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Consumer group: Citizens water hike could cause 'rate shock'

October 19, 2015

A consumer agency is asking state regulators to approve just about half the water rate increase Citizens Energy Group wants, warning that substantially higher rates could cause “rate shock” for some customers.

The Indiana Office of the Utility Consumer Counselor filed testimony late last week in Citizens’ ongoing rate case, recommending to the Indiana Utility Regulatory Commission that the utility’s rate increase be limited to about $20.5 million in new annual operating revenue—not the $37.7 million the Indianapolis utility requested, which would raise its water revenue by about 20 percent.

Citizens filed a petition for the hike with IURC in June.

If Citizens’ request is approved, average monthly water bills for residential customers would rise about $6—from $28.97 to $34.99, including an increase in the utility’s flat monthly service charge, according to a memo from the IURC. The rate case does not include sewer, natural gas or steam utility rates.

The consumer counselor’s office urged Citizens not to saddle ratepayers with more responsibility to pay for system repairs that the utility says it needs to make to improve its aging infrastructure.

The utility has proposed to fund its repairs—about $49.5 million in investment is needed, it says—through revenue from rates instead of by taking out more long-term debt, which the utility has called “unsustainable.”

The OUCC also advocated that the utility keep steady its flat monthly customer charge. Citizens has proposed a flat fee increase of about $3.50 for residential ratepayers who use 2,244 gallons per month.

“OUCC testimony notes that the utility’s proposed customer charge increases would discourage water conservation while causing disproportionate rate shock for low-volume users,” according to a press release from the group.

The utility provides water service to about 318,000 customers in and around Marion County. It last hiked its water rates, by 9 percent, in March 2014.

Along with its recommendation, the OUCC submitted letters and public testimony from Indianapolis residents, many of whom said they didn’t think the rate request was justified.

Indianapolis resident Kelsey Brunts called Citizens’ request “exorbitant.”

“If Citizens Energy Group has not set aside profits to reinvest in infrastructure, it is a sign of a poorly run business, not justification for forcing customers to indefinably shoulder the burden,” she wrote in testimony that was submitted on Thursday to the IURC.

Citizens Energy declined to comment on the OUCC’s concerns. It has until Nov. 9 to file a rebuttal.

“We’ll let our testimony speak to itself and look forward to the hearing in December,” said Citizens spokeswoman Sarah Holsapple.

The IURC plans to begin hearings over the case at a Dec. 8 meeting.
 

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