Agreement Drastically Cuts Ind.-American Water Rate Hike
November 21, 2014 –The Indiana Office of Utility Consumer Counselor has reached a settlement agreement with Indiana American Water Company (IAWC) in the utility’s pending rate case. If approved, the agreement will allow for a small rate increase while dismissing a number of additional requests IAWC made in the case.
- IAWC would receive an increase of approximately 2.55 percent in its annual operating revenues. By comparison, the utility requested a 9.8 percent increase in January 2014. The OUCC filed testimony in May 2014 recommending a rate decrease based on the evidence pending at the time.
- IAWC’s current cost of equity would rise slightly, from 9.70 percent to 9.75 percent. The utility had asked that it be increased to 10.8 percent in this case.
- A moratorium on any new general rate case filings by IAWC would be in place until 2018. Under Indiana law, IAWC would otherwise be eligible to file a new rate case as early as April 2015.
- A pending subdocket including several additional requests from IAWC would be dismissed, including the utility’s request for an earnings rate sharing mechanism and revenue stability rate mechanism, effectively decoupling its rates. The utility’s efforts to make acquisition adjustments in this case would also be dismissed.