Iowa American Water Requests Rate Increase
April 29, 2016 at 16:17 PM EDT
Iowa American Water Company filed an application with the Iowa Utilities Board (IUB) today to adjust the rates its customers pay for water service in its Clinton and Iowa Quad Cities service areas. The utility’s last request for a water rate increase was in April 2013.
Iowa American Water’s investment of over $38 million in water system improvements is one of the primary drivers behind the rate request. All of the investments made in local water infrastructure systems enhance water quality, service reliability and fire protection for customers while keeping the cost of water service for most local households at about one penny per gallon.
“Since our last rate case, Iowa American Water has continued to implement efficiencies and best practices throughout the business to reduce our operations and maintenance expenses,” said Iowa American Water President Randy Moore. “This has enabled us to reduce our operating expenses through December 2015 by almost 10 percent or $1.7 million.”
In addition, Moore notes that proactive water system upgrades save money in the long run. “By continually improving our water systems, we help reduce the frequency of service interruptions and enhance fire protection,” he said.
The need to upgrade water systems is a national issue. The American Society of Civil Engineers says that an estimated $1 trillion in capital spending will be needed across the nation over the next few decades to replace thousands of miles of pipe, upgrade treatment plants and comply with stricter water quality standards.
Some of Iowa American Water’s largest projects and investments include:
Iowa American Water’s rates are based on the cost of providing water service as reviewed and approved by the IUB. If approved, the rate request would increase a typical monthly residential water bill for a customer using 3,870 gallons per month by $5.10 from $33.26 to $38.36—that’s an increase of about 17 cents per day for reliable, high quality water delivered to their tap 365 days a year/24 hours a day.
“The communities we serve rely on us to provide reliable, quality water service to support their local economies and to provide a high quality of life for residents,” Moore added. “The investments we make in our systems help ensure that we are able to fulfill that commitment to the health and prosperity of our customers and communities.”
The IUB will conduct an extensive review of Iowa American Water’s rate application. Because the IUB can take up to ten months for a decision to be rendered on the case, Iowa American Water intends to put a portion of the requested increase into effect on May 9, 2016 as an “interim” or temporary rate increase while its full request is reviewed. Temporary rates are subject to refund with interest if the IUB approves a final increase that is less than the temporary rates established.
Public hearings and opportunities for public comment are also part of the process and will be scheduled in the company’s service areas under the direction of the IUB.
About Iowa American Water
Iowa American Water, a subsidiary of American Water Works Company, Inc. (NYSE: AWK), is the largest investor-owned water utility in the state, providing high-quality and reliable water services to approximately 200,000 people. American Water is the largest and most geographically diverse publicly traded U.S. water and wastewater utility company. Marking its 130th anniversary this year, the company employs 6,700 dedicated professionals who provide regulated and market-based drinking water, wastewater and other related services to an estimated 15 million people in 47 states and Ontario, Canada. More information can be found at www.amwater.com.