The purchase price is only part of the bill
A respected national firm that regularly conducts utility valuations estimates the final cost of a city takeover of the water utility at $186 million.[1] Here is how that total breaks down.
The cost to “go get the price”
$2 million estimated
Getting a price requires lawyers, consultants, and a valuation proceeding in front of the Public Service Commission. Superior taxpayers will foot the bill for all of it. This money will be gone, even if the City ultimately decides not to buy the utility.
Despite promises from the proponents, there is no guarantee that any of these costs could be recovered in future water rates.
The purchase price
$146 million estimated
This is the estimated fair market value. It includes the assets and the additional value of an established business, called going-concern value. WI law requires a vote before this price is set by the PSC, so the two studies conducted so far both provide estimates.
The City’s estimate is $58 million, which is still nearly twice Superior’s annual city budget. More on that below.
The City's study only estimates this part, and puts it at just $58 million.
Additional takeover costs
$38 million estimated
The City is trying to take over part of an integrated water, electric and gas utility. This startup municipal utility would need to separate shared systems, prepare its own utility to operate, and arrange financing.
These costs include duplicating equipment, inventory, operating systems, reserves, and funding for the first four years of capital improvements.
All in, that is an estimated
$186 million.
That is an initial cost estimate in end-of-2030 dollars. It is not the lifetime cost of ownership. Ongoing operations and long-term interest payments are separate.
SEE THE DETAILED BREAKDOWN BELOW
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$2.0 million in legal and consulting expenses.
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$136.7 million in asset value plus $9.7 million in going-concern value, totaling $146.4 million.
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$1.4 million for separation, $33.9 million for startup, and $2.7 million in financing fees, totaling $38.0 million.
Why the City’s $58 Million estimate is incomplete and unrealistic
The City commissioned an appraisal that estimates the water-system assets at about $58 million, compared to the $146 million estimate from Concentric Energy Advisors. At the contested proceeding before the Public Service Commission of Wisconsin, each side would present their case for their respective valuations, and the PSC would examine the data and ultimately set the price. The PSC has no required method for setting the price, and claims by the City that their appraisal is the preferred approach or carries more weight have been explicitly challenged by the former Chair of the PSCW.
But it’s still worth asking why these numbers are so far apart.
A few key differences in the methodology and assumptions that make it clear the total cost will be far higher than $58 million:
Initially, both studies came up with roughly the same number for the water utility assets—the pipes, the pumps and treatment plant. But then the city’s study applied a 38% discount to get the value down to where it is.
City’s study appraises asset value at the end of 2025. It does not account for inflation or other investments into the system that will occur before the contested hearing is scheduled and the PSC sets the price. By the time Superior votes in 2027, this appraisal will already be two years out of date. By contrast, Concentric estimated the purchase price in 2030 dollars and accounted for ongoing planned investments and inflation.[1]
The $58 million appraisal simply does not address any estimate for legal, consulting, separation, startup, and financing costs, all of which will be on top of any price set by the PSC. They state it clearly:
“Regulatory and Transaction Complexity. The acquisition of a privately owned, PSC-regulated utility by a municipality involves a complex regulatory and legal process. PSC approval is required, and the transaction timeline, conditions of approval, and final purchase price may be subject to negotiation and regulatory proceedings. Legal, engineering, and financial advisory costs associated with the transaction could be substantial. These transaction costs are not included in the financial projections presented in this memo.”
What that would mean for water bills
Superior residents have to pay for this one way or another – through higher taxes, higher water bills or both. If the PSC set a bargain basement price for the utility, maybe the City’s promises would come true. But it is far more likely Superior residents will pay more, and they will be paying it for generations. [1]
Below you can experiment with different purchase prices and interest rates to see what it would mean the total cost.
How would the City pay?
The Council resolution that accompanies this ballot measure permits financing through general obligation bonds or revenue bonds, or both. While the City is promising to only pay back all that debt through our future water utility bills, it’s also possible some of it will be covered with taxpayer dollars.
The bottom line is that Superior residents and businesses will be paying this debt back one way or another.
Explore the borrowing costs
Change the acquisition price, additional expenses, and financing assumptions to see how they affect the amount financed and estimated annual debt payments.
Choose a preset or build your own
How to read this: the Raftelis preset shows the assumptions included in its published financial projection: a $58 million purchase-price assumption and a 30-year revenue bond at 4.50%. Raftelis separately states that legal, engineering and financial advisory costs could be substantial and are not included in those financial projections. The Concentric preset includes its additional going-concern, separation, startup and transaction-cost estimates. The annual-payment figure is a simplified level-payment illustration using the displayed total, a 30-year term and the selected interest rate; it is not a water-rate forecast or a prediction of PSC just compensation.
Calculator note: This is a borrowing illustration, not a forecast of your water bill. It does not calculate ongoing operating costs. A single interest rate simplifies financing that could involve different bonds and rates.
City appraisal scenario note: The $58 million is an appraisal input, not a complete takeover budget. Costs not included in the City’s projections are noted above. Raftelis states that they may be “substantial”.
[1] Concentric Energy Advisors, June 24, 2026, valuation discussion and financial analysis; City appraisal and rate analysis cited in that report. Acquisition comparison includes going concern on the national firm side. Link both underlying studies beside the comparison. Financing language follows the Council resolution; link adopted resolution.