By KEVIN NEVERS

Beginning June 1, customers of Indiana-American Water Company will see a 21.6 percent increase in their rates, following the completion of a new $52.4 million supply tunnel which brings Lake Michigan water to the company’s Gary facility for treatment.

The new concrete-lined tunnel—plus a new lake intake structure and a new pumping station—took more than two years to build and replaces an old tunnel which was hand-dug by Welsh coal miners almost a century ago. It was the last of 10 similar tunnels built around the same time and in use in the Chicago area. Eight of those tunnels have been decommissioned and two have failed, while the original tunnel—which had been in continuous use since 1909—was built and operated by a subsidiary of U.S. Steel Corporation.

“This really is an historic event for the area,” Indiana-American Vice-president and General Manager Bob Vaughn said in a statement released Friday. “As the steel industry moved into the area around the turn of the century, the need for a public water supply became a key component of the success of the region as a thriving industrial center on the Great Lakes.”

“This project,” Vaughn added, “is just as important today to ensure that we are able to deliver high-quality Lake Michigan water into the next century in the communities we serve all across Lake and Porter counties. Lake Michigan water is a preferred commodity in the area and a valuable resource for businesses and residents alike. This project will allow us to meet the needs of this region now and well into the future.”

Typical residential customers should see an increase in their monthly water statements of $4.70, Indiana-American said, for an average monthly bill of $26.42. Although the new rates will be effective June 1, statements mailed in June and July will be prorated so that only water used after the effective date will be affected by the new rates.

The 26.2 percent increase is the second of two approved by the Indiana Utility Regulatory Commission. The first, for 18.25 percent, became effective Nov. 6, 2002. Indiana-America sought that increase to defray the cost of a number of improvements: new pumps and automation enhancements at the Ogden Dunes filtration plant; pump upgrades and electrical service at several pump stations throughout the Northwest Indiana service area; the addition of backup electrical generator capacity at another pump station; the installation of a new elevated storage tank in Merrillville; new computer control technology at the Gary Borman Park and Ogden Dunes filtration plants; and the rehabilitation and replacement of numerous water mains.

The combined 44.25 percent increase is somewhat lower than the 50.43 percent increase which Indiana-American originally sought when it first petitioned the IURC in the fall of 2001. At the time Indiana-American said that the average monthly bill would jump to $27.53.

Posted 6/2/2003