Citizens gets state OK for steep wastewater rate hike

State regulators on Wednesday approved a rate hike that will increase monthly wastewater bills by about 26 percent, or close to $14 on average, for Citizens Energy Group customers.

In all, Citizens received approval to generate about $50.6 million in new annual revenue.

The rate increases will come in two phases.

Effective immediately, Citizens will increase its wastewater revenue by 21.08 percent, or $38.25 million. Revenue will increase another 5.61 percent in October.

Rates will increase by different amounts based on the types of customers. Residential, commercial or industrial all pay different rates.

The first phase will increase rates “less than $10” per month for average residential customers starting in May, Citizens spokeswoman Sarah Holsapple said. Then bills will increase “less than $4” on average in October for residential customers, she said.

“We are concerned about the impact of rate increases and have programs in place to help those in need,” Citizens said in a prepared statement issued after the ruling by the Indiana Utility Regulatory Commission.

Citizens sought the rate increase in response to a 2006 order the U.S. Environmental Protection Agency issued to the city of Indianapolis, who owned the wastewater utility at the time.

“Underinvestment over the past 100 years has resulted in an antiquated sewer system that is discharging four billion gallons of raw sewage per year into waterways,” Citizens said. “The wastewater rate increase will allow Citizens to continue our program to virtually eliminate sewer overflows by the year 2025.  It will also allow us to continue eliminating failing septic tanks that are endangering human health and the environment across Marion County.”

In a separate statement, the Indiana Office Utility Consumer Counselor said it understood the need for rate increases. The utility’s plans to address sewage overflows and federal mandates seemed to be a “reasonable approach.”

“We realize rate increases are never popular,” the office said. “However, today’s order will allow the sewer utility to complete a number of major infrastructure projects that are vital to public health.”

Part of the IURC’s order on Wednesday disallowed another $1.1 million Citizens sought in reimbursements.

Regulators denied the piece of funding because it related to executive compensation, which has been an ongoing concern.

The IURC issued a similar admonishment to Citizens in March when commissioners approved a 9-percent rate hike for its water utility.