YOUR WATER RATES
Water-service rates are based on the real costs of treating and delivering water to customers, and are regulated by state public utilities commissions (PUCs).
To determine rates, we work with PUC staffs to study costs of construction, maintenance, operation, administration and financing. Once the studies are complete, the company and PUC present any differing conclusions before an administrative law judge. Based on the judge’s opinion, the PUC sets the water rates.
Rates charged for service may vary based on a customer’s meter size and usage. Customers are billed based on a regular meter reading, either monthly or quarterly for residential customers as well as for commercial and other public authority customers.
Rates can vary based on the cost of providing service in the communities we serve. Before it reaches your home or business, water is treated through an intricate treating and testing process to help ensure it meets or surpasses rigorous drinking water quality standards.
You can learn more about the rate setting process in our white paper: Challenges In The Water Industry: The Rate Approval Process.
Information on Indiana American Water's Most Recent Rate Request - Cause No. 45870
On March 31, 2023, Indiana American Water filed a rate adjustment request with the Indiana Utility Regulatory Commission (IURC) reflecting $875 million in water and wastewater system investments to be made through 2025 to continue providing safe and reliable service as well as a significant increase in the cost of procuring chemicals, goods and services.
In the filing, Indiana American Water is seeking to increase revenues over a phased, three step process through May 2025 that would result in $86.7 million of additional annual revenue when fully implemented. If the company’s proposed rates are approved as requested, the bill for a typical residential customer using 4,000 gallons per month would increase approximately $14 per month when rates are fully implemented in 2025. The company last filed for new rates through a general rate filing in September 2018 and last implemented new rates in 2019.
The increases for residential wastewater customers will vary depending on the community served.
Results of a customer affordability study conducted as part of the filing demonstrate that the affordability of the company’s water and wastewater services as a comparison of monthly bills to monthly household income has steadily improved over the past decade and will remain affordable under the company’s proposed rates.
Recognizing that affordability may still be an issue for some customers, the company is proposing a new rate design that provides 1,500 gallons of water usage at no additional cost above the fixed monthly customer charge for all water customers. The proposed change would provide relatively low-cost basic water service for customers on fixed incomes that use a lower volume of water than the typical residential customer.
The filing also includes a proposed Universal Affordability Tariff to provide multiple tiers of discounts to address the affordability needs of different levels of household income. Under the new rate structure, eligible households would receive monthly bill discounts of between 30 and 80 percent for water service.
The ratemaking process is an open and thorough process with submissions of extensive financial and operational data documenting our investments and expenses. The IURC and other parties, including the Office of Utility Consumer Counselor (OUCC), the state agency representing ratepayer interests in these cases, scrutinize the information received from the company and customers.
The IURC’s rate review process offers multiple opportunities for customer involvement. Customers can participate through written comments, attendance at public input hearings, and consumer advocacy organizations that participate in the proceedings. There will be no immediate impact on rates while the regulatory process is underway. Final rates will not occur until the view process is completed, which generally takes approximately 10 months.
For customers facing a financial hardship, Indiana American Water offers payment plans and budget billing. Indiana American Water also provides information to customers about the Low-Income Household Water Assistance Plan (LIHWAP). More information can be found by clicking on the Low Income Program link under the Customer Service & Billing heading on the company’s website or by clicking here. For tips on how to reduce your water bill by conserving water, visit our Wise Water Use page at https://www.amwater.com/inaw/Water-Wastewater-Information/wise-water-use.
To learn more about the filing, you can view a news release with more details. You can also view information about the rate request at the Indiana Utility Regulatory Commission's Online Services Portal for Indiana American Water's docketed case.
Additional information is also available regarding the rate request and the bill impacts for typical residential customers in your community at the links below.
Distribution System Improvement Charge (DSIC) 14 Filing & Order (Cause No. 42351)
The Indiana Legislature, recognizing the critical need for water and wastewater infrastructure replacement, enacted legislation many years ago allowing water utilities to make periodic adjustments to their rates and charges to earn a return on eligible improvements and to recover depreciation expense on those improvements without filing a burdensome general rate case. The Distribution System Improvement Charge (DSIC) mechanism encourages water utilities to continue to invest in their distribution systems by reducing regulatory lag between investment in system improvements and recognition of that investment in rates. Other states have similar statutes.
The DSIC-14 filing is in addition to the surcharge already in place for DSIC-13 passed in 2022 and the DSIC-12 passed in 2021. The total DSIC charge will be $7.96 for a typical residential customer, a $4.78 increase (16 cents per day) over the existing charge and a 15.32% increase over Authorized Revenues combined for the three DSIC programs. The additional DSIC-14 request is related to additional net investment of more than $129.5 million in the company’s distribution system across the state. The surcharge would apply to all residential, commercial, other public authority, industrial, and sale for resale customers. Included in DSIC-14 are non-revenue producing projects placed in service up to November 30, 2022 that were not included in rate base in the company’s most recent DSIC-13 filing in 2022.
The projects typically covered by DSIC are replacements, relocations and reinforcement of existing water mains, valves, hydrants, customer service lines and meters, and tank rehabilitation & painting projects. Reinforcement infrastructure consists of new mains required to increase flow capacity to improve service where existing mains could not meet demands for fire service flows.
DSIC-14 was filed by Indiana American Water on January 20, 2023. A ruling on the request was issued on March 22, 2023, and will be effective March 23, 2023. When enacted, all Indiana American Water residential, commercial, other public authority, industrial, and sale for resale customers across the state will be affected by the surcharge. The surcharge will remain in effect until a rate order is received in a future general rate case filing and the projects included in the DSIC-14 will be rolled into that rate order.
Indiana American Water is dedicated to maintaining and improving the quality and reliability of the local water system. Part of that responsibility is making ongoing investments to our water distribution system. The DSIC helps complete the replacement of certain types of aging water infrastructure, which need to be upgraded to meet water service requirements and/or service standards.
The costs to make these necessary improvements will continue to increase over time. By investing today, we will save money in the long-term and ensure the reliability of our water infrastructure now and for future generations.
Additional information is available at the IURC's Online Services Portal.