[CW received the following press release about their rate increase proposal filed today]

Approximately $180 million of infrastructure investments drive request; Cost for water service remains at about a penny per gallon for typical customer

Today Illinois American Water filed a rate case with the Illinois Commerce Commission (ICC) requesting an increase in rates of approximately $7.06 per month for a typical residential customer using 4,500 gallons of water per month in the Peoria District service area. Rates will not change until the fall of 2012, following ICC review and approval.

A typical customer in the Peoria District will continue to receive quality, reliable water service for about a penny per gallon. The company’s request would increase the monthly bill for a typical residential customer to approximately $43.65 a month (excludes fire protection charges, municipal taxes and franchise fees, which vary by community). The water company cannot increase rates on its own. The process before the ICC typically lasts 11 months and requires the company to provide thousands of pages of documentation to show that the rate request is needed.

Illinois American Water’s ongoing investment in water system improvements and the increasing costs of delivering quality, reliable service to customers are the main drivers behind today’s rate request. The proposed increase reflects approximately $180 million in investments across the state, including approximately $55 million in the Peoria District, not reflected in current water rates.

There is no immediate impact to customers. Following today’s filing, a comprehensive review process by the ICC is the next step in the rate-making process. Public hearings and opportunities for public comment are part of the process, under the direction of the ICC.

Illinois American Water’s rates are based on the full cost of providing water service, as reviewed by the ICC. The company works to control operating expenses while balancing the need for regular investment in the water system. While many municipally-owned water systems are able to cover costs with taxes, fees and other revenue sources as a way to keep water bills lower, investor-owned, regulated water utilities are required to recover all costs through water rates charged on the customer’s water bill.

Many communities are facing the challenges of aging water systems and associated rate increases. The U.S. EPA says the nation’s water utilities will need to make more than $335 billion in infrastructure investments — $15 billion in Illinois — over the next 20 years to replace thousands of miles of pipe and for upgrades to treatment plants, storage tanks and other assets to ensure public health.