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ICC approves rate increase for Illinois American Water Co.

Updated: October 24, 2012 6:37AM



Homer Glen residents, who long have complained about their water bills, can expect to start paying about 3 percent more next month, an official with Illinois American Water Co. said Friday.

That estimate is based on usage of 5,000 gallons per month and could vary.

The Illinois Commerce Commission approved higher rates for the company, which also serves other suburban and downstate communities. The rate increase takes effect Oct. 1.

Illinois American Water sought to increase its water and sewer revenues by $34.8 million annually, but the ICC reduced that to $17.9 million after an 11-month review. The rate increase should result in an 8.3 percent increase in Illinois American Water’s revenue, the ICC said.

The exact new rates are expected to be finalized by the ICC this week.

Customers will be mailed information about the new rates, but a typical residential customer in Illinois American Water’s Chicago Metro District who gets Lake Michigan water and wastewater treatment service and uses 5,000 gallons of water monthly will see an increase in their total bill of about 3 percent, according to Illinois American Water senior operations manager Michael Smyth.

The company’s last rate increase was in April 2010.

The company has a plan to stabilize rates over the long term, Smyth said. Going forward, nonproduction costs for water service — such as infrastructure improvements — will be spread among all 257,000 customers, he said. The Chicago Metro District includes 44,000 customers.

The new rates take into account about $180 million in infrastructure costs statewide, including about $29 million in its Chicago Metro District, which includes Homer Glen.

Homer Glen officials anticipated the rate increase and have formed a joint water agency with Bolingbrook, Romeoville, Woodridge and Lemont to try to acquire the water system, believing they can offer better rates. They have made the company an offer of $34 million, which they expect to be rejected. At that point, they would pursue acquisition of the system through eminent domain.



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