Indiana American Water Co. Rates
Indiana American Water Company's (IAWC's) current base rates were approved in January 2015.
In its 139-page order, the IURC approved settlement agreements reached between the OUCC and IAWC, and with all intervening parties in the case. Under the approved agreements, IAWC is authorized to raise its annual operating revenues by 2.55 percent. By comparison, IAWC requested a 9.8 percent increase when it filed its case in January 2014.
The OUCC's November 21, 2014 news release offers an overview of the agency's agreement with IAWC.
The IURC public file for the rate case is available by clicking here and entering cause number 44450.
In its litigation position, the OUCC recommended a rate decrease as summarized in the agency's May 5, 2014 news release. The OUCC also issued a March 17, 2014 news release inviting consumer comments and announcing the IURC's April 2014 public field hearings in Franklin and in Gary.
IAWC's previous base rates received IURC approval in June 2012.
Distribution System Improvement Charge
In addition to general rate cases, Indiana law (IC 8-1-31) allows water and sewer utilities to seek expedited rate recovery as often as once per year to replace infrastructure (such as aging distribution lines) that has exceeded its useful life.
This surcharge is referred to as the Distribution System Improvement Charge (DSIC).
- The law allows a water or sewer utility to impose a surcharge to earn a return on investment used to replace aging distribution or collection system infrastructure since its last rate case. Without this law, a utility would be required to wait until its next rate case to begin earning this return.
- A surcharge may not be imposed for plant additions used to connect new customers.
- Under the law, total surcharges cannot exceed 10 percent of the base revenue amount approved in the utility’s most recent general base rate case.
- The surcharge, which investor-owned water and sewer utilities may make between general base rate cases, requires IURC approval to take effect. A Commission order is required within 60 days of the utility’s filing.
- By law, the OUCC must file its report within 30 days of the utility’s request. The OUCC’s review is generally limited to whether the infrastructure additions qualify under the statute and whether the surcharge has been calculated correctly.
In Cause No. 42351-DSIC 9, IAWC received IURC approval for a surcharge raising rates by 1.95 percent.
- The OUCC filed testimony in February 2016, recommending lowering the surcharge to 1.87 percent.
In Cause No. 42351-DSIC 10, IAWC received IURC approval to increase the surcharge to 6.62 percent.
In Cause No. 42351-DSIC 11, IAWC has received IURC approval to increase the surcharge to 8.43 percent.
Lead Service Line Plan
The OUCC is reviewing the proposed plan and has until April 13, 2018 to file testimony. Under state law, the IURC must issue an order by August 27, 2018.
In separate dockets, IAWC is seeking IURC approval to purchase municipal utilities from Lake Station and Sheridan. The utility has received IURC approval to acquire the Charlestown and Georgetown municipal water utilities.