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 Agency Says Town’s Request for Water Rate Hike Too High

June 4, 2008 - The Office of Utility Consumer Counselor thinks utility customers in Knightstown should pay higher rates and charges, but not quite as high as those requested by the town.

Knightstown's water utility filed a petition with the Indiana Utility Regulator Commission in February, seeking a 47.8 percent increase in rates. In a response filed with the IURC last week, the OUCC, which represents utility consumers in rate change cases, said it thinks the utility only needs a 43.84-percent increase.

According to the OUCC, a 43.84-percent increase would provide the utility with $104,991 in additional revenue each year. The agency also noted that the town's requested increase is actually a 51.87 percent increase when increases in fire protection service fees - which would rise more than 80 percent - are included.

The OUCC has asked the IURC to require the town's water utility to obtain pricing for and make plans to acquire standby power for its well field and treatment plant. The agency's report says the town's water utility currently "does not meet recommended engineering standards" for "auxiliary or standby power at key installations," like its well field and treatment plant.

The OUCC has also requested that Knightstown's plans to replace old meters with new ones at the rate of 200 per year at a cost of $30 per meter be scaled back. As an alternative, the OUCC proposes a 15-year program where old meters would be replaced at the rate of 70 per year at $50 per meter.

Finally, the OUCC also wants the water utility to be required to address water loss issues and report its progress in reducing water loss to the IURC and OUCC twice yearly. According to the OUCC 's report, "Knightstown has been plagued by significant water loss in the low to mid 30 percent range" since its last rate increase 17 years ago.

At the request of a dozen Knightstown water utility customers, the IURC held a public hearing at Knightstown High School on May 20, where only three area residents testified. The IURC has no deadline for issuing its ruling on the town's request for higher rates and charges.


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