Indiana American Water company implements rate increase

Staff Reports

Indiana American Water announced Monday the implementation of the second step of a rate increase approved by the Indiana Utility Regulatory Commission in June 2019 for customers across the state, including those in Seymour.

The new rates are effective for all service provided to customers after May 1.

The impact for most residential customers using 4,000 gallons of water each month was approximately 34 cents per month (0.96%) after Step 1 went into effect in July 2019 and an additional $2.22 per month (6.3%) with the Step 2 increase now in effect.

Details on specific rate impacts by district, rate group and customer class have been posted on the company’s website at

The utility’s ongoing infrastructure investments are the primary driver behind the increase, and they included more than $542 million of water infrastructure investments in a request filed in September 2018 to increase its rates, according to a news release from the Greenwood-based company.

Of that amount, approximately $79 million was invested at treatment facilities in Kokomo, Richmond and Muncie to, among other things, add ultraviolet disinfection to the existing treatment process, adding an extra layer of protection against chlorine-resistant microbes, viruses and pathogens that may be present in surface water sources.

“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 for the more than 1.3 million people who depend on us every day,” company President Matt Prine said in the news release.

The investments, which have all been placed in service, help maintain and enhance service, water quality, system reliability and capacity and fire protection capabilities for customers while keeping the cost of water service for most households their most affordable utility bill at about a penny per gallon, according to the news release.

Other projects that have been completed and were included in current rates include:

Converting nine facilities from chlorine gas to liquid sodium hypochlorite disinfection systems to improve safety.

Replacing or upgrading more than a dozen wells, several pumping stations, water filters, large diameter water mains and other critical facilities.

Replacing and/or retiring from service more than 13,000 lead service lines.

In addition to these major projects, nearly 120 miles of aging water mains have been replaced.

The rates are based on the true costs of providing water service as reviewed by the IURC, according to the company.

The phased approach to implementing new rates results in a 7.9% overall increase in operating water revenues for the company. The increase was implemented in two steps with the first increase of 1.99% effective July 1, 2019, and a second increase that became effective May 1 of this year of 5.79%.

Prior to this request, the company last filed for new rates through a general rate filing in January 2014 and received an order from the IURC in January 2015.

The rate change also includes a one-time adjustment to customers reflecting the amount collected in revenues after the Tax Cuts and Job Acts of 2017. The adjustment will be spread out over a 12-month period as a detailed credit to any amounts due each month.

The credit for the typical residential customer will total $19.26, or approximately $1.60 per month for one year. The actual amount of the credit depends on number of factors, including meter size, whether the customer was paying a fire protection surcharge during the time the tax was collected and current usage. The Tax Cuts and Job Acts also resulted in a previous rate decrease of 4.4% effective Aug. 1, 2018.