Water utilities could fund their empires with higher rates

May 2, 2013 | By Barbara Vergetis Lundin

Legislation that would allow the Illinois biggest private water companies, Illinois American Water and Aqua Illinois, to fast-track takeovers of municipal water systems and automatically charge current customers higher rates to fund those acquisitions has moved quickly through Springfield, Ill. House Bill 1379 has passed the Illinois House 77-31, and could be voted on by the Senate as early as next week.

Currently the Public Utilities Act requires that acquisitions of municipal water systems not have an "adverse rate impact" on consumers. HB 1379 would allow the companies to automatically raise their existing customers' rates by 2.5 percent for one acquisition or a total of 5 percent for multiple acquisitions -- bypassing an 11-month process water companies must follow to ask for higher rates.

Utility watchdog Citizens Utility Board (CUB) sees this as a "damaging and unnecessary" bill.

"This legislation would leave Illinois American Water and Aqua Illinois customers vulnerable to a wave of rising water bills," CUB Executive Director David Kolata said. "The current regulatory system already allows private companies to purchase municipal water systems, while at the same time protecting consumers from automatic rate increases."

CUB is supporting an amendment that would require any privatization to first be approved by local referendum -- a development water utilities are not happy with.

For more:
- see the bill

http://www.fierceenergy.com/story/water-utilities-could-fund-their-empires-higher-rates/2013-05-02