BY JENNIFER BAILEY
DANVILLE
January 08, 2008 11:16 am
—
Liberty Village resident Jacque Eicher is on a fixed income.
She’s had enough problems with high water bills from Aqua Illinois last year. The thought of up to a 19 percent rate increase makes her even more frustrated.
“For the water bills, it’s going to put a stress on things,” she said. “They don’t increase my pension (to the rate of her bills). It would be very distressing to face these increases.”
But three years after the last rate increase, and a year after a water bill surcharge increase, Aqua Illinois is asking for a 19 percent water rate increase.
Aqua filed the proposed rate increase with the Illinois Commerce Commission. The hike would not go into effect until 2009 or possibly as early as December 2008 if the ICC gives approval in November, according to Tom Bruns, Aqua Illinois vice president and regional manager for the Vermilion division.
Eicher has just gotten back to the normal $30 or so in monthly water bills, from about $150, one month last year. Eicher said the water company admitted there was a mistake and gave her credit off other bills.
“This was just flabbergasting,” she said.
She’s not looking forward to the thought of going through more hassles with increased bills.
The proposed change in the rate schedule is for water service in all areas served by the Vermilion Division, which includes more than 55,000 residents in Danville, Tilton, the Danville Correctional Center, Lake Boulevard and Hooton areas, Catlin, Westville, Belgium, Philo and Indianola.
If the rate increase is granted in full, the average monthly residential bill of 4,800 gallons would increase by $8.21, or 27 cents a day, to $49.76.
“We hope to get the 19 percent,” said Tim Cahill, manager of business development and customer relations at Aqua Illinois.
“It’s never easy to ask for a rate increase,” Bruns said. “We’d rather not ask for it.”
Bruns said the increase request is driven largely by capital improvements costs in the system and throughout the county.
Also, the water company continues to fund water main extensions and tries to keep up with other operating expenses, such as increasing electricity bills at its treatment plant.
“A lot of improvements have been made in the system,” Bruns said, adding they will include the two elevated water towers planned for later this year near Denvale and in Philo at a combined cost of about $2 million.
“A number of areas in Danville have water mains that are getting pretty old, and were too small when they were installed,” he said. Upgrading the mains allows for full fire protection, he said.
The requested rate increase is determined through a formula for what is needed for operating and capital expenditures, Bruns said.
“It came in just below 21 percent,” he said of what is necessary to recover Aqua’s capital investment and operating costs.
But “we have a lot of people who are on fixed incomes (and) people have difficulty with utility bills,” Bruns said.
Aqua officials wanted to help customers by slightly decreasing the rate request.
“My guess is it’s not likely we’d receive the full 19 percent,” Bruns said.
Cahill said the ICC normally approves a 13-14 percent increase.
The last rate increase went into effect in 2005. Aqua Illinois’ rate increase request then and ICC approval was for about 14 percent.
Cahill estimated the percentage increase during a four year period would amount to 4.75 percent, if 19 percent, and a 3.5 percent increase per year if 14 percent.
A lot of people don’t want to hear about an increase, but when averaged over the years, it keeps up with inflation, he said. Other water companies in the area, he pointed out are requesting 60 percent or more in rate increases.
Aqua’s increase will help offset $20 million in investments the company has or is making in infrastructure improvements, including: two new elevated tanks, safety and process improvements for source-of-supply and water treatments and upgraded distribution projects.
Cahill said of the $20 million in capital improvements, Aqua has spent since 2004 to April of last year, $7.5 million was spent on upgrading water mains, about $1.6 million was spent on pump stations, hydrants and new elevated tanks, $3.7 million went to rehabilitate meters with the new radio frequency capability and there has been $2.8 million in work out at the lake, dam and plant.
There also was a new nitrate plant.
“A lot of it’s new mains — like 10 miles in last three years,” Cahill said.
It costs about $100 per foot to put in the new mains, she said.
When the next rate increase goes into effect, the 4.59 infrastructure surcharge on water bills for the Qualifying Infrastructure Plant Surcharge Program will drop back to zero.
Based under Illinois law, Aqua Illinois has the ability to increase the surcharge up to 5 percent, rather than go back for a full rate change each year.
The Illinois Commerce Commission won’t approve a rate increase annually, Cahill said.
Copyright © 1999-2008 cnhi, inc.