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Staying green a costly measure: Water utility sale raises rates more than some expected

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Lewis Hoffmeyer was surprised when he opened his July water bill.

Not only had the New Whiteland resident been using more water to keep his lawn green during the summer’s drought, but he also saw the impact of a water rate increase after the town sold its water utility to Indiana American Water Co.

Hoffmeyer and his wife are retired and live on a fixed income. They thought their bill would increase by $10 to $15 with the utility sale. When they saw their July bill for $95, they knew they would have to stop watering their yard to be able to afford it.

New Whiteland sold its water utility to the Indiana American Water Co. in June, and residents were told their bills would be higher.

Under New Whiteland’s water rates, customers paid $2.49 per 1,000 gallons of water used, according to Indiana American Water Co. spokesman Joe Loughmiller. The Indiana American rate is $4.35, he said.

Before the sale, Indiana American told the town council earlier this year that the average user’s water bill would go up by $5 to $7 based on the company’s rates, New Whiteland Clerk-treasurer Maribeth Alspach said.

The company also told the council that customers who live within 1,000 feet of a fire hydrant would pay a monthly fire protection fee of $4.12, used for fire hydrant maintenance, said Jeff Henson, manager of business development for the Indiana American Water Co.

That additional fee makes the increase higher, he said.

Now, the average customer who uses 4,800 gallons of water per month pays $10 more, a 34 percent increase, Loughmiller said.

New Whiteland residents aren’t the first to face increases in their utility bills this year.

In Greenwood, residents began paying a new $5-per-month stormwater utility fee in May. The fee is used to pay for drainage projects and other stormwater work.

Indiana American Water also got approval from a state commission to raise water rates and is still determining how that will impact bills for customers, which includes residents in Greenwood, Franklin and parts of White River, Franklin and Needham townships.

New Whiteland residents had been paying lower water rates before the sale of the utility because the town bought water from Indiana American at a discounted wholesale price, Alspach said. The discount allowed the town to offer the water to its customers at a lower price, Alspach said. Now that New Whiteland customers are paying Indiana American Water Co., they pay the same rates as other county customers.

If New Whiteland had not sold the utility, the town would have eventually had to increase its rates to pay for repairs and replacements of water lines that have been in the ground for nearly 60 years, Alspach said. Water lines last between 50 to 75 years before needing to be replaced, Alspach said.

The Indiana American Water Co. can make repairs to or replace water lines in New Whiteland with money from the company’s maintenance reserves, spokesman Joe Loughmiller said.

If the town still owned the utility, the money to make those repairs would have to come from an increase in New Whiteland residents’ water bills, Alspach said.

The town received $4.2 million from the Indiana American Water Co. for the sale of the water utility, Alspach said. That money will be invested and will be the town’s savings, Alspach said.

Hoffmeyer and his neighbors Marvin Witzerman and John Hadley understand the reasons to sell the utility but are concerned about their higher bills.

All three used more water than usual this summer to keep their yards alive during the drought and expected their bills to be higher because of it. But they said they were not aware of the utility sale until after the decision had been made.

After receiving their July bill, Hoffmeyer and his wife stopped watering their yard in hopes of reducing their costs. The couple used nearly 9,000 less gallons of water in August compared to July and received a bill for $64.

“I figured it would go up maybe $10 or $15; but to go up like it did, it blew my mind,” Hoffmeyer said.

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