IU official on planned Bloomington water rate increase: “This is a rate shock to Indiana University.”

At its Tuesday meeting, Bloomington’s seven-member utilities service board (USB) voted unanimously, with one abstention, to recommend a proposal to the city council that water rates be increased starting in 2022.

Abstaining was USB member Jason Banach. He’s a former city councilmember who represented District 2 from 1996 to 2005.

Before the USB took up the item, Banach announced that his employer is Bloomington’s largest water customer, adding, “It’s out of an abundance of caution that I’ll be recusing myself from this discussion and abstaining from the vote.” Banach works for Indiana University as the university’s director of real estate.

It is the university that is likely to be the strongest opponent of the water rate increase.

The proposed water rate increase would come in two phases, in 2022 and 2024, with residential customers paying a total of 22 percent more over the course of four years. Customers would see higher bills starting in early 2022.

After the two phases are implemented, Indiana University, which is a separate class of customer, would pay 39.7 percent more than it does now. IU also pays for water as an irrigation customer, and all irrigation customers would see a 43.9 percent increase over the two phases.

At Tuesday’s USB meeting, Indiana University assistant vice president for utilities Keith Thompson told the board: “IU is not happy with a 40-percent rate increase, even though it’s coming in two phases.” Thompson added, “This is a rate shock to Indiana University.”

The higher increases for IU and for irrigation customers is based on a cost of service study, done by a city of Bloomington utilities (CBU) consultant, which says that residential customers have been subsidizing other classes of customers.

Director of utilities Vic Kelson had previously reported to the USB that Indiana University is not happy with the proposed rate increase.

If the city council approves the water rate increase as proposed, Thompson said, IU would likely intervene in the case that goes in front of the Indiana Utility Regulatory Commission (IURC). Any water rate increase would have to be reviewed by the IURC. Continue reading “IU official on planned Bloomington water rate increase: “This is a rate shock to Indiana University.””

Bloomington’s proposed water rate increase: Residential customers would pay 22% more, reducing but not eliminating subsidy to others

A proposed water rate increase by the city of Bloomington utilities (CBU) would have the average residential customer paying about $45 more per year in water fees by 2024.

The proposal got a first look from the finance committee of the city’s utilities service board (USB) at its Monday afternoon meeting.

The proposal that CBU is making, for all classes of water customers, will first go to the full USB, and eventually to the city council in February. After that, it will still need to get approval from the Indiana Utility Regulatory Commission (IURC).

The rate increase for Bloomington’s residential water customers works out to around 22 percent more than they pay now. That’s a smaller increase than for any other class of customer.

But the 22-percent increase is more than it would be, if the cost of service were distributed perfectly across all customer classes.

Residential customers now pay more than their fair share of the cost of providing water service, according to a cost-of-service study done by Indianapolis-based Crowe LLP.

The rate increase proposal from CBU would make progress towards reducing the subsidy provided by residential customers, but would not eliminate it.

Other classes of customers that are now subsidized by residential customers are: commercial, governmental, interdepartmental; industrial; wholesale; Indiana University; and irrigation. Continue reading “Bloomington’s proposed water rate increase: Residential customers would pay 22% more, reducing but not eliminating subsidy to others”

Higher rates for Bloomington sewer customers: An inside-and-out story

How much sewage do Bloomington utilities customers generate every year? About 2.57 billion gallons. Lake Monroe’s capacity of about 77.14 billion gallons could hold roughly 30 years worth of Bloomington’s sewage.

Bloomington’s sewage is not piped into Lake Monroe, of course. It goes to one of two wastewater treatment plants—Blucher Poole or Dillman Road. These days the Dillman Road facility often operates near or even over its rated capacity of 15 million gallons a day.

It’s a situation that caught the attention of the Indiana Department of Environmental Management (IDEM) recently, in 2016, and two decades ago, in 1999. IDEM sent “early warning” letters to Bloomington noting that the average daily flow through the plant, measured over the course of a year or more, was approaching or over 90 percent of the rated capacity of the facility.

So Bloomington’s utilities director, Vic Kelson, will be appearing in front of the city council on Wednesday (Sept. 11), to lay out the case for a sewer rate increase, to help pay for needed improvements to the city’s two wastewater treatment facilities.

The department’s capital improvement plan over the next seven years calls for about $35 million worth of improvements to Dillman Road and $17 million for the Blucher Poole facility. Continue reading “Higher rates for Bloomington sewer customers: An inside-and-out story”