DANVILLE – Last year when Aqua Illinois filed its rate increase request, Aqua officials estimated the average monthly residential bill would increase by $5.42 or about 10 percent with approval from the Illinois Commerce Commission.
With the ICC approving a lower rate increase this week, Aqua Illinois Area Manager Bob Ervin says an average local customer can expect to pay $1.81 more per month.
The new rates become effective March 16.
Aqua officials were notified Thursday the ICC had voted on Aqua’s rate order Wednesday and it was approved, Ervin said.
“We got the final order (Thursday) and it’s about 70 pages long with exhibits and attachments,” Ervin said, adding that they were in the process of going through that Thursday and determining what the final impact will be on customers.
According to Aqua numbers, average customers in Vermilion County using 4,500 gallons per month, with three and a half members in the household, will see a 6-cent per day increase.
A lower consumption user, one-member household, using 1,000 gallons per month will see a 38-cents per month increase or 1 cent per day.
“That helps the senior citizens and the single-family homes,” Ervin said about people on a fixed income.
A press release from the ICC stated the ICC issued an order approving about $6.549 million in additional revenue for Aqua Illinois, Inc. for the delivery of water service, and about $757,000 in additional revenue for sewer service.
These increases are 37.9 percent less than the $10.542 million the company requested for water service and 48.1 percent less than the $1.458 million the company requested for sewer service.
Actual bill impacts in the different service areas will vary depending upon monthly usage and meters.
In addition to Aqua’s rising cost of providing water and wastewater service, the commission took into consideration the company’s need to repair and replace aging infrastructure throughout its service territory. This order results in an 11.87 percent rate increase for water service and a 9.81 percent increase for sewer service, significantly less than the 19.10 percent rate increase the company originally requested for both water and sewer, according to the ICC.
In limiting the rate increases, the ICC made adjustments to Aqua’s proposed cost of non-regulated operating expenses, capital structure and cost of debt, employee benefits, pension expenses and cash working capital. Additionally, the commission reduced Aqua’s revenue requirement to reflect recent changes to the federal corporate income tax rate, ensuring that Aqua’s federal tax savings are passed on to customers.
The commission issued its decision in the case after consideration of evidence compiled during an 11-month review process, which began with a rate filing by Aqua on May 1, 2017. That evidence included detailed technical analysis by commission staff, as well as input from consumer advocates including the Citizens Utility Board and the Attorney General, and comments from ratepayers.
Attorney General Lisa Madigan pushed for every Illinois utility company to begin reducing customers’ bills immediately to pass on the companies’ savings under the new federal tax law that significantly lowers corporate tax rates.
The federal corporate income tax rate was lowered from 35 percent to 21 percent, effective Jan. 1.
Ervin said the corporate tax rate reduction as a result of the Tax Cuts and Jobs Act of 2017 resulted in a reduction of about $4 per month to the average customer’s water bill in this rate proceeding.
“We passed all that along to the customer,” he said.
Ervin also said Aqua doesn’t anticipate filing another rate case with the ICC for six to eight years, “unless something big happens.”
He also said they are pleased customers will receive a lower rate than expected.
Ervin said they understand customers don’t like to see any increase in their bills.
In addition to these rate reductions, Madigan asked the ICC to order Nicor and Aqua to set aside savings for customer refunds that are accumulating due to the new tax law. The ICC can require Illinois utilities to track these tax funds to assure that consumers receive the full benefit of the tax savings.
Aqua is a public utility that provides water and sewer service to about 73,000 customers in 13 Illinois counties, including Vermilion County.
Aqua is a wholly owned subsidiary of Aqua America, Inc. The commission also approved consolidation of Aqua’s six water divisions and four sewer divisions into one water division and one sewer division, respectively.
Aqua’s last local rate change occurred in February 2012. Aqua has invested nearly $20 million in capital improvements since the last rate filing in 2012.