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State office seeks to block Indiana American Water rate hike

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The state’s agency for utility consumers says a proposed rate hike by Indiana American Water Co. is unwarranted, and that the company should actually lower existing rates.

The Office of the Utility Consumer Counselor’s filing on Friday challenges $19.6 million in new revenue Indiana American is seeking to cover the costs of infrastructure upgrades.

The utility, a subsidiary of Voorhees, N.J.-based American Water Inc., has about 290,000 customers thoughout Indiana, including Noblesville, Greenwood, Shelbyville, Franklin and Mooresville.

The consumer counselor, which represents utility customers in rate cases, asked the Indiana Utility Regulatory Commission to reject Indiana American’s request and instead require the utility to reduce its annual operating revenue by $11.4 million, or 5.5 percent.

“The analysis by our attorneys and technical staff in this case shows that a revenue reduction is warranted,” Indiana Utility Consumer Counselor David Stippler said in a prepared statement. “The revenue requirement the OUCC is recommending will ensure sufficient funds to address IAWC’s operational and infrastructure needs, and to address the utility’s obligation to provide safe and reliable service to all of its customers.”

The state office wants regulators to reduce Indiana American’s cost of equity to 8.6 percent from 9.7 percent. The utility wants to increase those costs to 10.8 percent.

Also, the consumer counselor wants the water utility to use “more realistic projections of customer growth, declining usage, and property tax expenses than those included in the utility’s testimony.”

The state office cites several operating expenses it believes the utility can avoid increasing in areas such as business development, management and marketing, among others.

And the utility should implement industry benchmarking standards more in line with the consumer counselor’s performance recommendations for other water rate cases, the state agency said.

Indiana American has until May 28 to file a rebuttal to the consumer counselor’s filing.

A spokesman for the water company could not be immediately reached for comment Monday morning.

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  • Do The Same With Citizen's Energy Group
    Hey! Can this group conduct the same analysis on the water increase proposed and approved by Citizen's Energy Group?

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  1. Cramer agrees...says don't buy it and sell it if you own it! Their "pay to play" cost is this issue. As long as they charge customers, they never will attain the critical mass needed to be a successful on company...Jim Cramer quote.

  2. My responses to some of the comments would include the following: 1. Our offer which included the forgiveness of debt (this is an immediate forgiveness and is not "spread over many years")represents debt that due to a reduction of interest rates in the economy arguably represents consideration together with the cash component of our offer that exceeds the $2.1 million apparently offered by another party. 2. The previous $2.1 million cash offer that was turned down by the CRC would have netted the CRC substantially less than $2.1 million. As a result even in hindsight the CRC was wise in turning down that offer. 3. With regard to "concerned Carmelite's" discussion of the previous financing Pedcor gave up $16.5 million in City debt in addition to the conveyance of the garage (appraised at $13 million)in exchange for the $22.5 million cash and debt obligations. The local media never discussed the $16.5 million in debt that we gave up which would show that we gave $29.5 million in value for the $23.5 million. 4.Pedcor would have been much happier if Brian was still operating his Deli and only made this offer as we believe that we can redevelop the building into something that will be better for the City and City Center where both Pedcor the citizens of Carmel have a large investment. Bruce Cordingley, President, Pedcor

  3. I've been looking for news on Corner Bakery, too, but there doesn't seem to be any info out there. I prefer them over Panera and Paradise so can't wait to see where they'll be!

  4. WGN actually is two channels: 1. WGN Chicago, seen only in Chicago (and parts of Canada) - this station is one of the flagship CW affiliates. 2. WGN America - a nationwide cable channel that doesn't carry any CW programming, and doesn't have local affiliates. (In addition, as WGN is owned by Tribune, just like WTTV, WTTK, and WXIN, I can't imagine they would do anything to help WISH.) In Indianapolis, CW programming is already seen on WTTV 4 and WTTK 29, and when CBS takes over those stations' main channels, the CW will move to a sub channel, such as 4.2 or 4.3 and 29.2 or 29.3. TBS is only a cable channel these days and does not affiliate with local stations. WISH could move the MyNetwork affiliation from WNDY 23 to WISH 8, but I am beginning to think they may prefer to put together their own lineup of syndicated programming instead. While much of it would be "reruns" from broadcast or cable, that's pretty much what the MyNetwork does these days anyway. So since WISH has the choice, they may want to customize their lineup by choosing programs that they feel will garner better ratings in this market.

  5. The Pedcor debt is from the CRC paying ~$23M for the Pedcor's parking garage at City Center that is apprased at $13M. Why did we pay over the top money for a private businesses parking? What did we get out of it? Pedcor got free parking for their apartment and business tenants. Pedcor now gets another building for free that taxpayers have ~$3M tied up in. This is NOT a win win for taxpayers. It is just a win for Pedcor who contributes heavily to the Friends of Jim Brainard. The campaign reports are on the Hamilton County website. http://www2.hamiltoncounty.in.gov/publicdocs/Campaign%20Finance%20Images/defaultfiles.asp?ARG1=Campaign Finance Images&ARG2=/Brainard, Jim

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