By Kayla Johnson
ILLINOIS (25 News) – Illinois American Water filed a $142.4 million rate hike request with the Illinois Commerce Commission, its fourth in a decade.
The Citizens Utility Board says testimony in the case flags at least $54.4 million in potential overcharges, citing concerns about shareholder profit levels, executive bonus costs and projected water-use assumptions.
If approved as proposed, Illinois American previously estimated the typical residential water customer using 3,500 gallons could pay about $14 more per month depending on location. Wastewater customers could see about $28 more.
CUB argues Illinois American is seeking an excessive shareholder profit rate and a higher financing mix that leans too heavily on stock-based equity.
“The company is pushing for an excessive profit rate for their shareholders. It’s currently at about 9.08%. They want to increase it to 10.75%, which would be among the highest profit rates for shareholders that any utility has in Illinois,” sad Jim Chilsen, communications director for the Citizens Utility Board.
CUB also challenges a proposed two-step approach that would place the largest portion of the increase in 2027, followed by a second wave the next year.
The watchdog says customers should not be asked to cover certain executive bonus costs tied to profit goals, along with what it calls flawed assumptions about future water usage.
“If there is a shortfall in how much water they expect to sell, that’s more money that they need from customers to make that difference in their per gallon rates. They are understanding how much water they are reasonably going to sell to overstate per gallon rates and make more money than they need,” said Eric DeBellis, general counsel for the Citizens Utility Board.
Illinois American Water disputes the premise that the request is unjustified. In a statement to 25News:
Illinois American Water’s rate request, submitted to the Illinois Commerce Commission (ICC), is the first step in a comprehensive, data-driven review process that includes multiple opportunities for public comment and stakeholder participation before a decision is made. No changes to customer rates occur unless and until approved by the ICC.
Illinois American Water’s proposal reflects the prudent, long-term investments needed to maintain safe, reliable water and wastewater service to customers. The rate request reinforces the company’s commitment to implementing critical system upgrades and continuing to improve water quality and reliability for its more than 1.3 million people served statewide. The proposed rate adjustment supports the company’s plans to invest approximately $577 million through 2027 to modernize and strengthen its water and wastewater systems in communities across Illinois. Investments include replacing aging pipes, upgrading treatment facilities, improving storage and pumping systems, and meeting evolving regulatory requirements.
At the same time, Illinois American Water remain committed to affordability and offers programs to assist income-eligible customers, including its Income-Based Discount Program, H2O Help to Others assistance program, budget billing options and flexible payment plans. Illinois American Water’s proposal additionally includes provisions to help manage costs for lower-usage customers.
By making prudent, ongoing investments, Illinois American Water is committed to protecting public health and safety in the communities we serve.
The rate case unfolds as American Water also seeks to extend its reach in Illinois. CUB is urging regulators to reject the proposed purchase of Aqua Illinois parent company, arguing it could significantly reduce competition in her private water market.
The ICC is expected to issue a final ruling on the Aqua-related deal no later than Nov. 5 and on the Illinois American rate request no later than Dec. 18.
For customers, the outcome could mean higher monthly bills or a scaled back increase, depending on what regulators decide.
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