recommendation is based on a 2020 electric rate study.

The board will meet at 4 p.m. Tuesday in the RPU community room at 400 East River Road NE in Rochester.

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Upcoming meetings

Meetings scheduled to be held during the week of Sept. 26 include:

Rochester

  • Public Utility Board, 4 p.m. Tuesday in the Rochester Public Utilities community room, 4000 East River Road NE.
  • Heritage Preservation Commission, 5 p.m. Tuesday in council chambers of the Government Center, 151 Fourth St. SE.
  • Planning and Zoning Commission, 6 p.m. Wednesday in council chambers of the Government Center.

Olmsted County

  • Rochester-Olmsted Council of Governments, noon Wednesday in conference room A at 2122 Campus Drive SE in Rochester.
Randy Petersen joined the Post Bulletin in 2014 and became the local government reporter in 2017. An Elkton native, he's worked for a variety of Midwest papers as reporter, photographer and editor since graduating from Winona State University in 1996. Readers can reach Randy at 507-285-7709 or rpetersen@postbulletin.com.
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