Published: November 17, 2009 09:39 pm      

Deal or no deal: OUCC looks to limit proposed increase by Indiana American Water Co.

A technical evidentiary hearing for Indiana American Water Co.’s proposed rate increase is less than a month away. The hearing — scheduled for Dec. 15 in Indianapolis — will allow for a cross examination of the parties involved to determine what amount will be approved, if any.

However, it may still be some time after Dec. 15 before residents will know if their bills will be going up.

No final order will be made at the conclusion of the evidentiary hearing, said Anthony Swinger, director of external affairs for Indiana’s Office of Utility Consumer Counselor. The hearing itself has the possibility of lasting several days, and when it is over, additional filings can be made, Swinger said. A final order is expected in the first half of 2010.

That final order will determine if the amount Indiana American originally requested to impose locally for customers — an increase of 38 percent — in water rates will be approved. The OUCC has recommended a limit to the proposed increase of 14 percent, according to a press release. “Our staff has worked diligently and thoroughly in reviewing Indiana American Water’s request since early May,” said OUCC Counselor David Stippler, in a news release. “We do not believe the full rate increase requested by Indiana American Water is justified.

“However, we do recognize the fact that [the company] has made numerous efforts to modernize its infrastructure and improve the safety and reliability of its systems throughout the state.”

The rate originally requested would have increased Indiana American’s annual revenues by about $47 million. The OUCC proposed increase would boost annual revenues by about $23 million. The local impact is substantial, as the subsidiary of New Jersey-based American Water Inc. provides service to about 283,000 residential, commercial and industrial customers throughout the state, according to the OUCC. Also, many smaller water suppliers in the area purchase water from Indiana American.

Based on a usage rate of about 5,200 gallons per month and Indiana America’s original request, the monthly bill for Clarksville, Jeffersonville and New Albany residents would increase from $29.58 to $40.84. Annually, an average customer would owe an extra $135.12 for their water bills.

If the OUCC’s proposed limit increase was implemented, annual water bills would still go up, but by $49.68.

Three field hearings were held in connection with the proposed increases to allow for public comment. The last of the hearings was held in Jeffersonville on Oct. 26.

December’s evidentiary hearing will be open to the public, but comments are generally not accepted at the meetings.



Indiana American Water Co.’s original rate request

• Current rate — $29.58

• Proposed increase — $40.84 (38 percent)

• Difference monthly — $11.26

• Difference annually — $135.12

* Based on about 5,200-gallon-per-month usage



OUCC’s recommended rate increase

• Current rate — $29.58

• Proposed increase — $33.72 (14 percent)

• Difference monthly — $4.14

• Difference annually — $49.68