‘People are concerned’: Legislators, advocates seek reforms to curb rates for private water customers

Illinois lawmakers including Rep. Nabeela Syed of Palatine and Rep. Dagmara Avelar of Romeoville joined consumer advocacy group Citizens Utility Board on Wednesday to call for legislative reforms designed to curb rates for customers of the state’s two private water utilities.

The proposals come as the utilities, Illinois American Water and Aqua Illinois, seek rate increases totaling $152.4 million and $19.2 million, respectively. The requests account for necessary investments such as replacing aging infrastructure, enhancing water quality and complying with local and federal environmental regulations, according to the utilities.

But with the companies estimating that the hikes would increase residential water service and wastewater bills by up to $29 a month, advocates say “frustration is mounting” among customers.

“People are concerned. When a utility wants close to a $30 a month rate increase, that's a lot of money,” said Bryan McDaniel, director of governmental affairs for CUB.

Illinois American Water now serves portions of Arlington Heights, Mount Prospect, Wheeling, Prospect Heights and other towns in Cook County, as well as numerous communities in DuPage and Kane counties, including portions of Wheaton, Lombard, Glen Ellyn, St. Charles and more.

The private companies typically charge more than their public counterparts — prices are 20% to 70% higher than the cost a resident under a public water system would pay for the same Lake Michigan water, according to a 2017 Chicago Tribune investigation.

McDaniel added trust between the private utilities and their customers has eroded in recent years following events like Aqua Illinois’ water outage in Lake County last year.

To address the concerns, proposed reforms include requiring shareholders — not customers — to cover the majority of costs when a private company buys a local water and wastewater system, and requiring local approval through a referendum before Illinois American or Aqua Illinois purchases a municipal system.

Under current state law, the utilities are allowed to charge their customers 100% of the cost for such acquisitions. Since 2013, the two companies have bought 59 systems totaling $402 million in acquisition costs that have been passed on to customers, according to a Citizens Utility Board analysis.

“The acquisition of our municipal water systems by for-profit entities has turned a basic necessity into liquid gold for these companies,” said state Sen. Sue Rezin, a Republican from Morris “It’s imperative that the public have a voice in these decisions through a required referendum to ensure fair and reasonable water rates for our communities.”

While efforts to introduce the legislation stalled in committee during the most recent General Assembly session, McDaniel said momentum is mounting.

“Elected officials are starting to see the pace and the amount of these rate increases is a problem, and we've got to do something about it,” he said. “The first thing is the (Illinois Commerce Commission) needs to tell them ‘no’ on the rate increases, and then we’ve got to go to Springfield and get these laws amended that they've been able to pass through the General Assembly. Because their raising water bills very quickly.”

The Illinois Commerce Commission will rule on the rate requests in November and December.

Public forums for Illinois American Water will take place:

● From 7 p.m. to 9:30 p.m. July 22, at the Levy Center in DuPage Township, 251 Canterbury Lane, Bolingbrook.

● From 7 p.m. to 9 p.m. July 23, at the Champaign Public Library, Robeson Pavilion Room AB, 200 W. Green Street, Champaign.

Public forums for Aqua Illinois will take place:

● From 7 p.m. to 9 p.m. July 29, at McHenry County College, Luecht Auditorium, 8900 Route 14, Crystal Lake.

● From 7 p.m. to 9 p.m. Aug. 1, at Olivet Nazarene University, Wisner Auditorium, One University Ave., Bourbonnais.

• Jenny Whidden, jwhidden@dailyherald.com, is a climate change and environment writer working with the Daily Herald through a partnership with Report For America supported by The Nature Conservancy. To help support her work with a tax-deductible donation, see dailyherald.com/rfa.