The Indiana Office of Utility Consumer Counselor is recommending a slightly lower rate increase than what Columbus City Utilities originally requested.
The OUCC filed four pieces of testimony Friday regarding the rate case. Utility analyst Thomas Malan wrote in his testimony that while city utilities has requested a 79.46% increase over the course of three phases, he and the office of the utility consumer counselor recommend an overall rate increase of 74.02% (while still utilizing a phase schedule).
“Columbus requests an overall 79.46% increase to generate $3,533,277 of additional operating revenue per year,” he wrote. “Columbus proposes this increase be implemented in three phases — with a Phase 1 increase of 43.66%, a Phase 2 increase of 16.78%, and a Phase 3 increase of 6.97%.”
The office, however, is recommending “an overall revenue increase of 74.02% to produce additional water revenues of $3,291,402 per year,” Malan wrote. He recommended the following increases:
43.66% for Phase 1 (Aug. 1, 2021)
12.99% for Phase 2 (Jan. 1, 2023)
7.21% for Phase 3 (Jan. 1, 2024)
In addition to Malan’s report, three other pieces of testimony were filed by the OUCC, which represents consumer interests in cases before the Indiana Utility Regulatory Commission. These testimonies included recommendations regarding revenue distribution between customer classes, borrowing, system development charges and the debt service reserve.
Utilities executive director Scott Dompke said that the department has talked with its rate consultants and attorneys and is reviewing the filed testimony.
“It looks to me like the OUCC (Indiana Office of Utility Consumer Counselor) generally accepted most of our request,” he said. “They accepted all of our capital costs. They accepted all of our maintenance expenses. And we will continue to study what they said and have a response in a week or so.”
OUCC director of External Affairs Anthony Swinger said that while the OUCC makes recommendations regarding rate increases, it is actually the IURC that makes the “final decision.” In this case, the OUCC has recommended approval of most of Columbus City Utilities’ request.
Under the increase originally proposed by the city utilities, water residential charges for a customer using 5,000 gallons per month would increase in August from $11.43 to $16.60. Those charges would later increase to $19.41 in January 2023 and $20.65 in January 2024.
The city “cites increases in operating and maintenance costs as reasons for its request, along with infrastructure improvements for which it seeks IURC approval to issue up to $22.2 million in bonds.” Projects planned include new wells, a new storage tank and distribution mains, lab and treatment plant improvements, new meters and more.
Utility analyst Shawn Dellinger recommended in his testimony that once the debt service reserve is fully funded (which is estimated to be August of 2026), rates should be reduced to reflect the change.
He also recommended “a true-up process so that rates will conform to the actual terms of the debt once issued.”
“Any adjustment to debt service would likely not affect Phase 1 rates,” Dellinger wrote. “… The true-up report will affect Phase 2 rates. The Phase 3 increase will not be affected by the terms of the borrowing.”
The testimony of utility analyst Kristen Willoughby, who wrote that the city utilities’ planned projects “justify its requested level of borrowing,” included comments submitted by four members of the public, both via email and through electronic submission forms.
All four individuals expressed concerns about a rate increase.
Marvin Scroggins wrote that citizens are “taxed to death in this town.”
“They want to double our water rate in three years time while we are still in a time of uncertainty with this pandemic?” he wrote. “I’m already having to pay more for schools which have been closed all year and now this? NO to a rate hike.”
One email writer was worried about the financial effects of a rate increase on senior citizens. Another, Jay Brooks, wrote that some of city utilities planned projects are not currently needed and that due to the pandemic, “It is not a good time for a rate increase.”
Robin Winters wrote, via electronic submission, that a “more reasonable rate increase of around 25%” would be more appropriate.
“While I understand that rates do need to be increased, I feel that a smaller increase should be considered given the uncertainty of the economy, business stability, and individuals’ employment status,” Winters said.
In addition to written testimony, which was due Dec. 8, members of the public also had the opportunity to speak at a field hearing on Dec. 2, though only one Columbus resident choose to do so.
Resident and CCU customer Mary Beth Clauss said that the rate increase would be another “financial burden” amid the struggles of COVID-19 and that the state should take that into account “when deciding when and how much you’re going to increase the rates.”
Rebuttal testimony is due on Jan. 6, and a regulatory evidentiary hearing is scheduled for Jan. 27. Closing briefs are expected in February and March, and a final order is expected next summer.
In most cases where the state commission approves an increase, the rate hike is less than what is originally requested. Dompke has said in the past that if the state approves an amended rate increase, the city council will have to vote to adopt the revised rate ordinance.
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More information about the water rate case, including links to filed testimony, is available at in.gov/oucc/2781.htm, and updates are available by subscribing at in.gov/oucc/news/.
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