Indiana American Water is requesting a statewide rate hike that would increase bills for Northwest Indiana customers by 17.2 percent.
The rate hike would pay for replacing aging pipe, treatment plant projects, and storage tank renovations, according to Indiana American Water. In all, the company intends to invest $221 million in projects across the state, with $53 million of that spent in Northwest Indiana.
"It's totally related to infrastructure improvements we are making in Northwest Indiana and across the state," said Indiana American Water spokesman Joe Loughmiller.
The company's proposal would increase its annual operating revenue by $19.6 million, or about 9.8 percent.
Indiana American Water filed its request with the Indiana Utility Regulatory Commission in late January. The IURC will rule on the request by November. The city of Crown Point and others are expected to file testimony in the case in advance of an evidentiary hearing before the commission.
The Indiana Office of Utility Consumer Counselor is now taking public comment on the requested rate hike.
The office advocates for consumers in cases before the IURC. It has not yet taken a position in the Indiana American Water case but expects to file testimony with the commission on May 2.
The Northwest Indiana increase would apply to direct customers of Indiana American Water in Gary, Hobart, Merrillville, Chesterton, Burns Harbor, Portage, Porter, South Haven, and Winfield. It will also apply to those in the Shorewood Forest subdivision and White Oak conservancy district west of Valparaiso.
Other rate increases would apply for businesses, industries and municipalities that receive Indiana American Water's wholesale services. Those communities include Schererville, Crown Point, Lake Station, New Chicago, Ogden Dunes and Indiana Water Services Inc., which serves parts of Merrillville and Schererville.
Most of Indiana American Water's direct Northwest Indiana customers are billed every other month. The requested rate increase would hike the bill of a typical Northwest Indiana customer using 10,000 gallons to $79.48 from the current charge of $67.81.
Under its request, Indiana American Water would start billing Northwest Indiana customers monthly in 2015.
That change is being done to bring billing practices in Northwest Indiana in line with how Indiana American Water bills customers in the rest of the state.
The projected bill increase of 17.2 percent in Northwest Indiana is much larger than the 6.4 percent increase requested in most other parts of the state served by Indiana American Water.
That is also due to the company's effort to standardize rates and billing, Loughmiller said. The 17.2 percent Northwest Indiana increase would bring rates here into line with what Indiana American Water customers are paying elsewhere in the state, Loughmiller said.
The increases would be even larger without belt-tightening done by Indiana American in recent years, Lougmiller said. The company reduced net operating expenses by $7 million from 2010 to 2015.