Indiana American Water’s customers in Richmond could see their bills increase gradually to $14 more per month if a proposed rate increase is approved.

IAW has filed a rate adjustment request with Indiana Utility Regulatory Commission, noting $875 million in water and wastewater system investments to be made through 2025.

If the proposed rates are approved as requested, the bill for a typical Richmond residential customer using 4,000 gallons per month would increase approximately $14.47, or approximately 48 cents per day, when rates are fully implemented in 2025.

Rates for the typical residential customer would increase by approximately 12% in January 2024, by 8% in April 2024 and by 9.5% in April 2025, Joe Loughmiller, IAW external affairs manager, told Western Wayne News.

IAW’s current base rates water bill for Richmond residential customers using 4,000 gallons per month with a 5/8” water meter is $44.88.

Recognizing that affordability might still be an issue for some customers, IAW is proposing a new rate design that provides 1,500 gallons of water usage at no additional cost above the fixed monthly customer charge for all water customers.

The proposed change would provide relatively low-cost basic water service for customers on fixed incomes who use a lower volume of water than typical residential customers, a news release said.

The filing also includes a proposed Universal Affordability Tariff to provide multiple tiers of discounts to address the affordability needs of different levels of household income.

Under the new rate structure, eligible households would receive monthly bill discounts of 30-80% for water service.

Rates for residential and commercial customers will differ, depending on water meter size, number of water meters and the quantities used, Loughmiller said.

There’s one slight savings planned as well. Also included in the company’s request is a proposed decrease for most customers of the Public Fire Protection Surcharge, paid by all customers located within municipal boundaries where authorized by ordinance or within 1,000 feet of a public fire hydrant, Loughmiller said.

The proposed change would lower the charge for most Richmond residential customers with a 5/8” meter from $4.85 to $4.75 per month when fully implemented in mid-2025.

Fees collected through the Public Fire Protection Surcharge cover the costs for construction, maintenance, operation, administration and financing of fire protection water infrastructure in the community. To ensure IAW can provide adequate fire service capability, Loughmiller said it regularly invests in its distribution system through capital investments and continued maintenance activities.

Water company officials say the rate increase is needed to continue providing safe and reliable service and cover for significant increase in the cost of procuring chemicals, goods and services.

“Indiana American Water has made significant investments in aging infrastructure and its treatment and distribution facilities to ensure service reliability, water quality, and fire protection capabilities that help protect customers and the communities we serve,” said Indiana American Water President Matt Prine in the release. “We also remain steadfastly committed to addressing the needs of our most vulnerable customers and have included components in our request to keep their rates affordable.”

IAW is seeking to increase revenues over a phased, three-step process through May 2025 that would result in $86.7 million of additional annual revenue when fully implemented.

It last applied for new rates through a general rate filing in September 2018 and last implemented new rates in 2019.

Results of a customer affordability study conducted as part of the filing demonstrate that the affordability of the company’s water and wastewater services as a comparison of monthly bills to monthly household income has steadily improved over the past decade and will remain affordable under the company’s proposed rates, the release said.

Water customers invited to comment

Indiana Utility Regulatory Commission’s rate review process offers multiple opportunities for customer involvement. Those ways include written comments, attendance at public input hearings and engaging with consumer advocacy organizations that participate in the proceedings.

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A version of this article appeared in the April 12 2023 print edition of the Western Wayne News.

Millicent Martin Emery is a reporter and editor for the Western Wayne News.