Indiana Utility Regulatory Commission
302 West Washington
Street, Room 306
Indianapolis Indiana 46204
Mary Beth Fisher
SAFEGUARDS TO PROTECT INDIANA-AMERICAN RATEPAYERS
the Indiana Utility Regulatory Commission approved an order, in Cause No 42250,
setting safeguards to protect Hoosier ratepayers if the Indiana-American Water
Company is sold to the German based holding company, RWE.
Commission used the limited powers available to it in an effort to ensure
reasonable rates and quality service in Indiana after the Indiana water company
is acquired by foreign investors.
Commission has learned from previous experience that the purchase of a
regulated utility by a non-regulated holding company can result in the
deterioration of customer service. After careful consideration of the evidence
in this case, the Commissioners are not convinced that the benefits of the
merged company will outweigh the potential risks to the citizens of
Indiana. The safeguards put in place by
today’s order include:
- For a period of
three (3) years after the acquisition, Indiana-American must provide the
Commission with written notice 30-days prior to any planned workforce
reduction greater than 5-percent of Indiana-American’s existing workforce.
- For at least one
year after the acquisition there shall be no layoffs or involuntary
severance of employees, except for cause.
- Except for
resignations, Indiana-American shall retain the existing management for at
least one year from the acquisition.
cannot force its customers to pay any costs associated with the sale.
must maintain its equity level no lower than 35% of total investor
supplied capital, and notify the Commission in writing within 30 days
after the implementation of any change in its equity ratio of greater than
five percentage points.
- The company will
have 30-days to report any upgrade or downgrade of the bonds of RWE,
Thames Water Plc, or American Water Capital Corp. by Moody’s or Standard
will provide Annual Reports of its parent company to the Commission, in
- The company will implement
a system to electronically track customer complaints in order to document
the nature and response times to those complaints and report those
findings to the Commission annually.
must develop and implement a mechanism to track the savings and costs from
the sale, and a methodology beneficial to ratepayers to allocate those
savings and costs.
RWE is active in more than 120 companies on six
continents. Indiana-American serves
264,000 customers in 21 Indiana counties.