Iowa Utilities Board Approves New Rates for Iowa American Water

On February 27, 2017, the Iowa Utilities Board (IUB) issued its final order in Iowa American Water’s rate case that was filed on April 29, 2016. On March 24, 2017, the IUB approved the company’s rate design and set an effective date of March 27, 2017.

The need for the rate adjustment was driven primarily by significant investment made by the company to improve and replace water infrastructure. According to Randy Moore, president of Iowa American Water, the company has invested approximately $38 million in water system improvements statewide in the last three years to ensure continued high-quality water service.

“Reliable water service is essential to everyday life and a community’s strong economy, and proactive water system upgrades today save money in the long run,” said Randy Moore, president of Iowa American Water. “All these investments in local water infrastructure systems enhance water quality, service reliability and fire protection for customers while keeping the cost of water service for most local households at about a penny per gallon.”

The need to upgrade water systems is a national challenge. Earlier this month, the American Society of Civil Engineers released its report on the nation’s infrastructure and estimated $1 trillion in capital spending would be needed across the nation over 25 years to replace thousands of miles of pipe, upgrade treatment plants and comply with stricter water quality standards. Iowa American Water is addressing this challenge.

Iowa American Water’s rates are based on the costs of providing water service as reviewed and approved by the IUB. Moore added that Iowa American Water has worked to control costs, reducing operating expenses by about 10 percent or $1.7 million since the last rate order.

In its final rate order dated February 27, 2017, the IUB approved an overall increase in additional annual revenue of $3.9 million. This final order amount includes the previous temporary rate increase of $2.1 million that was implemented by Iowa American Water on May 9, 2016 as allowed by Iowa Code § 476.6(9). Company officials say those additional revenues will help Iowa American Water continue to invest proactively in its water infrastructure throughout the state. Iowa American Water last received a rate change order from the IUB in 2014.

Effective March 27, 2017, the rates approved by the IUB increased the water service cost slightly above the interim rates put into effect on May 9, 2016. The average residential customer using 3,870 gallons per month will pay about $0.03 cents more per day or $1.05 more per month bringing their average monthly water bill to $36.64.

“As a utility whose services are critical to ensuring public health, we take our responsibility to provide quality drinking water seriously, and as such, are committed to keeping our systems and facilities well maintained and services,” added Moore. “Even with this increase in rates, water service remains a good value for our customers at about a penny a gallon.”

Customers can contact American Water's call center toll free at 1-866-641-2108 with additional questions.

Additional information can be found on the Iowa Utilities Board’s website at www.state.ia.us/iub/.

Iowa American Water, a subsidiary of American Water (NYSE: AWK), is the largest investor-owned water utility in the state, providing high-quality and reliable water services to approximately 212,000 people. With a history dating back to 1886, American Water is the largest and most geographically diverse U.S. publicly-traded water and wastewater utility company. The company employs more than 6,700 dedicated professionals who provide regulated and market-based drinking water, wastewater and other related services to an estimated 15 million people in 47 states and Ontario, Canada. More information can be found by visiting www.amwater.com.