Private water utilities seek to open spigot for more rate hikes

As if raking in rampant rate hikes weren’t enough, Illinois’ largest private water utilities are now advancing a troubling proposal that would open the spigot to even more increases. Residents frustrated with escalating water bills — and there are plenty in Illinois — will be furious about House Bill 1828.

The bill, which was recently called by the Public Utilities Committee, would allow top private water utilities — Illinois American Water, Aqua Illinois and Prairie Path — to charge their customers for services they aren’t even receiving.

For example, most Illinois American customers get water service from the private utility, but wastewater service from their municipality. HB 1828 would make it so that the private utilities could ask the Illinois Commerce Commission to also put wastewater charges on water bills.

To say this is a bad bill would be an understatement. And even though Illinois American’s president laughably testified at a committee hearing that the proposed legislation "is not a rate increase bill," nothing could be further from the truth. And it won’t hold water with customers who have suffered through a series of bad water proposals.

Past General Assemblies have allowed private utilities to burden bills with a "qualifying infrastructure plant" surcharge that allows the companies to increase bills at a faster pace than the traditional regulatory system usually allows. And under a law passed in 2013, Aqua and Illinois American are allowed to charge customers for 100% of their acquisitions of municipal water and wastewater systems. Backed by this deal, Illinois American and Aqua have marched across the state buying up cash-strapped municipal systems. The Citizens Utility Board has tracked this buying spree, at CUBWaterTracker.com, and Illinois consumers have now covered 59 acquisitions for a total of $402 million.

This has been devastating to their customers — one senior at an ICC forum last year said she’s so worried about water bills that she limits bathing — but a boon to Big Water. Just last year, Aqua received an $11.6 million rate hike as its parent company made $595 million, about a 20% increase from the year before. Illinois American was awarded a $110 million rate hike last year — to go along with $120 million in additional hikes Illinois’ biggest private water utility has raked in since 2016. And its parent company is rolling, increasing profits by 11% to about $1.1 billion last year.

No doubt, CUB also hears complaints about municipal water/wastewater systems — but too often privatization means higher bills. In a 2017 investigation, the Chicago Tribune reported that Illinois American and Aqua slapped customers with rates 20% to 70% higher than the rates of municipal systems using the same Lake Michigan water.

In recent years, CUB has pushed for an end to rampant private water rate hikes by eliminating the qualifying infrastructure plant charge, and requiring shareholders to pay the majority (at least 80%) of the price tag of municipal acquisitions. And those reforms — in the current legislative session they are part of Senate Bill 75 — are slowly but surely gaining traction.

But HB 1828 would be a huge step backward for utility customers who already struggle to afford their bills. CUB strongly encourages you to contact your state representative and communicate your displeasure at HB 1828. After years of runaway private water rate hikes, we don’t have the money the utilities do, that’s for sure. But we do have our voices.

Bryan McDaniel is director of governmental affairs at the Citizens Utility Board.

The views and opinions expressed by contributors are their own and do not necessarily reflect those of the Chicago Sun-Times or any of its affiliates.

The Sun-Times welcomes letters to the editor and op-eds. See our guidelines.

Get Opinions content delivered to your inbox.