Waterworks proposes 35-percent rate hike

The Indianapolis Department of Waterworks today unveiled a capital-improvements proposal that would raise water rates for
the average residential customer by 35 percent, or $8 a month.

The proposed projects totaling $111 million were
filed with the Indiana Utility Regulatory Commission, which must weigh whether to approve all or part of the amount. That
could take a year.

The largest single infrastructure project amounts to $31.9 million in general distribution-system
improvements over 4,264 miles of water mains.

The department also wants to spend $27.5 million to build an alternative
intake for the White River Treatment Plant northwest of downtown. Currently, most of the plant’s water comes from White
River in Broad Ripple, via the 7-mile Central Canal.

The department seeks an alternative source in the event the
canal or a key dam on the White River happens to fail, and as a backup during maintenance. The canal system would still be
the primary source, as it moves water by gravity versus the need for a pumping station.

An additional $1.1 million
is sought to make improvements to the dam on the White River, resulting from damage to its concrete apron last February.

The other big capital request is $23.2 million to add water-disinfection systems at the department’s other water
plants to comply with stricter Environmental Protection Agency mandates.

Earlier this year, the city won a 12-percent
emergency rate hike from the IURC, having initially sought nearly 18 percent. The emergency hike was the fallout of a failed
bond refinancing strategy undertaken by the city a few years ago that put the bulk of the water utility’s debt in variable-rate
bonds. Costs soared after the meltdown of financial markets last year.

Indianapolis Mayor Greg Ballard this summer
sought ideas on how to reduce costs of the city’s water and sewer systems. The city has received proposals ranging from
selling the utilities to Indianapolis-based Citizens Energy to various new management schemes by private firms.

If approved as submitted, the average monthly residential bill would rise to $31.33 from $23.22.