Water Utility Financial Benchmarks


The Public Service Commission of Wisconsin calculates benchmark data for over 575 water utilities and sanitary districts. These benchmarks are derived from data included in the utilities' annual reports. The purpose of providing these benchmarks is to establish a maximum, minimum and weighted average for expense, revenue and pumping statistics. This will allow utilities to compare their numbers to statewide statistics. In addition to statewide benchmarks, the PSC provides benchmarks by utility class so that utilities can compare their statistics with those from utilities of similar size. PSC reporting groups water utilities and sanitary districts into class AB, C or D categories. These categories are defined by the number of customers served. Class AB utilities have 4,000 or more customers, Class C utilities have between 1,000 and 4,000 customers, and Class D utilities have fewer than 1,000 customers.

Items of Note:

• Benchmark reports can be exported to Microsoft Excel.

• Most annual reports are filed in March and April. During this timeframe, the benchmark reports will fluctuate daily as new reports are added to the database.

• These benchmarks may contain errors for individual companies, as utility annual report data is self-reported. While these errors leave averages realtively unaffected, they can distort greatly minimum and maximum values.

Statewide Benchmark: These benchmarks are grouped by utility class and water source (surface water, groundwater, or purchased water).

Individual Water Utility Benchmarks: The individual utility benchmarks appear in the far right-hand column of the report.

Benchmarks Definition

Revenues – Metered revenues in Account 461, Metered Sales to General Customers, and Account 464, Other Sales to Public Authorities, were used. The two benchmarks are revenues per customer and revenues per thousand gallons of water sold, reported by customer class. In addition, total operating revenues per full-time equivalent employee is reported in this category.

Expenses – For Class AB and C utilities, operation and maintenance expenses are segregated by functional group, as well as water source: self-supplied ground or surface water(Lake Winnebago utilities are reported separately), or purchased water. Benchmarks for Account 408, Taxes, are computed separately for water utilities and sanitary districts, because sanitary districts do not pay the local and school property tax equivalent. The four benchmarks are expenses relative to average plant investment, total operating revenues, gallons of water sold, and number of customers. The number of customers excludes public fire protection service to eliminate problems with duplication when this service is billed directly to customers. One additional expense benchmark is total operating expenses per full-time equivalent employee.

Mass Property Plant Accounts – For mains, services, meters and hydrants, the average cost for both plant additions and plant retirements is computed. Dollar amounts are taken from the Water Utility Plant in Service schedules for utility-financed and contributed plant, and units added and retired are taken from the related statistical schedules. The number of hydrants includes flushing hydrants.

Pumping Statistics – Benchmarks are computed for kilowatt hours of electricity used to operate pumps and for the percent of water loss that is unaccounted for.

Financial Ratios – Two benchmarks are computed, the first being the ratio of long-term debt compared to total capital structure at the end of the year. Total capital structure includes long term debt plus municipal earning equity. For utilities with no long-term debt or with negative municipal equity, the debt to equity ratio is not computed. The other statistic is rate of return on average net investment rate base.

Benchmark Depreciation Rates

Commission staff developed benchmark depreciation rates for municipal water utilities using a study of historical plant additions and retirements. A listing by account of depreciation rate ranges and a total utility composite rate range are contained in the Benchmark Depreciation Spreadsheet file. The final column in the Excel file contains the recommended depreciation rate for each plant account. A utility may furnish information to support alternative depreciation rates when it applies for a conventional rate case. At the time of the rate case, Commission staff will certify the depreciation rates.

 Benchmark Depreciation Spreadsheet

Water Utility Reference Manual

The PSC's Water Utility Reference Manual is designed to help utilities interpret the Uniform System of Accounts, prepare annual reports, and apply tariffed rates properly.

Water Utility Reference Manual

Reference Manual: Benchmark Retirement Costs for Small Water Utilities Without Property Records

Filing the PSC Annual Report​


Utilities use the PSC's web-based Water, Electric, Gas, and Sewer Annual Report System (WEGS ARS) to file their annual reports.

WEGS ARS Online Reporting System Login (for reporting year 2015 and later)​​

If you have any questions regarding the PSC Annual Report, please contact the help desk:

Water & Sewer: (608)267-2335 or

FAQs: Accounting

How should the utility account for the expense of restoring manholes or relining mains to extend their life?

If the utility treats manholes and mains as units of property:

The utility must treat mains as units of property. Mains could be retired at their original cost and replaced with the cost of the relining project. If the utility also considers manholes units of property, the utility could likewise retire the old manholes at original cost and replace them with the cost of the restoration project.

If the utility treats manholes as minor units of property:

Another viewpoint is that the utility is improving the manholes and not replacing them. If the utility does not consider manholes units of property, they could be treated as minor units of property. In this case, the dollars associated with the improvement to the manhole should be capitalized, and the remainder expensed. Improvements are discussed on page 47 of the Uniform System of Accounts for Municipally Owned Water Utilities under Utility Plant Instructions (9)(c)(3): “When a minor item of depreciable property is replaced independently of the retirement unit of which it is a part, the cost of replacement shall be charged to the maintenance account appropriate for the item, except that if the replacement effects a substantial improvement (the primary aim of which is to make the property affected more useful, more efficient, of greater durability, or of greater capacity), the excess cost of the replacement over the estimated cost at current prices of replacing without improvement shall be charged to the appropriate utility plant account.”

If the utility does not treat manholes as units of property:

The simplest solution is to amortize the expenditure over five to seven years. The utility must contact Commission staff to request any amortization of the project expenditures over the remaining life of the asset.

The utility has some choices depending on how its Continuing Property Records are set up. If a utility considers manholes a property unit, the utility can retire and replace its property units. If the asset is not a property unit, the utility may consider the asset a minor unit and capitalize a portion of the expenditure as a betterment, expensing the remaining dollars. The final alternative if the asset is not a unit of property is to expense and amortize the project. As in all large construction projects, for the utility to recover these expenditures in rates, it should include these costs in the revenue requirement of its next rate case.

How should a utility account for abandoned mains and services or parts and fittings for equipment no longer used by the utility?

“Used and Useful” is a concept used by regulators to determine whether an asset should be included in a utility's rate base. This concept requires that an asset currently provide, or be capable of providing, a needed service to customers.

When mains or services are abandoned they are no longer used or useful, so the unit of property should be retired from rate base. The utility should keep information on the location of these assets on its system maps to ensure that the utility can make good decisions in the future about constructing other plant in the street right-of-way.

The cost of parts and fittings in inventory but no longer useful to the utility (for instance, parts formerly used in repairing equipment the utility no longer uses) should be credited to inventory and debited to an expense account.

What is PSC's accounting policy regarding antenna rentals on water towers?

The money received for space leased for cell phone antennas on a water tower must be recorded as water utility revenue. The definition of Account 472, Rents from Water Property, of the Uniform System of Accounts (USOA) for Municipally Owned Water Utilities, states “This account shall include rents received for the use by others of land, buildings and other property devoted to water operations by the utility.” The general fund cannot charge the water utility rent or lease monies for the municipal land on which the water tower was placed or for any cell support building placed next to the tower in conjunction with the antennas of the water tower.

According to definitions in the USOA, Account 340, Land and Land Rights “...shall include the cost of land and land rights used in connection with transmission and distribution operations. (See utility plant instruction 6.)” Utility plant instruction 6, paragraph A, states “The accounts for land and land rights include the cost of land owned in fee by the utility and rights, interests, and privileges held by the utility in land owned by others, such as leaseholds, easements, water and water power rights, diversion rights, submersion rights, rights of way and other like interests in land.” Paragraph A indicates that, while land may be held in the name of the municipality, the utility has rights to the use of the land. Therefore, the land should be considered water utility land, not municipal land. Any general fund charge is not considered a valid water utility operating expense, and such expense would not be allowed in the revenue requirement within the context of a rate case.

How are water rates affected when a municipality collects impact fees to pay for public facilities needed to provide water service?

Municipalities may collect impact fees to pay for water public facilities in accordance with Wis. Stat. §66.0617. When facilities are paid for using impact fees, those facilities are not included in rate base. In this way, impact fees can serve to keep customer bills lower. Facilities paid for with impact fees are classified as contributed plant in the same manner as any other facilities that are paid for by developers are classified as contributed plant. However, municipalities should be aware that there is another potential consequence of using impact fees. It is the municipality’s responsibility to set impact fees at a dollar amount that results in funds that are sufficient to pay for facilities. For a number of reasons, a municipality may collect impact fee revenues that are insufficient. This occurance can be particularly problematic, as the facilities are recorded as contributed plant, so the utility cannot raise water rates to make up for impact fee study deficiencies. A municipality should evaluate carefully the growth that is reasonably expected to materialize before assuming public facilities will be paid for using impact fees.

A municipality may choose to pay for all or a portion of water facilities with impact fees. If a municipality plans in advance to pay for 25 percent of water public facilities with impact fees, the remaining 75 percent can be recovered through water utility rates so long as the investment is prudently incurred and receives construction authorization from the Commission. If a utility intends to use impact fees to help pay for a project, it should identify this source of fuding in its construction authorization application.