Urbana to Intervene on Illinois-American Water’s Rate Hike Request

January 18, 2012

The city of Urbana hopes to have a say before Illinois American Water's local rates go up as much as 18 percent, or roughly $7, this fall.

The city council's 6-1 vote means Urbana will spend up to $8,000 in legal fees to join Champaign, Savoy, St. Joseph, Sidney and Philo, with hopes of reducing the amount of the company's latest rate hike request before the Illinois Commerce Commission.

Illinois-American wants to raise them for 308,000 customers, seeking $38 million in revenues.

External affairs manager Chris Bacon said much of the request is for infrastructure like fire hydrants, valves, and more than four miles of water main. The company will spend $180 million statewide on these upgrades. Meanwhile, $10.5 million in revenues would make up for a decline in water usage among customers.

Alderman Charlie Smyth said that part of the request isn't fair.

"It really bothers me that people who have conserved, who have cut their costs, are going to get punished via this rate increase," Smyth said. "I think that's totally inappropriate."

But Bacon said customers will be better off in the long run.

"The more customers conserve water, the less improvements that we have to make, making repairs to costly mains, wells, pipes, things of that nature," Bacon said.

If the ICC approves the full amount of the request, it would also mean rate increases of about 25 percent for small local commercial customers. Illinois American made the request last October, and expects the process to take about 11 months.

Alderwoman Heather Stevenson cast the lone dissenting vote. Citing tight finances, she says the $8-thousand should be spent on something else with no guarantee the rate hike request will be reduced.

Story source: WILL