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Indiana Office of Utility Consumer Counselor

Indiana Office of Utility Consumer Counselor

OUCC > Water/Sewer > Key Cases By Utility > Indiana American Water Co. Rates Indiana American Water Co. Rates

Base Rates

Indiana American Water Company's (IAWC's) current base rates were approved in January 2015.

In its 139-page order, the IURC approved settlement agreements reached between the OUCC and IAWC, and with all intervening parties in the case. Under the approved agreements, IAWC is authorized to raise its annual operating revenues by 2.55 percent. By comparison, IAWC requested a 9.8 percent increase when it filed its case in January 2014.

The OUCC's November 21, 2014 news release offers an overview of the agency's agreement with IAWC.

IAWC's revised tariffs are available by clicking here.

The IURC public file for the rate case is available by clicking here and entering docket number 44450.

In its litigation position, the OUCC recommended a rate decrease as summarized in the agency's May 5, 2014 news release. The OUCC also issued a March 17, 2014 news release inviting consumer comments and announcing the IURC's April 2014 public field hearings in Franklin and in Gary.

IAWC's previous base rates received IURC approval in June 2012. The OUCC's news release offers additional information.

Distribution System Improvement Charge

In addition to general rate cases, Indiana law (IC 8-1-31) allows water and sewer utilities to seek expedited rate recovery as often as once per year to replace infrastructure (such as aging distribution lines) that has exceeded its useful life.

This surcharge is referred to as the Distribution System Improvement Charge (DSIC).

  • The law allows a water or sewer utility to impose a surcharge to earn a return on investment used to replace aging distribution or collection system infrastructure since its last rate case. Without this law, a utility would be required to wait until its next rate case to begin earning this return.
  • A surcharge may not be imposed for plant additions used to connect new customers.
  • Under the law, total surcharges cannot exceed 10 percent of the base revenue amount approved in the utility’s most recent general base rate case.
  • The surcharge, which investor-owned water and sewer utilities may make between general base rate cases, requires IURC approval to take effect. A Commission order is required within 60 days of the utility’s filing.
  • By law, the OUCC must file its report within 30 days of the utility’s request. The OUCC’s review is generally limited to whether the infrastructure additions qualify under the statute and whether the surcharge has been calculated correctly.

In Cause No. 42351-DSIC 9, IAWC has received IURC approval for a surcharge that will raise rates by 1.95 percent.

IAWC filed its request on January 14, 2016, including its petition and testimony (Verdouw and Hoffman).

The OUCC filed testimony (Foster and Parks) on February 15, 2016, recommending lowering the surcharge to 1.87 percent.

6-8-16