Illinois American Water Rate Increase Approved Amidst Consumer Concerns and Call for Reform

Major Rate Hike and Consumer Discontent in Illinois

Recently, the Illinois Commerce Commission (ICC) approved a hefty rate increase of $110 million for Illinois American Water, significantly less than what the company initially requested. This decision has left many residents concerned about their escalating water bills, prompting advocacy groups to voice their discontent and push for legislative reform.

The decision, finalized on December 5, stands as a complex issue for consumers. It comes closely on the heels of back-to-back rate hikes, with Illinois American Water experiencing a staggering $195 million in additional charges over the past two years alone. This relentless climb in utility costs, some advocates believe, reflects a troubling trend of privatized water companies leveraging favorable legislative frameworks to impose steep fees on customers.

Sarah Moskowitz, Executive Director of the Citizens Utility Board (CUB), expressed relief that the ICC curtailed Illinois American's original demands but noted disappointment at the still-significant increase. She stated, “While we are relieved Illinois American Water did not get the rate hike it wanted, we are disappointed that the company still received a significant increase.”

As part of the decision, the ICC has allowed the utility to maintain a 9.84 percent Return on Equity (ROE) for its shareholders, just shy of the company's desired 10.75 percent. This ruling has implications for the company's profit structure and, ultimately, customers' bills.

Illinois American Water's request highlights a systemic issue affecting tens of thousands of residents. Some residents, particularly older adults on fixed incomes, have conveyed tremendous distress over rising bills that threaten their financial stability, with some expressing fears about basic necessities such as food and healthcare. “We only bathe or shower twice a week now,” said one concerned senior at an ICC forum in Bolingbrook, revealing the depth of concern among residents.

The historical context is critical: within less than a decade, Illinois American Water has garnered a whopping $230 million in rate hikes. The utility’s parent company, American Water, reported record profits of $1.8 billion over the last two years, leading many to question the fairness of these increases amidst heightened consumer complaints.

In response to growing pressure, the ICC has also directed Illinois American to expand its low-income discount program starting in July 2025, providing customers living up to 300 percent of the federal poverty line a credit ranging from 10 to 80 percent on their monthly bills. Advocates estimate this could positively impact some of the most vulnerable households, albeit temporarily.

The Citizens Utility Board is calling on state legislators to take immediate action regarding Illinois American’s frequent rate hikes. They assert that it is high time for lawmakers to respond to the growing frustration of constituents facing increasing utility bills. As highlighted in the statements from CUB and AARP Illinois, a sense of urgency has settled over the situation. Philippe Largent, State Director of AARP Illinois, remarked, “We commend the ICC for listening to these concerns... and we're happy to see them reflected in today's decision.”

As residents prepare to navigate this new landscape of elevated water utility costs, advocacy groups will likely continue to raise their voices, organizing efforts to reform legislation surrounding water privatization and rate-setting practices. The evolving dynamics of Illinois American Water and its impact on residents are far from settled, and the pressure from the community for just and equitable utility practices remains stronger than ever.

The CUB, which is marking its 40th anniversary as Illinois' foremost utility watchdog organization, continues to play a pivotal role in addressing these consumer issues. The group has successfully advocated against unjust rate hikes, saving consumers an impressive $20 billion over its four decades of service.

As Illinois American Water and its customers face an uncertain future, the dialogue around utility rates will undoubtedly persist, emphasizing the ongoing battle between consumer rights and corporate interests.