State Utility Regulator Recommends Significantly Lower Rate Increase

By Scott Sarvay

State Utility Regulator Recommends Significantly Lower Rate Increase

August 31, 2010 Updated Aug 31, 2010 at 5:57 PM EDT

INDIANA (Indiana's NewsCenter) - The Indiana Office of Utility Consumer Counselor is recommending that the requested rate increase to Aqua Indiana customers be limited to a fraction of the amount.

(News Release) - Aqua Indiana's pending water and sewer rate increase requests should be reduced to a fraction of what the utility is seeking, according to the Indiana Office of Utility Consumer Counselor (OUCC).

In testimony filed today with the Indiana Utility Regulatory Commission (IURC), the OUCC recommends that the water rate increase for Utility Center, Inc, doing business as Aqua Indiana, Inc., be limited to 3.28 percent, compared to the 16.64 percent the utility is seeking. The OUCC is also recommending limiting the sewer rate increase to no more than 4.49 percent, compared to the 18.48 percent Aqua Indiana is requesting.

Combined water and sewer rates for a residential customer using 5,000 gallons per month would rise by $3.03 under the OUCC's recommendations. Aqua Indiana's proposal would increase the same customer’s combined monthly rates by $13.48.

Utility Center, Inc. - doing business as Aqua Indiana, Inc. - provides water and sewer service to more than 12,000 customers in southwestern Allen County and a portion of Whitley County.

After completing a 5-month accounting, engineering and legal review of Aqua Indiana's proposal, the OUCC acknowledges that the utility is entitled to a small revenue increase due to infrastructure projects that have been completed and are now in service. However, the OUCC does not agree with a number of requests in the utility’s case including:

· The proposed capital structure and return on equity.
· The net acquisition adjustment included in rate base.
· Recovery of Aqua Indiana's legal fees for a separate case (IURC Cause No. 43666) addressing the future of the Aboite wastewater treatment plant.
· Numerous line items pertaining to operating and maintenance expenses.

The OUCC has filed more than 700 consumer e-mails, letters and petition signatures regarding this case with the IURC. The comments were submitted to the OUCC in addition to comments received at the IURC's August 4, 2010 public field hearing in Fort Wayne.

Aqua Indiana is scheduled to file rebuttal testimony on September 16, 2010, with an evidentiary hearing for attorney and Commission questioning of technical witnesses to begin on October 5, 2010.

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