On May 3 residents of Northwest Indiana began paying more for their water.
Nearly 30 percent more, after the Indiana Utility Regulatory Commission (IURC)
approved on April 30 a new rate order for Indiana-American Water Company (IAWC).
Although that rate order provides for an overall statewide rate hike of
19.72 percent—significantly less than the overall hike of 26.43 percent
requested by IAWC and significantly more than the 11.66 percent recommended
by the Office of Utility Consumer Counselor—the actual hike for folks in
Northwest Indiana is 27.06 percent, IAWC spokesman Joe Loughmiller told the
Chesterton Tribune today.
That’s because, of the nearly $201 million which the company invested in
infrastructure statewide in the two and half years between January 2007 and
June 2009, fully $55 million was spent in Northwest Indiana.
“The rate study we did includes a cost of service study,” Loughmiller
explained. “In that cost of service study we look at how much it costs to
provide water to a particular community. We look at geography,
infrastructure, capital investments. And we’ve made significant investments
in Northwest Indiana.”
The 27.06-percent rate hike amounts to around 23 cents per day more,
Loughmiller said, or $6.81 per month. Prior to the IURC order, the typical
residential household using 4,800 gallons of water per month paid $25.17 per
month. Now it’s paying $31.98 per month.
The rate hike will result in approximately $31.5 million in additional
revenue for the company, IAWC said in a statement released on April 30. The
company attributed the need for the increase to “ongoing infrastructure
investments, rising expenses related to water treatment and delivery
systems, and increased operating costs.”
“Water is a critical part of everyday life and a strong economy,” IAWC
President Alan DeBoy said in that statement. “We work with communities all
across the state to make sure we are providing high quality water service
that meets their needs and, at the same time, controlling our costs wherever
“Water is still a great value at about a penny per gallon,” DeBoy added.
“Indiana-American Water is focused on making sure customers are getting good
service, with more than 90 percent reporting that they are satisfied or
extremely satisfied in their dealings with our customer service in the
The IURC’s April 30 order represents the fifth rate hike for IAWC in the
last eight years. Those five hikes have cumulatively raised the average
Northwest Indiana residential customer’s monthly bill from $18.02 in 2002 to
$31.98 now, an increase of $13.96 per month or nearly 75 percent.
•In November 2002 IAWC enacted an increase of 18.25 percent to recover costs
of a number of improvements, including the construction of a second main to
cover the Chesterton area.
•In June 2003 IAWC enacted a second increase of 26.2 percent, to recover the
cost of the $52.4 million supply tunnel which brings Lake Michigan water to
the Gary filtration plant.
•In November 2004 the IURC granted IAWC a third increase of 1.67 percent,
after the company had trimmed its original request for a 14.7 percent hike
to 10 percent. IAWC had sought this hike to recover the cost, among other
things, of acquiring Northwest Indiana Water Company in the first place as
well as of moving a customer service center from Indiana to Illinois. IAWC
also wanted to use the requested 10 percent hike to generate higher return
on shareholders’ investment and to provide additional incentive pay for
•In October 2007
IAWC enacted a fourth increase of 9.9 percent, after originally seeking a
hike of 18.1 percent, citing higher operating costs and investment in