MADISON, WI (WTAQ) - The state Public Service Commission has approved a 4.78% rate increase for Kaukauna Utilities.

Kaukauna Utilities is constructing a new hydro plant to replace two outdated dams. The company applied for a total rate increase of 8.8%, or approximately $5.4 million. Instead, the rate increase approved Friday is worth about $2.9 million.

However, the PSC only approved the lower amount until more information is known about the impact the Badger Hydro plant will have on Kaukauna's costs.    

According to the PSC news release, the Commission's vote to cut back the utility's original request was possible thanks to decisions to decrease the utility's rate of return, decrease allowable operating expenses, and to incorporate projected decreases in wholesale purchased power expenses.