Indiana American Water rate increase approved

Contributed By:The 411 News

Two-step rate hike for customers starts July 1; next in May 2020

A settlement agreement among the Indiana Office of Utility Consumer Counselor (OUCC), Indiana American Water Co. (IAWC), and all additional parties in the utility’s rate case received the Indiana Utility Regulatory Commission’s (IURC’s) approval this week.

The rate increases approved by the IURC will be implemented in two steps. Water customers will see the first increase of 1.99 percent effective July 1, 2019, and a second increase in May 2020 of 5.79 percent.

The impact for most of the company’s residential customers using 4,000 gallons of water each month would be about 34 cents per month after step 1 goes into effect and an additional $2.22 per month when the second step is implemented.

The approved agreement will allow for an overall annual revenue increase of $17.5 million. IAWC had sought a $38.8 million increase when filing the rate case in September 2018.

“The Commission’s order brings a fair resolution to this case,” said Indiana Utility Consumer Counselor Bill Fine. “The increase under the approved agreement is significantly lower than what IAWC had requested. More importantly, the agreement provides an appropriate balance between aging infrastructure improvements and fair rates to cover those costs, to help ensure the reliable delivery of clean water to the utility’s customers throughout the state.”

“We appreciate the cooperation of the Office of Utility Consumer Counselor and other interested parties in this proceeding to work toward and reach a negotiated settlement in this case,” said Indiana American Water President Matt Prine.

During the period covered by the rate request, the utility said it had invested more than $542 million in its water systems across the state.

The order also approved a low-income pilot program in Muncie, Gary, and Terre Haute to evaluate the effectiveness, interest and impact of the program before considering a statewide program.

Under the program, qualified residential customers with a 5/8” meter in the pilot communities will receive a discount of 80 percent of the fixed 5/8” meter charge every month.

The IURC also issued a final order dealing with the impacts of the Tax Cuts and Jobs Act (TCJA) of 2017. That act reduced the amount of taxes the utility owed, allowing it to keep more of its revenues. To pay its taxes, public utilities like Indiana Water, have passed on those tax costs to customers in their monthly bills.

The order provides a one-time refund reflecting the amount collected in revenues after the TCJA was implemented, but before rates were changed, to be distributed to customers over a twelve-month period starting in May 2020.

The refund for the typical residential customer will total approximately $19.26, or approximately $1.60 per month for one year. Indiana American Water said it had already reduced its rates by 4.4 percent on August 1, 2018 as a result of the impact of the TCJA.

Settling parties in addition to the OUCC and IAWC include the Citizens Action Coalition of Indiana, the Indiana Community Action Association, industrial customers (Arcelor Mittal USA, Fiat Chrysler Automobiles, and Praxair, Inc.), municipal governments (Crown Point, Schererville, and Whiteland), and Sullivan-Vigo Water Corporation.

Story Posted:06/28/2019

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