ICC Reduces Amount of Illinois-American’s Water Rate Hike Request

Water bills in the Champaign area are expected to go up next month, but state regulators say the local water company won't get the full increase it's seeking.

Last year, Illinois American Water sought an increase of nearly 35% for customers in Champaign-Urbana. But a spokeswoman for the Illinois Commerce Commission says cost estimates for the company, expenses it planned to recoup through a rate hike, were simply too high. The agency has trimmed Illinois American's rate hike request to about 22%. It filed the request with the ICC last May. The company now has about five days to adjust its rates. ICC Chairman Manuel Flores says the company can't view customers as 'an open checkbook'.

Spokeswoman Beth Bosch says the agency had also asked the water company to conduct a cost of service study, to provide a baseline for what some services cost. "These cases when they're filed, they take about a year to go through," says Bosch. "The study they did was done two years ago. So there was some question about whether it was of any value to the case. So that was another issue. And so the commission felt that the company needs to file a timely cost of service study with a rate case, not something that's been done prior." Bosch says Illinois American was seeking $61 million in additional annual revenue - that amount has been reduced by about $20 million. Randy West with Illinois American says the company won't know how much rates will be adjusted until it has time to review the order from the ICC. He says the company has provided the agency with thousands of documents to justify the new rate hike, and a previous one. West says most of the funds from increases in the Champaign area are paying for a new water treatment plant that went on line in late 2008.