The state agency that represents utility consumers has reached an agreement for a rate change with the water company that serves most Johnson County homes and businesses.
Water rates are still expected to climb, but nowhere near as high as previously proposed.
Water rates will likely increase about 1.7 percent this summer, and another 6.1 percent next summer, according to Indiana American Water.
Water bills for most residential customers using 4,000 gallons of water each month would go up about 15 cents per month this year, and an additional $2.26 per month next year if the Indiana Utility Regulatory Commission approves it, a total increase of 7.9 percent.
Last September, Greenwood-based Indiana American Water, which serves about 32,000 customers in Franklin, Greenwood, New Whiteland and several townships, asked the state to approve a rate hike that would have increased the typical residential water bill by $5.60 per month once it was fully implemented in 2020.
Initially, the Indiana Office of Utility Consumer Counselor recommended the commission deny the 17.5 percent hike that would have hit home and business owners as early as July, bringing in an additional $38.8 million for the company. Based on the agency’s research, rates should have actually been lowered about 7.6 percent, the OUCC said previously.
The agency argued the company’s return on investment should be lower than what it is requesting, which was not the case, and the costs of the utility’s proposed capital projects was unreasonable.
Indiana American Water will now bring in an additional $17.5 million in annual revenue, the OUCC said Tuesday.
The company 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.
Water bills just went down last summer 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 the agreed upon rate hike is approved, the average monthly water bill will jump to $35.15 in July 2019, and to more than $37.41 in July 2020.
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.
A final ruling by the regulatory commission is expected in April.
