The state agency that represents utility consumers says the water company that serves most Johnson County homes and businesses should be lowering its rate, not trying to raise it.
Greenwood-based Indiana American Water, which serves about 32,000 customers in Franklin, Greenwood, New Whiteland and several townships, asked the state utility regulatory commission to approve a rate hike that would increase the typical residential water bill by $5.60 per month once it is fully implemented in two years, the company announced in September.
But the Indiana Office of Utility Consumer Counselor is recommending that the commission deny the $38.8 million rate increase, a 17.5 percent hike that could hit home and business owners next July. Based on their research, rates should actually be lowered about 7.6 percent, the OUCC said.
Eight OUCC witnesses filed testimony and exhibits with the commission last week. The OUCC, which represents consumer interests in cases before the commission, spent the last three months analyzing the utility company’s request, the agency said in a news release.
The agency had two major concerns with Indiana American’s request:
The water company’s return on investment should be lower than what it is requesting, according to the news release.
And the costs of the utility’s proposed capital projects are unreasonable, the news release said.
Indiana American said the increase is needed to support hundreds of millions of dollars worth of capital projects. Johnson County projects include $14 million to replace or relocate water mains and hydrants, $4.2 million to install new meters and service lines and $15 million to improve pumping, treatment, storage and operations facilities, the company said.
The company also wants to spend $45 million to demolish and rebuild a water treatment plant in Richmond, but the OUCC said the plant can be renovated for about $10 million. Improvements to a Muncie treatment plant should cost about $5 million less than the company is proposing, the OUCC said.
The state agency argued that the utility did not provide enough detailed information to support the costs of those projects, according to the news release.
"While the OUCC supports the need for utilities to replace aging infrastructure, utilities must provide sufficient evidence justifying the proposed costs before charging them to customers," the news release said.
Water bills just went down earlier this year due to the Federal Tax Cuts and Jobs Act of 2017.
A typical Johnson County household now pays, on average, about $35 per month for water, down from $36.63 in July. If this rate hike is approved, the average water bill would jump to $37.60 in July 2019, and to more than $40 the following year.
By law, the public has a say in the rate hike, which is where the OUCC comes in. The Indiana Utility Regulatory Commission is required to do a comprehensive review of the request, take public input and conduct a public hearing, which is scheduled for Feb. 14, before it makes a decision, which commissioners have 300 days to make.
