The water utility that serves the majority of Johnson County households and businesses is asking for a rate increase.
Indiana American Water, based in Greenwood, is asking the state utility regulatory commission to approve a rate hike that will increase the typical residential water bill by $5.60 per month once it is fully implemented in about two years, according to a news release from the company.
In total, monthly bills for the typical household using 4,000 gallons of water per month will increase 16 percent by July 2020 over what customers were paying on Aug. 1, the company said.
The water utility serves nearly 31,774 customers in Franklin, Greenwood, New Whiteland and several townships, covering a population of about 86,000 people. About 91 percent of the customers are households, Indiana American spokesman Joe Loughmiller said. The town of Whiteland purchases its water from Indiana American but operates its own water utility, and such communities could seek to pass their increased costs on to customers if the rate increase is approved.
How much businesses and non-residential customers will pay if the increase is approved depends on how much water they use per month.
If you’re an Indiana American customer, you may have noticed that your water bill recently went down. The rates just dropped by 4.4 percent on Aug. 1 due to the federal Tax Cuts and Jobs Act of 2017, the company said. Households might have noticed the drop of about $1.65 per month.
The typical household now pays an average monthly water bill of $34.98, which includes Indiana American’s base rate and an amount based on the volume that customer has used. Some communities have added a fire protection surcharge to the bills as well, Loughmiller said, but that is not included in the company’s average bill example.
If approved, the typical household bill would go up to $37.60 in July 2019, and then to $40.58 in July 2020.
The last rate hike, about 2.55 percent, was in January 2015. At that time, the typical residential bills increased about 26 cents per month. As part of that increase, Indiana American agreed not to seek a rate hike again for three years.
Indiana American said it needs to increase water bills because of the company’s ongoing infrastructure projects, and outlined more than $542 million in projects as part of its request.
“The investments are necessary to maintain and enhance service, water quality, system reliability and fire protection capabilities for customers while keeping the cost of water service for most households their most affordable utility bill, at about a penny per gallon,” the company said in a news release.
In Johnson County, the company plans to do $33.4 million worth of projects. Those include replacing or relocating water main and hydrants at a cost of $14 million, spending more than $4.2 million to install new meters and service lines and spending upwards of $15 million to improve pumping, treatment, storage and operations facilities, the company said.
Specifically, in Johnson County, the company would:
Convert the existing chlorine gas disinfection system at the Orme and Marlin water treatment facilities to liquid sodium hypochlorite in order to improve safety
Replace two 20-year-old emergency backup generators at treatment and pumping facilities
Replace a pump station
Install two new wells to replace existing water wells that are nearly 50 years old.
“These investments are critical to the public’s health and safety and the economic health of the communities we serve and will also contribute to the creation of nearly 9,000 jobs across the state,” Indiana American Water President Deborah Dewey said in the news release.
Across the country, the water infrastructure system is aging and needs investment, the news release said, citing multiple studies that outline what needs to be done. For example, a 2016 study by the Indiana Finance Authority studied the state’s water utility infrastructure and said that more than $2.3 billion in infrastructure work was needed at the time, with $815 million needed annually to maintain the systems.
The public will have a say as the Indiana Utility Regulatory Commission reviews the rate hike. The state agency will do a comprehensive review of the request, take public input and conduct a public hearing before determining what, if any, increase is reasonable and justified. By law, the regulatory commission has 300 days to make a decision.
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Indiana American Water is proposing a rate hike that would affect 31,500 Johnson County households and businesses.
Here is a look at the history and proposed average monthly bill for a residence that uses about 4,000 gallons of water per month:
Monthly bill through July 2018: $36.63
Monthly bill as of Aug. 1, when bills decreased due to the federal tax law: $34.98
Proposed monthly bill in July 2019: $37.60
Proposed monthly bill in July 2020: $40.58
Source: Indiana American Water
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