Bloomington residents will see a roughly 14% increase in water bills in August, while businesses, Indiana University and other large users face significantly steeper hikes under a rate plan approved by state regulators.
The City of Bloomington Utilities had argued that businesses, IU, IU Health and other large customers have long been paying less than their share — to the detriment of residential customers, who have had to pay more than their share.
However, a local business leader said the settlement has shifted a “disproportionate share of costs onto businesses” — and they will have little choice but to pass those costs to customers.
IU, other large customers and wholesale water providers had formally challenged the city’s plan in proceedings before the Indiana Utility Regulatory Commission this year, raising concerns about the size of the requested increase and the redistribution of costs.
However, the IURC largely signed off on the city’s cost shifting plan, though it scaled back most of the city’s initial rate hike requests. The city initially sought a 30.5% systemwide revenue increase, but the settlement reduced that to 25% and limited the residential impact to about 14% on a typical bill.
“The agreed allocation … reflects movement toward cost-based rates, and incorporates gradualism to mitigate rate impacts,” state regulators said.
That’s government speak for making sure large and high-demand customers pay more of their true share of costs, while phasing the increases in so they’re not too abrupt.
In total, the settlement between the parties approved by the IURC will allow CBU to generate about $5.4 million in additional revenue per year, with residential customers paying for about 25% of that increase, and business customers and IU paying about 50%. Irrigation customers will pay for about 15% of the increase. Those include some residential customers with private irrigation systems.
Wholesale customers, such as Southern Monroe Water and Washington Township Water, used the most Bloomington water last year, about 1.17 billion gallons, followed by apartment complexes at 1.06 billion gallons. Indiana University alone used about 622 million gallons — more than all commercial customers combined. The public authority class, which includes accounts for schools and city and county governments, used the least, at about 72 million gallons.
A consultant for the city told the Bloomington Utilities Service Board last summer that the city utility’s revenue is not enough to cover rising operational costs and planned expenses to repair and replace aging infrastructure.
CBU Director Katherine Zaiger said in a news release last month that the hike will allow the utility to address critical infrastructure needs to “ensure CBU can continue meeting the community’s water needs now and in the future.” The additional revenue will help pay for aging water mains, upgrades to storage and treatment processes as well as better monitoring equipment.
CBU said a typical residential customer that uses 3,000 gallons of water per month will, starting in August, pay $29.78 per month, up $3.72 or 14.3% from before. The residential usage rate will increase from $4.38 to $5.27 per 1,000 gallons, though fixed meter charges will moderate the impact on total bills.
IU will see its discounted bulk-rate “master meter” increase by about 45%, while rates for its other campus meters will rise about 38%. Rates for commercial and industrial customers will rise about 38% to 48%, to $5.49 per 1,000 gallons.
CBU said in an email that as water usage varies widely among industrial/commercial users, it could not provide a representative “average” bill for those customers.
Eric Spoonmore, president and CEO of the Greater Bloomington Chamber of Commerce, said the organization, which represents about 900 members, is “deeply disappointed” in the IURC’s decision to shift costs.
Spoonmore said via email that while residential customers appear to have received a break compared to businesses, he said higher costs for businesses “will make their way back to Bloomington residents because water is a basic cost of doing business.”
“When a local bakery, laundromat, daycare, or grocery store faces a nearly 50 percent jump in its water bill, it cannot simply absorb that cost. To stay open, those businesses must raise prices,” he said.
Daniel Frank, communications manager for CBU said the city agency had made a “concerted effort to communicate the proposed rate change to all our customers.” He said the effort included social media posts, flyers distributed to downtown businesses, answering questions at a chamber meeting and encouraging business owners to attend meetings and hearings at the local and state levels.
“Customer bills over the next two billing cycles will include notices about the new rates,” he said.
Boris Ladwig can be reached at bladwig@heraldt.com.
This article originally appeared on The Herald-Times: Bloomington water hikes shift costs to IU, businesses
Reporting by Boris Ladwig, The Herald-Times / The Herald-Times
USA TODAY Network via Reuters Connect
By Boris Ladwig, The Herald-Times | USA TODAY Network
