The state has authorized Columbus City Utilities to enact an overall water rate increase of almost 75% over the next three years.
The Indiana Utility Regulatory Commission approved a final order Monday authorizing the utilities’ proposed settlement regarding water rates.
The utilities filed the stipulation and settlement agreement in mid-January. It is an agreement between the utility, the Indiana Office of Utility Consumer Counselor (OUCC) and the Southwestern Bartholomew Water Corp. (which is an intervenor in the case and one of the city’s wholesale customers).
According to the final order, the commission found that the settlement is “reasonable, supported by substantial evidence, and in the public interest.”
“Based on the settlement and the supporting evidence presented in these proceedings, we find that (the City of Columbus) should be authorized to increase its rates and charges to produce additional revenue of $3,311,396, or an overall increase of 74.80%,” the order stated.
The approved settlement includes a rate increase in the following phases:
Phase 1: 44.30% increase (which goes into effect once the IURC issues an order in the case)
Phase 2: 12.99% increase (which goes into effect on Jan. 1, 2023)
Phase 3: 7.21% increase (which goes into effect on Jan. 1, 2024)
According to the final order, the city of Columbus must file tariff and rate schedules for approval by the commission’s water/wastewater division prior to enacting the approved rates.
The order itself “shall be effective on and after the date of its approval.”
The settlement states that while the rate of increase varies by customer class, no customer class should receive more than an approximate revenue increase of 113%.
Residential customers will see an increase of 70.52% under the proposed settlement. Large commercial customers will see the largest rate of increase at 112.90%. The total rate of increase across customer classes is 74.85%, according to the settlement.
The settlement also includes other items, such as authorizing Columbus to issue a principal amount of up to $22.2 million of long-term debt, subject to true-up.
“Because Petitioner (the City of Columbus) proposed limiting its Phase I rate increase, any adjustment in debt service would not likely affect Phase I rates and, as such, no true-up on Phase I is required,” wrote Doug Baldessari in his settlement testimony. “The Phase II rates and charges effective Jan. 1, 2023 and the Phase III rates effective Jan. 1, 2024 will be adjusted for a true-up.”
Baldessari is a certified public accountant and partner in the firm of Baker Tilly Municipal Advisors, LLC, which has been retained by city utilities for services related to its current water and sewer rate cases.
The city’s sewer utility is not regulated by the commission and therefore does not have to go through the same approval process for its rate increase proposal.
According to the OUCC’s website, the city “cites increases in operating and maintenance costs as reasons for its (water rate) 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.
The city utilities initially requested a 79.46% increase over three phases. City officials have said in the past that if the state approves an amended rate increase, city council will have to vote to adopt the revised rate ordinance.
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More information about Columbus City Utilities’ water rate case is available at www.in.gov/oucc/2781.htm. A copy of the final order is available at www.in.gov/iurc/docketed-cases/find-a-docketed-case/weekly-orders/.
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