Indiana American Water Co Rates
Pending Rate Case
Indiana American Water Company (INAWC) is requesting a rate increase in a newly filed case. The utility's request would raise annual revenues by approximately 31.1% ($86.7 million). The increase would implemented in three phases. In testimony filed on July 21, 2023, the OUCC recommends limiting the increase to about 6.6% ($18.6 million).
- The OUCC is the state agency - separate from the IURC - that represents all consumers in cases before the Commission.
- All publicly filed documents in this case (Cause No. 45870) are available on the IURC's website.
The OUCC filed its proposed order for the IURC's consideration on Oct. 27, 2023. A final decision from the IURC is not expected until later this winter.
Most rate cases take approximately 300 days to complete. The OUCC's timeline outlines the steps in the process.
- Previous Base Rate Case (2018-2019)
A settlement agreement in Indiana American Water Company's (IAWC's) most recent base rate case received IURC approval on June 26, 2019. The following links offer additional information:
- OUCC News Release (6-28-19)
- OUCC News Release (3-19-19)
- Settlement Agreement
- OUCC Settlement Testimony: Stull
- OUCC Settlement Testimony: Mierzwa
- IURC Case File
IAWC's previous base rates were approved in January 2015.
- 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.
- Certain costs can be recovered through the DSIC and not count toward the 10-percent cap. They include replacements of customer-owned lead service lines and galvanized steel service lines, costs for improvements placed in service due to a road or highway construction or improvement, and property taxes associated with eligible infrastructure improvements.
- 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 statutorily limited to whether the infrastructure additions qualify under the statute and whether the surcharge has been calculated correctly.
IAWC's current DSIC of $3.18 for most residential customers received Commission approval in March 2022. In a pending case, IAWC is seeking to increase the monthly DSIC for residential customers to $8.06. The OUCC filed testimony on Feb. 17 recommending the increase be limited, and setting a new charge of $6.28. The IURC’s Mar. 22, 2023 order approved a new charge of $7.96.
A previous DSIC received Commission approval in March 2021.
Three DSICs received IURC approval between IAWC's 2015 and 2019 rate orders:
- Service Enhancement Improvement Rider
A 2020 Indiana law (IC 8-1-31.7) allows water and sewer utilities to seek expedited rate recovery under a Service Enhancement Improvement Rider. On Mar. 16, 2022, IAWC received approval of a plan for implementing this charge in Cause No. 45609.
- Lead Service Line Plan
- Charges for New Connections