Deadline approaching to file petition for outside-city rates

By Scott A. Miller, CPA, Partner, September 7, 2012
Articles: Utilities Related, Latest News

With the September 30 deadline approaching, it is time for municipalities to submit petitions for IURC approval of existing outside city water or wastewater rates if you have not already done so.  This applies if your rate was already in effect on March 31, 2012, and your outside-city rates and charges are between 15% and 50% higher than the inside rates.

After the change to Indiana Code in the 2012 legislative session, we advised municipalities to hold off until there was better definition of the petition process. The IURC has since issued a General Administrative Order (GAO) with a petition format that is easily adaptable for your municipality.

The GAO also spells out the process that will occur:

• The petition should be submitted to the IURC Director of Water and Wastewater Division by September 30.
• Once submitted, the IURC will post the petition on its website for 10 days as a notice to affected parties.
• Parties wishing to object to the petition are required to do so in writing within 10 days of the petition posting.
• If an objection is received, the petition will be scheduled for an evidentiary hearing before the IURC.
• If no objection is filed within the 10 days, the Division Director will issue a letter approving or disapproving the petition.
• Any party may appeal the Division Director’s decision to the full Commission in writing within 10 days of the decision.

In evidentiary hearings about outside city rates, the municipality generally has the burden of proof to demonstrate rates and charges are nondiscriminatory, reasonable and just.   Because determining appropriate utility rate differentials are all fact sensitive and case specific, properly allocating costs among user groups is frequently supported by a detailed cost-of-service study.

If you missed our earlier Footnotes articles about the 2012 legislative changes regarding outside city rates or why it can be appropriate and in the public’s interest to establish different water and sewer utility rates for geographic areas considered to be “outside city,” click the article topics above to get caught up.

If you have questions or would like help in analyzing whether rate changes might promote water conservation in your community, please contact us atfootnotes@umbaugh.com.

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Information in this article was believed current as of the date of publication. As you know, changes occur frequently. The information presented is of a general educational nature. Before applying to your specific circumstances, please contact us at footnotes@umbaugh.com.