A consumer advocacy group says Illinois American Water's $152 million rate hike request to the state should be cut down to size — to the tune of around $50 million.
Jim Chilsen is a spokesman for the Citizens Utility Board.
"Consumers just want clean and affordable water. They should not have to cover frivolous bonuses for Illinois American executives, and an exorbitant profit rate for corporate shareholders," he said.
The water company wants to boost its return on equity for shareholders from the current 9.78% to 10.75%, and boost its common equity ratio, or financing through stocks, up to 52-54%.
CUB argues limiting those figures to 9.35% and 50% respectively would save ratepayers $27.8 million annually.
CUB says another $5.8 million would be saved by not using customer payments for executive bonuses, and $15.7 million by blocking the company from rolling out its rate increases in two steps rather than the usual one. Another $7 million would be shaved off by adopting recommendations made by Illinois Commerce Commission staff and the Illinois Attorney General's Office.
Illinois American Water is a private company serving 1.3 million customers, including those in the cities of Peoria and Pekin.
The new rates are estimated to increase the average customer's water rate by $24 a month, and wastewater rates by $3-5 monthly.
In a statement, Illinois American Water says testimony from consumer watchdogs like CUB is an expected part of the regulatory process before the Illinois Commerce Commission. The company said the request will support investments into water and wastewater systems through 2025.
"The request reinforces the company’s commitment to investing in its water and wastewater systems to replace aging infrastructure, provide reliable service, enhance water quality and comply with environmental regulations," the statement read.
The Illinois Commerce Commission is currently reviewing Illinois American Water's rate request. A final decision is expected in December.
Chilsen hopes the commission takes their testimony into account when making that call.
"This company has already received about $120 million in rate hikes since 2016. And its parent company has pulled in about $1.8 billion in profits over the last year," said Chilsen. Illinois American Water does not need another rate hike."
