INDIANAPOLIS, Ind. — The Indiana Utility Regulatory Commission had today denied Indiana-American Water’s request for an 8.64 percent – or $16.9 million – increase in revenue. Instead, the IURC granted a 1 percent or $1.95 million increase under Cause No. 44022.
Significant issues that impacted the case were the utility’s proposed return on equity, the IURC’s approval of the Office of Utility Consumer Counselor’s proposal on deferred income taxes, and the denial of the utility’s proposal to capture declining residential usage in rates.
The IURC reduced Indiana-American Water’s proposed return on equity from 11.5 percent to 9.7 percent. The impact of this adjustment alone decreased the utility’s proposed $16.9 million increase by almost 60%.
Due to the utility transitioning toward single tariff pricing, the impact on customer rates will vary by location. This transition provides more consistent rates from district to district due to the costs being spread out over the entire service territory. Before new rates can go into effect, the utility must file a cost-of-service study showing how the increase in revenue will be allocated among water and wastewater customers.
Once a new tariff is filed with the IURC, it will become clear how customer rates will be affected. The IURC must then review and approve a tariff detailing these rates and charges. The utility is expected to file this documentation within the next 30 days.
Indiana-American Water’s last rate case concluded in 2010, under Cause No. 43680. To view the Order in Cause No. 44022, please visit: www.in.gov/iurc.