Utility Conservation Programs

FAQs: Conservation and Efficiency

What can Wisconsin utilities do to achieve conservation and efficiency savings?

Each Wisconsin water utility is required to implement basic water conservation and efficiency measures, including metering all water sales, conducting routine meter testing, monitoring losses and leaks in the distribution system, and collecting and reporting water audit information to the PSC. These requirements can be found in Chapter PSC 185, Wis. Admin. Code. In addition, Chapter PSC 184, Wis. Admin. Code., requires any utility seeking authority to construct new supply facilities provide additional information in their application for a PSC approval of their construction project. This additional information includes a description of measures the utility has taken to mitigate the need for the project, as well as an alternatives analysis. Both of these elements can potentially be addressed through conservation and efficiency measures. Please see New Water Supply Construction Authorization Requirements for additional information on these requirements.

Water utilities often provide additional leadership and funding for community conservation efforts, which can include demand side measures such as water fixture rebates, incentive programs, education and outreach, customer water audits, restrictions on lawn watering, and water rates that encourage water efficient behavior. Water conservation programs also include supply side measures such as non-revenue water control. Successful water conservation programs combine both demand side and supply side efforts and are integrated into utilities' planning for future supply sources. Because each utility is unique, there is no single approach to water conservation that is appropriate for all. In 2011, the PSC and DNR commissioned a study to identify cost effective ways for Wisconsin utilities to achieve conservation savings:

How does a utility receive PSC approval for rebate and incentive programs?

The PSC does not require water utilities to implement demand management programs.  Utilities wishing to implement voluntary demand management programs through rebates and incentives must obtain PSC approval before spending funds on these efforts.  The PSC reviews the utility’s proposed water conservation programs to ensure that any expenditures are cost-effective, reasonable, and in the public interest. The PSC allows utilities to spend about one to two percent of total operating revenues on water conservation programs.

A utility interested in implementing a water conservation program can request funding for conservation efforts as part of their application for a rate increase.

Alternatively, a utility may submit a letter requesting that the PSC approve its water conservation program outside of a rate case.  A utility may use existing funding for these programs, or in some cases, the Commission may allow the utility to defer program costs for recovery in a future rate case.  In either case, the utility must submit a water conservation plan that describes the proposed water conservation measures and demonstrates that the proposed measures are cost-effective and reasonable. PSC approval is not required for conservation programs funded entirely through wastewater rates or other municipal funds.

The PSC has developed additional materials to assist utilities in planning or evaluating their conservation programs.

PSC Water Conservation Report Template for Utilities

PSC Guidance on Toilet Rebate and Other Incentive Programs

PSC Water Conservation Accounting Guidance for Water Utilities (Supplement to USOA/Reference Manual)

PSC Water Bill Frequency Analysis Template version 3.0

What if my utility is interested in adopting conservation rates?

Utilities that plan to adopt conservation-oriented rate structures can do so when filing an application for a complete rate case. In some cases, a utility will need to provide more detailed billing system data to assist PSC staff in designing an appropriate rate structure.

For information on designing rates that achieve both conservation and revenue sufficiency objectives, visit the following websites:

  • Alliance for Water Efficiency - Financing Sustainable Water

  • University of North Carolina Environmental Finance Center - Water and Sewer Rates Analysis Model
  • Which Wisconsin utilities currently have conservation programs in place?

    Utilities with Conservation Rates for Residential Customers

    Utilities with Rebate Programs

    Drinking water utilities that use ratepayer dollars to pay for rebate and incentive and other conservation programs are required to report their activities each year on page W27 of their annual financial report.