OUCC Recommends Denial of Rate Increase

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(Image courtesy of Indiana American Water.) (Image courtesy of Indiana American Water.)

Indiana's consumer advocacy agency is recommending the Indiana Utility Regulatory Commission deny Indiana American Water Co.'s request for a 17.5 percent rate increase. The Indiana Office of Utility Consumer Counselor says a 7.6 percent decrease is more appropriate.

The requested increase would total $38.8 million. The OUCC's suggested decrease is about $16.9 million.

The OUCC says IAWC's authorized return on investment should be lower than what it is requesting and says the utility's request does not show that the costs for its proposed capital projects are reasonable.

In July, the IURC approved the utility's more than $170 million plan for lead service line replacement. That is part of more than $326 million in projects that IAWC is seeking rate recovery for, but the OUCC says the utility's proposal "does not include detailed information supporting the numbers." The OUCC says, without that information, it cannot determine wither the costs are reasonable.

For example, the consumer advocacy office says IAWC is proposing to demolish and reconstruct its Richmond treatment plant at an estimated cost of $45 million. The OUCC is instead recommending $10 million to improve the facility.

Indiana American Water Co. provides service to more than 300,000 customers in more than 50 Indiana communities. The utility has until January 22 to file rebuttal testimony.

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