New studies approved by the Cadott board in July 2024: EPS Engineering will be conducting another study of the electric system and Ehlers, Inc., will be used for an electric rate case study. Costs found from these studies are still to be determined.
A June 2023 study for the Village of Cadott by EPS Engineering indicated it would cost $7.45 million to bring the Cadott electric system’s power capacity to acceptable industry and safety standards. Another $250,000 is required to replace the meters.
If the two systems were approved to combine, Chippewa Valley Electric Cooperative (CVEC) would carry it out over several years, prioritizing areas most at risk of failing. Availability of the needed equipment, often subject to supply chain issues, would be a limiting factor.
A rate design study would inform the rate impact for Cadott electric customers. Any proposed rate path must be approved by the Public Service Commission of Wisconsin (PSCW). Previous CVEC estimates showed:
For Cadott electric customers:
- The rate impact for Cadott to go it alone on making the electric system investment is projected to be high – a more than 40 percent increase per household over the next several years.
- If the preliminary agreement to combine with CVEC is approved by the Cadott board, PSCW and voters, it is estimated that the rate impact would be up to less than half of Cadott going it alone and applied incrementally as the project progresses.
For CVEC members:
- There will be no rate impact as a result of approval of the preliminary agreement. CVEC member rates will not be used to subsidize the investment in Cadott’s electric system.
- The savings come from CVEC being able to leverage its economies of scale in operations and the ability to use its own crews to do most of the electric system upgrade work (rather than hiring outside contractors).
Two factors have come together to make this an urgent matter:
- Cadott’s electric system has reached a tipping point in capacity — growth in Cadott customers is at the point where the electric system has exceeded its designed capacity with some areas of the system operating at 120 percent of rated capacity.
- Aging equipment threatens the system’s reliability – electric equipment is difficult to secure on a timely basis – up to two years for a modern transformer. It is a nearly impossible task to find spare parts that match Cadott’s voltage. This leaves Cadott electric customers unacceptably vulnerable to sustained power outages.
Among many reasons:
- Cadott has engaged CVEC since 2017 to maintain and operate its electric system.
- CVEC is a known and trusted partner that has long proven its dedication to serving Cadott.
- CVEC is a not-for-profit, cost-of-service electric power provider completely focused on service to its members.
- The service territories of Cadott and CVEC are next to each other and interconnect in places. The systems could be backup resources for each other, benefiting both Cadott electric customers and CVEC members.
- Preliminary analysis shows combining Cadott’s electric system with CVEC’s would allow this required investment in Cadott’s electric system to occur in the near term with a much lower rate impact on Cadott electric customers.
As a not-for-profit, cost-of-service electric service provider, the Cooperative is committed to strategies that help gain long-term rate stability for its members. Combining electrical systems with the Village of Cadott and welcoming Cadott electric customers as members helps in that, together, fixed costs are shared by more consumers.