Indiana American Water files rate request

WEST LAFAYETTE, Ind. -– Indiana American Water today filed an application with the Indiana Utility Regulatory Commission (IURC) requesting a $9.43 per month increase in rates for a typical residential customer.

Indiana American Water’s ongoing infrastructure investments, rising expenses related to water treatment and delivery systems, and increased operating costs are the main drivers behind today’s rate request.

The company’s request would increase the typical monthly residential water bill in the West Lafayette District, using 6,000 gallons per month, by 31 cents per day, keeping the costs of water service for most local households at about a penny per gallon.

The company will have invested approximately $198 million statewide to enhance its water infrastructure between January 1, 2007 and June 30, 2009. All these investments in local water infrastructure systems enhance water quality, service reliability and fire protection for customers.

Many communities across the country are facing a challenge of deteriorating water and wastewater infrastructure and associated rate hikes. The United States EPA says the nation’s water and wastewater utilities will need to make more than $335 billion in infrastructure investments over the next 20 years to replace thousands of miles of pipe and for upgrades to treatment plants, storage tanks and other assets to ensure public health.

Indiana American Water’s strategy is to make prudent infrastructure investments, which is more cost-effective in the long run and reduces the risk of major service and water quality issues. Much of this rate request is driven by Indiana American Water’s investments to maintain and upgrade infrastructure and ensure that drinking water service meets all quality standards.

According to West Lafayette Operations Superintendent Chris Johnsen, Indiana American Water has invested nearly $38 million in the West Lafayette District’s local infrastructure during the last 2 ½ years. The local capital improvements are numerous and include investing nearly $35 million to greatly enhance water quality by removing iron and manganese through new treatment processes at the district’s new and existing facilities. The project includes construction of a new treatment facility at Davis Ferry Road and 9th Street and adding filtration and upgrading the existing Happy Hollow treatment facility. Other investments include nearly $1.7 million to replace or relocate water mains, nearly $1 million to install new meters and service lines, as well as improvements to water pumping and storage facilities.

No rates will change until the IURC completes a comprehensive review of the request and determines it is reasonable and justified. The regulatory process normally takes about a year to complete. If approved as requested, the typical residential bill would increase by 42.55 percent. The company last filed for new rates in December 2006 and received an order from the IURC on October 10, 2007.

Indiana American Water’s rates are based on the true costs of providing water service, as reviewed by the IURC. The company works hard to operate efficiently and control operating expenses. The company’s goal is to balance that objective with the continuous need for significant capital investment to meet increasing state and federal requirements and customer needs.

Many expenses to provide water service, most notably production expenses such as chemicals used in the water treatment process, have far out-paced the rate of inflation.

Following today’s filing, a comprehensive review process by the IURC is the next step in the rate-making process. Public hearings and opportunities for public comment are part of the process, under the direction of the IURC.

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2 Responses to “Indiana American Water files rate request”

  1. Ric Subowski says:

    The author in the byline “Staff Reports, Lafayette Online News” actually seems to work for Indiana American Water or took words verbatim out of their press release. It was surprising that midway through the story it gets to the main point: a whopping 42% rate increase. On the positive side, removing metals like iron and manganese would be much needed benefits a long time coming, if true.

    • admin says:

      We do not work for Indiana American Water; however, like nearly all news outlets, we use press releases to generate the news that we publish.

      In some cases, our reprint agreements with certain wire services prohibit us from altering the copy as it is provided.

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