Waukesha, Oak Creek Resolve Water Deal Hangup

Waukesha will move forward on a water deal with Oak Creek after language was changed in a letter of intent that satisfies some of Oak Creek's concerns about compensation.

The water deal was delayed following an Oct. 3 ruling by the Public Service Commission (PSC), the regulating body for utilities in Wisconsin. The ruling, on a separate issue between Oak Creek and Franklin, led to Oak Creek halting talks with Waukesha out of fear it would not recover its costs.

However, changes to the letter of intent states that "the agreement shall provide for a wholesale water rate, approved by the PSC, to allow Oak Creek, at its discretion to fully recover its total cost (not marginal costs) to provide wholesale water to its wholesale customers."

The Waukesha Common Council unanimously approved the change during its meeting Tuesday, effectively allowing the two communities to move forward. Oak Creek already has approved the changes, Waukesha City Administrator Ed Henschel said.

"Oak Creek and Franklin have resolved this matter, but Oak Creek has requested a change to the letter of intent with Waukesha," Henschel said in a memo to the Common Council.

Waukesha is planning a $183 million pipeline to Oak Creek to address problems with its declining water quality and water supply.

Waukesha spent a year and a half in negotiations with Oak Creek and Racine over getting Lake Michigan water. Waukesha still faces a long climb to get Lake Michigan water, including approval from all Great Lakes states. 

Waukesha is forced to either treat or replace its water supply by 2018 because radium levels have put the city's water supply out of legal compliance. The city's wells also face problems with declining water quality due to arsenic and saltwater and with a limited groundwater supply.