Water company spends over $1M making case for rate hike - 13 WTHR Indianapolis

Water company spends over $1M making case for rate hike

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Jeff Coppinger runs the Lazy Daze cafe in Irvington. He's concerned about a water rate hike. Jeff Coppinger runs the Lazy Daze cafe in Irvington. He's concerned about a water rate hike.
Waterworks Executive Director Matt Klein joined the utility in March. Waterworks Executive Director Matt Klein joined the utility in March.

Mary Milz/Eyewitness News

Marion County - Indianapolis Waterworks is pursuing it second rate hike in less than a year. It wants to raise rates 35 percent to cover $111 million in systemwide improvements, some of which are federally mandated.

But some wonder why the utility is spending so much to make its case to the Indiana Utility Regulatory Commission.

So far, it's spent $996,480 on the general rate case. Earlier this year it spent $142,129 on the emergency rate case. In June, state regulators reluctantly approved an 11-percent increase to cover debt issues.

Republican City County Councilor Ben Hunter said he was "surprised" to hear the utility had spent $1,138,610 on the two cases thus far.

"That's a lot of money," Hunter said. "That could have been put into efficiencies for the system. That's been my complaint. Where are the efficiencies?"

Hunter has questioned both rate hikes, asking the Waterworks board to hold off until they exhausted other cost savings.

Waterworks Executive Director Matt Klein joined the utility in March. "I know it's cost a lot. I'm not happy. I'm a rate payer too," he said.

Most of the $1.1 million, more than $700,000, has gone toward attorney fees, some as high as $445 an hour. That has Hunter wondering why city attorneys couldn't do the job or at least play a bigger role in the case.

"The rate case is a particular kind of regulatory act and we need to bring in people, lawyers and consultants with expertise, who know how to prosecute a rate case," said Klein.

Waterworks has also hired engineering, accounting and communications consultants.

After the utility lost its communications specialists in September, it signed a contract with Sease, Gerig & Associates. The contract calls for paying the firm up to $170 an hour to "assist in communicating...the need for the proposed rate hike," to work with members of the media, be a resource to Waterworks staff and "work with local government officials as needed to implement the strategic plan necessary to obtain IURC approval."

"Couldn't that duty be spread to someone else in the organization? Could someone else pick up the tab or could a city [public information officer] assist them in the meantime?" said Hunter.

When asked why the utility needed a pubic relations firm, Klein responded, "To help us answer your questions...We believe the rate case is very important. Obviously you're here answering questions... we want to make sure those questions are answered thoroughly."

As for who picks up the tab for pursuing a rate hike?

"I believe the cost in part, is determined at the end of the case and is rolled into the rate increase," said Klein.

While Klein declined to speculate on how much the general rate case would cost in the end, he acknowledged it will run considerably more than the nearly one million dollars already invested.

The water Company spent a million dollars to pursue the rate hike approved in 2007. It's already at that point this time around without a single hearing. Attorney fees alone are running $300 to $445 an hour.

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