Indiana American Water Files Rate Request

Indiana American Water today filed an application with the Indiana Utility Regulatory Commission (IURC) to adjust rates for water service in all of the company’s operating districts.

Indiana American Water’s ongoing infrastructure investments are the driver behind today’s rate request. The company will have invested nearly $221 million statewide to enhance its water infrastructure between July 1, 2011 and November 30, 2015. All these investments in local water infrastructure systems enhance service quality, reliability and fire protection for customers while keeping the cost of water service for most local households their most affordable utility bill at about a penny per gallon.

The company last filed for new rates in May 2011 and received an order from the IURC in June 2012.

According to Indiana American Water President Alan DeBoy, “Indiana American Water’s strategy is to make prudent, proactive investments in our infrastructure, which is more cost-effective in the long run and reduces the risk of major service and water quality issues.

“Since our last rate request, we have continued to implement efficiencies and best practices throughout our business to reduce our operating and maintenance expenses over the last four years,” DeBoy said. “Our employees are doing more with less through productivity gains like process improvements, attrition in the labor force and using and deploying new technology. They have also kept their focus on quality service by enhancing overall customer satisfaction during the same time period.”

The net effect is a projected reduction in operating and maintenance (O & M) cost of more than $7 million from 2010 to 2015, according to DeBoy. “In contrast, if we had simply allowed these types of expenses to rise at the inflation rate during this time, the result would have been an increase in O & M expense of more than 23 percent, or $16.1 million,” he said.

“These savings are particularly important as we face a growing need to replace much of our infrastructure that is nearing the end of its useful life,” DeBoy continued. “For every dollar of O & M expense we are able to cut, we can invest just over six dollars in infrastructure without impacting customer rates.”

If approved as filed, the monthly impact in rates to the typical residential customer would be approximately $2.40 per month or 8 cents per day. The overall increase being requested is approximately 9.8 percent.

Many communities across the country are facing a challenge of deteriorating water and wastewater infrastructure and associated rate hikes. The United States EPA says the nation’s water and wastewater utilities will need to invest approximately $1 trillion in water and wastewater infrastructure over the next two decades to replace thousands of miles of pipe and for upgrades to treatment plants, storage tanks and other assets to ensure public health.

Indiana American Water’s rates are based on the true costs of providing water service as reviewed by the IURC.

No rates will change until the IURC completes a comprehensive review of the request and determines it is reasonable and justified. By statute, the IURC is required to return an order regarding the company’s rate request within 300 days of the filing. Public hearings and opportunities for public comment are part of the process, under the direction of the IURC.

“The communities we serve rely on us to provide reliable, quality water and wastewater service to support the local economy and to provide a high quality of life for residents,” DeBoy said. “These investments will help ensure we are able to keep that commitment to the health and prosperity of our customers and community partners in Indiana.”

About Indiana American Water

Indiana American Water, a subsidiary of American Water (NYSE: AWK), is the largest investor-owned water utility in the state, providing high-quality and reliable water and/or wastewater services to more than 1.2 million people. Founded in 1886, American Water is the largest publicly traded U.S. water and wastewater utility company. With headquarters in Voorhees, N.J., the company employs approximately 6,700 dedicated professionals who provide drinking water, wastewater and other related services to an estimated 14 million people in more than 30 states and parts of Canada.

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