In the suburbs, proposed water rates spark outrage from residents, advocates

[July 26, 2024]  By ANDREW ADAMS
Capitol News Illinois
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BOLINGBROOK – Residents of Chicago’s southwest suburbs, alongside local and state elected officials, shared their anger over a proposed water rate increase this week, describing it as “outrageous” and “ridiculous.”

At issue was a proposed rate increase that would drive the average monthly bill for residential customers of Illinois American Water up by nearly $30. Illinois American, which serves about 1.3 million people across the entire state, is one of two privately held water utilities seeking rate increases before state regulators.

The Monday hearing in Bolingbrook, attended by well over 300 people, was the second in a series of three public forums on proposed water rate increases held by the Illinois Commerce Commission – the state body responsible for reviewing and either approving, modifying or denying utility rate changes. It followed hearings in Jerseyville and Champaign, which drew smaller crowds of about two dozen at each.

In its January request to increase rates, Illinois American said it was needed to pay for infrastructure investments.

“Rate increases are never popular and we understand that,” Illinois American Water President Rebecca Losli said Monday. “But we cannot ignore the infrastructure needs of our water and wastewater systems.”

Losli said the $557 million in infrastructure spending outlined in the rate increase would go to projects like lead pipe replacement and upgrading the pump stations that move water throughout its system.

In a “report card” published early last year, the American Society of Civil Engineers gave Illinois a “C-” grade for its drinking water infrastructure, citing challenges related to replacing lead service lines. The group gave Illinois’ wastewater systems a “D+,” pointing to aging facilities that manage waste.

The ICC is expected to issue a decision in the Illinois American Water case by the end of the year, with new water rates going into effect shortly after.

A spokesperson for the regulatory body said that the ICC commissioners, in practice, take the number and general tenor of public comments like those gathered at the recent hearings into consideration, but are barred from using them to resolve factual disputes.

At Monday’s hearing, area residents lodged often passionate complaints, with all but one speaker opposing the request.

Pat Smith, a nearby resident, said her family installed new insulation and upgraded windows to reduce energy costs, but struggled to reduce its water bill.

“We only bathe or shower twice a week now. We do dishes – a week and a half. I combine clothes for laundry and do it every two weeks. We don’t water outside,” Smith said. “I’m not sure what else I can do to reduce water consumption.”

Cindy Zacharias, a registered nurse from Bolingbrook, noted the number of people, particularly older people on fixed incomes, who spoke before her and described struggling to pay their water bills.

“To have somebody say they can’t flush their toilet to save water?” Zacharias said, pointing to Illinois American executives at the hearing. “That they have to make a decision to pay a bill and not buy food is shame on all of you.”

Affordability concerns for those on fixed incomes is part of why AARP Illinois, a group that advocates for the interests of those over age 55, became involved in the cases. While they aren’t challenging the proposals formally, they did request the public hearings.

Bill Malcolm, AARP’s national government affairs director, was in Champaign on Tuesday, where he noted the group’s opposition to the proposal’s increased fixed monthly charges – the portion of the water bill that is charged regardless of how much water is used. Under Illinois American Water’s proposal, those would rise from $17.98 to $26.12, according to AARP.

“When you have a high fixed charge like that, it makes controlling your water bill more difficult,” he said.

Additionally, Malcolm noted his group’s objection to several “riders” in the Illinois American Water proposal. These are separate agreements outside of the normal rate request system that would allow the utility to modify its rates or guarantee portions of future requests would be granted.

Illinois American Water’s request includes riders that would allow them to automatically adjust rates to pay for costs associated with regulatory compliance with a low-income discount program, according to Malcolm.

Illinois American Water President Rebecca Losli describes her company’s requested rate increase at a public hearing hosted by the Illinois Commerce Commission in Champaign. (Capitol News Illinois photo by Andrew Adams)

After the hearing, Malcolm said that American Water, the Illinois utility’s parent company, had filed similar rate requests through subsidiaries in Pennsylvania, Missouri, Kentucky, Indiana and Iowa.

Other consumer advocates, like those at the Citizens Utility Board, are formally involved in the rate cases as “intervenors,” meaning they can submit legal briefs challenging the utility’s claims and provide evidence that ICC commissioners might consider when making their ruling.

CUB’s main legal argument against the increase is that the requested profit rate from the company – 10.75 percent, up from 9.78 percent – is excessive and out of line with industry standards. CUB also argues that the company – not customers – should cover the costs for certain bonuses tied to reaching financial goals.

“Those bonuses don’t benefit customers and yet they want them to pay for it for no reason than profit earners – the shareholders – don’t want to give up any part of the profit,” Laura Loyd, a lawyer with CUB, said in an interview.

Anna Kubas, a spokesperson for Illinois American Water, said Tuesday that the bonus structure reflected “market rates” for executives and employees.

Homer Glen Mayor Christina Neitzke-Troike was at Monday’s hearing, where she railed against the company. During her public comment, she asked some audience members how much they pay in monthly water bills.

“256!” one person called out.

“300, if I don’t water my grass,” another said.

“Mine’s $350 a month,” Neitzke-Troike said.

Homer Glen has a long history with Illinois American Water. The village was part of a yearslong legal battle to control the pipeline that brings water from Lake Michigan to the area. The complicated agreements between the water utility and individual municipalities along that pipeline contribute to higher-than-average water prices in the region.

“Residents are in an uproar,” Neitzke-Troike said in a follow-up interview.

Despite the vocal opposition, she worries that it won’t translate to action from regulators.

“Unfortunately, honestly,” Neitzke-Troike said. “I don’t think things are going to change.”

This attitude has led some to call for more radical changes to curb further increases to water prices in the area.

Randy Juras, of Homer Glen, told the ICC on Monday that the water utility needed to be “legislated against.”

“The end result has to be coming from Springfield. Somebody has to put the reins on you guys,” Juras said, referring to Illinois American Water executives in attendance.

Pending legislation in Springfield would strengthen oversight on water utility spending and make it more difficult for water companies to purchase publicly-owned water systems – a contributing factor to increasing water rates.

Sen. Rachel Ventura, D-Joliet, and Rep. Dagmara Avelar, D-Romeoville, were both in attendance Monday night and spoke out against the rate increase.

Both lawmakers support those changes, with Avelar introducing one of the bills that would end a program that allows utilities to increase rates for infrastructure spending without prior oversight.

While none of those proposals gained traction in the legislative session that concluded in May, neither did a proposal that would have hastened the process of utilities privatizing public water systems.

In a separate proceeding, Aqua Illinois, which serves 273,000 people, is seeking a $19.2 million increase. That would bring with it $29.91 in bill increases, according to CUB. Two hearings on the Aqua Illinois case are scheduled for July 29 at McHenry County College in Crystal Lake and for Aug. 1 at Olivet Nazarene University in Bourbonnais.

Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to hundreds of print and broadcast outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation, along with major contributions from the Illinois Broadcasters Foundation and Southern Illinois Editorial Association.