Iowa-American Water Company to increase water rates

Iowa-American Water Company has received approval from the Iowa Utilities Board for an increase in the rates the water utility charges to its customers.

However, the board has rejected the company’s proposed automatic adjustment mechanism, known as the customer bill surcharge, to recover the costs of certain capital investments prior to its next rate assessment.

The decision allows an overall annual revenue increase of approximately $3.9m (10.9%), including Iowa-American Water’s temporary revenue increase of $2.68m (7.5%) that did not require pre-approval from the board.

The board also established Iowa-American Water’s return on common equity at 9.9%.

The company filed its proposal for an overall permanent annual revenue increase of $6.44m (18%) in April 2013.

Prior to the decision, the Board received written public comments in the rates case, held consumer comment meetings in Bettendorf and Clinton, and conducted an evidentiary hearing in Des Moines.

The board will issue its final order by 28 February 2014.