NEW ULM — New Ulm residents will see their utility bills increase by an average of $17 per month in 2024.

This comes as the Public Utilities Commission approved a rate increase for the 2024 PUC budget at a special meeting Tuesday morning. The commission was free to choose from three options.

Option one was the lowest, only increasing utility bills by 2% or $74 a year through Electric and Water meter charge increases of $2 per meter. Option two would increase utility bills by 4.4% or $165 a year through meter charge increases of $3 per meter and a usage rate increase of one-quarter of a penny more per kilowatt used. Option three would increase utility bills by 5.5% or an average of $204 a year. This option was identical to option two, except the usage rate would increase to one-half of a penny more per kilowatt used.

Utilities Director Kris Manderfeld made the case for option three. Though they would like to keep pricing down as much as possible, she said public utilities are struggling with increased costs.

“We all are having increased costs, everybody’s feeling it,” Manderfeld said. “We’re trying to be as conservative as we can with raising rates but the utility is also feeling it. For example, transformers we purchased for $3,000 A few years ago are going for 15 to $20,000 now.”

Stretched over 12 months, Manderfeld said it would average out to a $17 a month increase. She said this increase would hopefully still be affordable for most people. Manderfeld said there are future projects the commission needs to keep in mind as well in terms of funding.

“We brought before you the wastewater infrastructure improvement plan,” she said. “We had identified several [electric and wastewater] projects needing to be done through the IGA funds. Unfortunately they along with 87 other utility projects didn’t get funding. Those projects still need to be done. There are significant capital things coming up in the future we have to be mindful of and start planning for.”

PUC administrator Beth Kral said New Ulm’s utilities have been falling behind. The Consumer Price Index, which tracks the average price of goods and services for the average consumer, has increased 18% in the last year. Kral said they were not keeping up with this change, and the effects have been detrimental to public utilities.

Manderfeld said she compared the proposed rate increases with what similarly sized communities are doing. In her analysis, she said everyone is in the same boat as New Ulm when it comes to price increases. To not fall behind, Manderfeld said option three made the most sense.

PUC member Mary Ellen Schanus made the motion and Kim Williams the second to select option three for utility rate increases. The commission only had a quorum of members, with Shannon Hillesheim and Seth Visser absent from the meeting. The remaining members of Schanus, Williams, and Sean Fingland unanimously approved the selection.