URBANA — The city will intervene in an Illinois American Water proposal that officials say could add 18 percent to residents' water bills.
The city council voted 6-1 to commit as much as $8,000 in legal fees to a cooperative effort among area municipalities to fight the Illinois American Water proposal. The water company said in November that it was asking the commission for an increase in rates that would cost a residential customer using 4,500 gallons per month an extra $7.21.
"Certainly this rate increase, on top of the fact that rates have really doubled in the past few years when you consider all the increases, is really a burden on people," said Alderman Brandon Bowersox, D-Ward 4.
Overall, the water company is asking for a rate hike that would affect 308,000 customers and would total $38 million in new revenues, according to Chief of Staff Mike Monson.
Chris Bacon, external affairs manager with Illinois American Water, said after the vote that the rate hike "makes sense." The utility plans to spend $180 million statewide on improvements to fire hydrants, water mains and meters, and $17.9 million worth of improvements are in the Champaign area.
Of the new revenues, $10.5 million would go to compensate for a decline in water use among the utility's customers. Alderman Charlie Smyth, D-Ward 1, said that part of the request is "inappropriate."
"It really bothers me that people who have conserved, cut their costs, are going to be punished as a result of this rate increase," Smyth said.
The city plans to retain a Chicago attorney to fight the proposal in front of the Illinois Commerce Commission, an oversight board that regulates the state's utilities. The ICC hearing is an 11-month process, and the city's intervention could help lessen the rate increase.
Alderwoman Heather Stevenson, R-Ward 6, was Tuesday night's dissenting vote, and she thinks the $8,000 in legal fees could be spent another way. The money is Urbana's share of what could be a total $25,000 legal action, the cost of which would be shared on a per capita basis by a handful of area municipalities.
"The city's in financial straits to begin with, and to spend $8,000 that's not a guarantee, I think, is being a little shortsighted," she said.