Illinois American Water Company seeks 60 percent increase in rates

By Patrick Wade

Illinois American Water Company hopes to hike Champaign County water rates 60 percent, a move that has city and village officials investigating if the increase is necessary.

The Champaign area private water supplier filed its rate increase request with the Illinois Commerce Commission on Aug. 31, and now Champaign, Urbana, Savoy and the University are working with a private consultant to determine whether the hike is justified.

“Anytime you have a hike of that magnitude, 60 percent, that does tend to catch your attention and looks a little bit out of kilt,” said Savoy Village Manager Richard Helton.

The company has filed for rate increases in every district it serves in Illinois, but the 60 percent increase it requested in Champaign County is the highest in the state, said Barry Suits, operations manager for Illinois American Water’s Champaign County district. He added that the increase is because the county is the only one receiving a new water treatment plant.

The increase would raise the average Champaign County customer monthly residential water bill from $25.28 to $40.56 for homes using 6,000 gallons of water per month, Suits said.

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“I think what we’re hoping to find is that it would be justified,” Helton said. “And if not, that would come out and we would be able to show that it isn’t warranted and a much lower increase might be the way to go.”

About $6.64 of each customer’s average increase would go toward the new $51 million water treatment plant just west of Champaign, for which the company has already broken ground. The treatment plant is necessary to keep up with the growth of Champaign, as well as the Illinois Environmental Protection Agency water quality regulations which are becoming more stringent, Suits said.

“A lot of people struggle with that decision because of the impact it might have on rates,” Suits said. “And what we know is now is the right time to make this investment for our treatment plant.”

From each customer’s average increase, $7.17 will pay for basic maintenance and operations. Capital investments, totaling $12.7 million the company has made in Champaign County, will also contribute to these needs.

“We realize this is a significant increase, especially for seniors and students,” said Suits, who added that the uses for the additional costs will have a significant impact on Illinois American Water customers over the next 15 years.

Champaign City Attorney Frederick Stavins said that in his 25 years in Champaign, he has never seen a rate increase like this.

Stavins added that the city will use the data it collects and “probably get involved” in the case when the Illinois Commerce Commission reviews Illinois American Water Company’s request for the rate increase. The commission must approve the increase before it goes into effect, a process which could take up to 11 months.

“We’re part of the universe of customers,” Stavins said. He added that any customer of the water company is allowed to present their case at the commission’s review.

Spokespeople from both the Citizens’ Utility Board and the attorney general’s office have told the News-Gazette that they will also be involved in the Illinois Commerce Commission proceeding.

There was talk last spring among the Urbana and Champaign city councils regarding the possibility of purchasing the water utility through eminent domain, making it a municipality. Stavins said that is not the situation they are facing now.

“This case has nothing to do with that,” Stavins said.

Helton said that while he understands private businesses need to recuperate their losses, Illinois American Water seems to be making a sizable profit.

“We understand that they’re building a new water plant to serve the Champaign-Urbana-Savoy metro area,” Helton said. “But 60 percent is just a little high.”