The Oak Creek Water and Sewer Utility says it's "willing to continue talks with Waukesha" about providing Lake Michigan water, but only if it can achieve fair cost sharing for its existing customers first.
The utility released a statement Tuesday morning regarding the Public Service Commission's decision that shifted costs-of-service from Franklin to Oak Creek and results in a subsidy by Oak Creek of about $366,375, according to Utility General Manager Steve Yttri.
If the decision stands, the average quarterly increase for Oak Creek would be $17.06, compared to an $8.14 increase for Franklin.
Oak Creek is fighting the PSC's ruling, Yttri said, but doesn't know when its appeal will be heard.
The PSC decision came one day after the Oak Creek and Waukesha common councils approved a letter of intent to move forward on a contract for Lake Michigan water.
The ruling creates "a financial disincentive for Oak Creek to provide service to another wholesale customer," the utility said in the statement.
Yttri said in an interview that while the Waukesha contract and Franklin cost-sharing are two separate issues, "they're intertwined because the Franklin situation sends a signal about how the PSC is going to judge wholesale service." The PSC has to approve the Waukesha-Oak Creek contract.
The PSC, for its part, has said it disagrees with Oak Creek's view of the ruling.
"The (PSC) commission believes that its modified decision allocates costs appropriately between retail and wholesale customers. Franklin is paying the correct amount, and Oak Creek is not subsidizing Franklin," according to Kristin Ruesch, PSC communications director.
Waukesha spent about a year and a half negotiating with Racine and Oak Creek for Lake Michigan water due to radium levels that put the city's water supply out of legal compliance. That forced Waukesha to either treat or replace its water supply by 2018. The city's wells also face problems with declining water quality due to arsenic and saltwater and with a limited groundwater supply.
The timeframe for Waukesha to replace its water supply is tight, and the city still must receive approval from Great Lakes states.
It's not clear what impact the PSC's ruling and subsequent delay will have on Waukesha's quest for Lake Michigan water. The city spent more than a year and a half in negotiations with Racine and Oak Creek.
Oak Creek favored the sale because it could generate revenue and lead to a 25 percent drop in residents' water bills, officials said.