Sarah Watson
Water rates for Iowa American Water customers will go up, but it's not yet clear exactly when or by how much.
The Iowa Utilities Commission has approved a rate increase for Iowa American Water but it will be less than the steep rate increases the utility applied for a year ago to pay for infrastructure projects.
Iowa American Water provides water service to about 70,000 customers in and around Clinton, Davenport, Dixon, Bettendorf, LeClaire, Riverdale, Panorama Park, Blue Grass and Donahue. Iowa American provides wastewater service to about 825 customers in and around Blue Grass and Donahue.
The order by the Iowa Utilities Commission approved a rate increase for Iowa American, but the effective date of the increase and financial impact on customer bills will be dependent on the company filling new documents that show the new rates and how they were calculated, according to a news release from the Iowa Utilities Commission.
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Iowa American filed an application with the Iowa Utilities Commission a year ago asking for a rate increase to bring in an annual revenue of $66.3 million for water service and $1.1 million for wastewater service. That would've been an increase of about $21.1 million for water service and $615,000 for wastewater service over the previous year. The rates they requested would have increased a typical monthly residential bill by about $22.
The commission took public comments, conducted public meetings and held a week-long hearing proceeding.
The commission ultimately approved an annual revenue of about $58.7 million for water service and about $1 million for wastewater service, according to the utilities board. That is an increase, but is less than originally proposed.
The commission approved a surcharge for infrastructure with some stipulations, but denied a new alternative rate design mechanism.
The commission's order approves a return on equity of 9.6% and denies Iowa American's request to shift a portion of its wastewater revenue requirement to water customers.
The order also requires Iowa-American to:
file an updated cost of service study, revenue allocation, rate calculations, and proof of revenue. The proof of revenue is required to show the percentage of rate increase by customer class.issue a refund of the amount Iowa American over-collected from customers in interim rates, with interest. Within 20 days, Iowa American must file the amount of the interim rates collected, the amount collected per customer class and the proposed refund amount that each customer class is expected to receive as a bill credit in an upcoming month.file a capital investment plan followed by a stakeholder meeting.
To read the full order, click here.
The rate request was filed on May 1, 2024, and was primarily driven by $157 million in infrastructure investment in treatment and distribution system upgrades since its last rate filing, according to the utility.
"We are committed to making appropriate investments to continue to provide safe, clean, reliable, and affordable services," said Brad Nielsen, president of Iowa American Water, in a news release. "Our effective capital planning and consistent focus on efficiently operating our systems keep our water and wastewater services compliant with state and federal regulations for the benefit of the customers and communities we serve in Iowa."
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Davenport, Scott County, local politics
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