Indiana American raising water rates
Move comes after approval from state utility commission
The cost of getting water from Indiana American Water will be going up soon, as the Indiana Utility Regulatory Commission approved the company’s latest rate increase.
The rate increase, approved Feb. 14, will happen in three increasing steps over the next 15 months.
For most Northwest Indiana customers — any with a ⅝-inch water meter using 4,000 gallons a month — the Step 1 increase will be about 3.8%, about $1.69 a month, an Indiana American Water spokesman said.
The second step increase, effective this May, will be 7.2%, $3.17 per month.
The third step increase, in May 2025, will be 9.6%, $5.34 per month.
There will be no rate increase for Lowell customers, spokesman Joe Loughmiller added in an email. Indiana American purchased the Lowell utility in late 2021.
An “affordability component” of the new rate design sets a fixed fee of $20 per month for a residential customer with a ⅝-inch meter who uses up to 1,500 gallons a month. Water use above 1,500 gallons a month will bring a volumetric charge in addition to the $20 per meter charge.
However, the IURC rejected the company’s proposal, backed by Citizens Action Coalition, for a tiered discount for low-income customers.
“We’re incredibly disappointed the commission rejected that proposal,” said Ben Inskeep, program director for Citizens Action Coalition.
The proposal would have provided three discount levels: up to 30% for customers with income at 100 to 150% of the federal poverty level; 50% discount for customers at 50 to 100% of the poverty level; and 80% for custom
“There simply is no way our citizens can maintain their quality of life with more rate increases piled on them.” Mayor Jerome Prince, in a news release
ers at zero to 50% of the poverty level.
The IURC rejected that proposal, even though it was backed by both Indiana American and Citizens Action Coalition, because the utility itself was not contributing to the program’s cost, which would have been borne by the customers.
Also, Inskeep said, the IURC believed there was a simpler and more efficient way to determine eligibility for the program. It encouraged Indiana American Water to base eligibility on another energy assistance program.
“They weren’t ruling out the possibility in the future,” Inskeep said of the low-income assistance program. “But we felt the commission could have directed those changes.”
He added that he hopes Indiana American Water “will be interested in working with us so we can get this program in place for the customers.
“Bill affordability is becoming a bigger and bigger issue for customers.”
Indiana American asked for a three-step, 31% increase in its operating revenue when it filed its rate case with the IURC in March 2023. It cited the approximately $875 million it was planning to invest in water and sewer improvements through April 2025.
The company asked the IURC to approve an $86 million increase in revenue, which would bring a 31% increase in rates over 16 months.
The IURC approved a $66.3 million revenue increase, an Indiana American Water news release said on Feb. 15. That’s about 77% of what the company asked for.
The company’s infrastructure improvements, cited in the rate case, included new meters and hydrants, new treatment plants in Winchester and Sheridan, a new storage tank in West Lafayette, and lead pipe replacements.
Several Northwest Indiana political leaders, including Gary’s then-Mayor Jerome Prince, Crown Point Mayor Pete Land and New Chicago Town Manager Sue Pelfrey spoke out against the proposed rate increase last year.
“There simply is no way our citizens can maintain their quality of life with more rate increases piled on them,” Prince said in news release calling for “reasonable and affordable” rates.
“You’re trying to get blood from a turnip,” said one of the Gary residents who spoke at a public hearing in Gary last July.