YOUR WATER RATES
Water-service rates are based on the real costs of treating and delivering water to customers, and are regulated by state public utilities commissions (PUCs).
To determine rates, we work with PUC staffs to study costs of construction, maintenance, operation, administration and financing. Once the studies are complete, the company and PUC present any differing conclusions before an administrative law judge. Based on the judge’s opinion, the PUC sets the water rates.
Rates charged for service may vary based on a customer’s meter size. All customers pay the same rate for water usage. Customers are billed based on a regular meter reading, either monthly or quarterly for residential customers as well as for commercial and other public authority customers.
Rates can vary based on the cost of providing service in the communities we serve. Before it reaches your home or business, water is treated through an intricate treating and testing process to help ensure it meets or surpasses rigorous drinking water quality standards.
You can learn more about the rate setting process in our white paper: Challenges In The Water Industry: The Rate Approval Process.
Information on Indiana American Water's Most Recent Rate Request, Settlement Agreement & Order - Cause No. 45142
Indiana American Water filed a petition with the Indiana Utility Regulatory Commission (IURC) on September 14, 2018 to adjust its rates for water service in the communities it serves across the state. A settlement agreement was reached between the company and the Indiana Office of Utility Consumer Counselor (OUCC) and several other interested parties on March 18, 2019. The IURC approved that settlement agreement and issued an order on June 26, 2019 adjusting the company's rates and tariffs for water service across the state.
Indiana American Water’s ongoing infrastructure investments are the primary driver behind the increase. The company included $542 million of water infrastructure investments in its request to increase rates. These types of investments are necessary to maintain and enhance service, water quality, system reliability, 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.
Prior to its most recent filing in 2018, 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.
To learn more about the filing and the settlement agreement, you can view a news release with more details. You can learn about the IURC's approval/order on the rate request by viewing a news release that is posted on the company's website. You can also view information about the rate request at the Indiana Utility Regulatory Commission's Online Services Portal for Indiana American Water's docketed case.
Distribution System Improvement Charge (DSIC) 13 Filing & Order (Cause No. 42351)
The Indiana Legislature, recognizing the critical need for water and wastewater infrastructure replacement, enacted legislation many years ago allowing water utilities to make periodic adjustments to their rates and charges to earn a return on eligible improvements and to recover depreciation expense on those improvements without filing a burdensome general rate case. The Distribution System Improvement Charge (DSIC) mechanism encourages water utilities to continue to invest in their distribution systems by reducing regulatory lag between investment in system improvements and recognition of that investment in rates. Other states have similar statutes.
On March 21, 2022, the Indiana Utility Regulatory Commission (IURC) approved an increase to the DSIC surcharge related to a net investment of more than $77 million in the company’s distribution system across the state, amounting to a 3.13% increase in rates. The surcharge applies to all residential, commercial, other public authority, industrial, and sale for resale customers, except for the customers of the newly acquired Town of Lowell and River’s Edge systems. The impact to a typical residential customer with a 5/8” water meter would be an additional $1.57 per month or approximately 5 cents per day.
The DSIC-13 order is in addition to the surcharge already in place for DSIC-12 approved in March 2021. With this most recent increase, and a reconciliation adjustment for DSIC 12 approved by the IURC on May 13, 2022 that involves adjusting the DSIC rate to true up what the company was authorized to collect from the last DSIC ruling and what was actually collected over the subsequent 12-month period, the total DSIC charge is $3.21 for a typical residential customer (with a 5/8" meter). Included in DSIC-13 are non-revenue producing projects placed in service up to November 30, 2021 that were not included in rate base in the company’s most recent DSIC-12 filing in 2021.
The projects typically covered by DSIC are replacements, relocations and reinforcement of existing water mains, valves, hydrants, customer service lines and meters, and tank rehabilitation & painting projects. Reinforcement infrastructure consists of new mains required to increase flow capacity to improve service where existing mains could not meet demands for fire service flows.
All Indiana American Water residential, commercial, other public authority, industrial, and sale for resale customers across the state are affected by the surcharge, except for the customers of the newly acquired Town of Lowell and River’s Edge systems. The surcharge will remain in effect until a rate order is received in a future general rate case filing and the projects included in DSIC-12 and DSIC-13 will be rolled into that rate order.
Indiana American Water is dedicated to maintaining and improving the quality and reliability of the local water system. Part of that responsibility is making ongoing investments to our water distribution system. The DSIC helps complete the replacement of certain types of aging water infrastructure, which need to be upgraded to meet water service requirements and/or service standards.
The costs to make these necessary improvements will continue to increase over time. By investing today, we will save money in the long-term and ensure the reliability of our water infrastructure now and for future generations.
Additional information is available at the IURC's Online Services Portal.