SPRINGFIELD — Illinois American Water Co., which serves Champaign, Urbana, Savoy, St. Joseph, Tuscola, Arcola and a number of smaller area communities, is requesting its third major rate increase in four years.
If the rate request is granted in its entirety by the Illinois Commerce Commission, it would mean that Illinois American's local rates would have more than doubled since the fall of 2007. The ICC has 11 months to consider the case.
On Thursday Illinois American filed a $180 million rate case ($17.9 million of which is related to local expenses). It would increase rates for its 51,000-plus Champaign-Urbana area customers by about $7.21 a month.
The company says its typical local customer uses 4,500 gallons of water a month. That customer's monthly cost, under the rate case, would increase to $43.65.
In the fall of 2007 the water company's local customers paid $25.28 a month for 6,000 gallons of water.
Urbana Mayor Laurel Prussing, a longtime critic of the water company, renewed her suggestion that the New Jersey-based water company become municipally owned.
"A group of cities further north of here, which includes Bolingbrook, got a law passed that they could together go for eminent domain. I just think we'd be better off if we owned (the water company). But that would be a big project," Prussing said.
"I think that cities that own their own utilities do better financially for the customers and the city. You're keeping the money locally. That's what I think we should be doing," the mayor added. "Maybe the new mayor in Champaign (Don Gerard) would be interested."
Jerry Schweighart, the last mayor of Champaign, was not a supporter of municipal ownership of the water company. Gerard was less than enthusiastic about the idea on Thursday.
"I've always been interested in exploring the possibility of municipal ownership, but with all of the other things going on now at the city I think it's one of those things that will have to go to the back," he said.
Prussing admitted that purchasing the water company is a "long range project. We're very far from that."
But she said she believed the city government would file as an opponent to the new rate increase before the commerce commission.
"The public really can't do that, but we have the legal staff and we've saved the taxpayers a lot of money by doing that," Prussing said.
Gerard said he would discuss intervening in the rate case with the city's professional staff.
The water company needs the rate increase to help pay for nearly $18 million in local improvements, including upgrades costing more than $5 million at its Mattis Avenue treatment plant, plus new fire hydrants, valves, meters and more than four miles of new water mains, said Chris Bacon, the company's external affairs manager.
"We've always provided water at EPA standards, but EPA made a recommendation for improvements at our facility so we complied with those requests," Bacon said. "That was a big driver in regards to the rate increase. And the costs associated with that are not in our current rate base."
He said the company is "trying to do its best to stabilize our rates and rate structure, and still make the improvements we need to make.
"But water is still a good value. It's still about a penny a gallon for water service."