Illinois American Water files rate increase request

 

From Illinois Business Journal news services

BELLEVILLE — Illinois American Water has filed an application with the Illinois Commerce Commission to increase rates effective January 2017 for water and sewer service in all of the company’s operating districts, the first base rate change sought from the ICC since one approved in 2012.

The company’s investments in water and sewer system improvements are the primary driver behind this rate request. From Oct. 1, 2013, to Dec. 31, 2017, Illinois American Water will have invested approximately $342 million in water and sewer infrastructure statewide. This includes more than $88 million in the Interurban (Metro East) District not reflected in current water rates.

“We will continue to make the necessary investments in our local water system to help ensure water quality, service reliability and fire protection for our customers,” said Grant Evitts, senior operations manager of field services and production for the Interurban District.

Evitts said the over $88 million in investments includes replacing and installing fire hydrants, valves, meters and more than 45 miles of water main. The investment also includes significant electrical upgrades at the East St. Louis Water Treatment Plant for new control valves, a new 2.25-megawatt generator and updated power distribution switchgear to ensure reliability. Critical electrical and SCADA monitoring systems will also be upgraded. Overhead electrical lines distributing power to remote parts of the plant will be replaced with underground lines to ensure safety and reliability.

At both the East St. Louis and Granite City water treatment plants, the raw water intake piping systems were upgraded to ensure reliability. A new 1 million gallon elevated storage tank in East St. Louis will provide storage and enhanced water pressure to customers. In addition, a new raw water pretreatment facility is being constructed to remove sand and other heavy debris from the river water. This will enhance the operational efficiency of the treatment process and reduce wear and tear on mechanical equipment.

All of these improvements to the water treatment and delivery systems enhance service quality, reliability, environmental performance, public health and fire protection for customers.

If the rate request is granted in full, the typical residential Interurban District water customer (using about 4,500 gallons of water per month with a 5/8 inch meter) would see their water bill increase by about $7.57 per month from approximately $41.57 to $49.14 (excludes fire protection charges, taxes and franchise fees, which may vary by community). The rate change request represents an additional quarter a day to support needed investments.

There is no immediate impact to customers. Rates will not change until January 2017, after the ICC completes a comprehensive review of the request. The 11-month process includes opportunities for public comment. Over four years will have passed since Illinois American Water’s last rate increase in 2012.

“The communities we serve rely on us to provide reliable, quality water service to support the local economy and to provide a high quality of life for residents,” said Illinois American Water President Bruce Hauk. “These investments will help ensure we are able to keep that commitment to the health and prosperity of our customers and communities in Illinois.”

Hauk added that the company has reduced its operating expenses by about 3 percent since its last rate order.

The need to upgrade water and sewer systems is a national challenge. The American Society of Civil Engineers says that an estimated $1 trillion in capital spending will be needed across the nation over the next 25 years to replace thousands of miles of pipe, upgrade treatment plants and comply with stricter water quality standards.

Illinois American Water’s rates are based on the costs of providing water and sewer service as reviewed and approved by the ICC. The company works to control operating expenses while balancing the need for regular investment in the water system. While many municipally-owned water systems are able to cover costs with taxes, fees and other revenue sources as a way to keep water bills lower, investor-owned, regulated water utilities are required to recover all costs through water rates charged on the customer’s water bill.

About Illinois American Water

Illinois American Water, a wholly owned subsidiary of American Water (NYSE: AWK), is the largest investor-owned water utility in the state, providing water and/or wastewater services to approximately 1.2 million people. American Water also operates a customer service center in Alton and a quality control and research laboratory in Belleville.

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