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Posted on Tue. Aug. 14, 2007 - 06:00 am EDT

Aqua Indiana seeks 100% rate hike

Private utility says increase needed to offset upgrades; city plans fight

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To recoup $30 million of investment in its utility infrastructure, Aqua Indiana is seeking approval to double its customers’ bills next year, but Fort Wayne officials pledged to fight what they called an unreasonable increase.

The private utility Monday announced it filed a petition with the Indiana Utility Regulatory Commission requesting a 100 percent increase in water and sewer rates.

Typical residential customers would see their monthly water bill jump from $17.82 to $35.64 and their monthly sewage bill would increase from $24.77 to $49.54 under the proposal. Bill Etzler, vice president and regional manager for Aqua Indiana, said the increase primarily will allow the company to recoup $30 million in infrastructure improvements after taking it over from the former owners, Utility Center. He said that averages about $900 in investment per customer.

“We spent the last four years basically cleaning up all of the problems we had and invested the money,” he said.

If the increase is approved by the state, it would likely be September 2008 before it took effect, Etzler said. Aqua Indiana serves about 34,000 people in Allen, Huntington and Whitley counties. The vast majority live in Allen County, and about 80 percent live in Fort Wayne.

The rate increase announcement comes two months after residents in Aboite Township – many who are Aqua Indiana customers – learned their property taxes increased almost 60 percent. The tax increase was primarily caused by the area being annexed into Fort Wayne last year, which many residents opposed.

Their new layer of government, however, plans to fight the rate increase. Greg Meszaros, director of City Utilities, said Fort Wayne will “actively participate” in Aqua Indiana’s rate case to make sure residents get the best value. He said he understood that utilities need to increase rates to pay for improvements, but he said the proposal would give Aqua Indiana customers some of the highest rates in the state.

Meszaros didn’t buy the rationale that this large of an increase was needed for previous improvements.

“They put all this money in the system? They still have crappy water,” Meszaros said. “They knew what they were getting into when they bought (the utility.) When is enough enough?”

Meszaros said the city gets numerous complaint calls from Aqua Indiana customers about poor water quality. He said the proposal would force residents to pay up to $700 a year more than their neighbors on city sewer and water.

Etzler said full rate increases are rarely given by the state, and he wouldn’t say how long the new rates would last. The city, which raised water and sewer rates 25 percent in the past year, has said sewage rates would have to be re-examined in 2009.

The city started an eminent domain action in 2002 to acquire the Aqua Indiana north system, which serves about 11,000 customers, many of whom have been annexed into Fort Wayne. In April 2006, the city revealed it had spent more than $1.2 million in legal fees since 2003 in its attempt to acquire the utility. This summer, the Indiana Supreme Court ruled in a 3-2 vote that the city can take the utility through eminent domain.

Meszaros, who is leaving the city for a similar job in Austin, Texas, next month, said the rate increase will only push Fort Wayne officials harder to take over the private utility.

“This just to me emphasized the value we can bring to our community by acquiring this system,” he said.

Etzler said the rate increase and the city’s attempt to acquire part of the utility are two separate issues.

“Given the fact that we have invested so much money and technical expertise to fix Utility Center’s past problems, it seems ironic that city would want to force the sale of this well-managed operation,” he said in a statement.

Etzler said the private utility and the state would schedule a pre-hearing conference in the next two months. A public hearing to debate the proposal would then be set.

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