Suburban lawmakers, Citizens Utility Board partner to fight rising water costs

Bolingbrook — A group of bipartisan state lawmakers gathered with members of the Citizens Utility Board at the Fountaindale Public Library District in Bolingbrook on Wednesday to discuss their opposition to proposed rate increased by Aqua Illinois and Illinois American Water.

Over the past decade, both companies have been purchasing aging water infrastructure from municipalities throughout the state in order to upgrade them and act as the cities’ water suppliers.

However, residents who live in areas serviced by the two for-profit companies have complained about substantial rate increases in the past decade and could see yet another hike in prices by almost $30 per month come November.

Illinois American Water is requesting a $152.4 million rate hike, while Aqua is suggesting a $19.2 million increase.

CUB Director of Governmental Affairs Bryan McDaniel said both companies have seen their profits continue to rise as they pass the costs of acquiring and upgrading new systems on to their consumers.

Illinois American Water alone has seen its dividends increase each year for the past 16, according to CUB, including a nationwide 15% increase in profits for its parent company, American Water, in 2023 alone.

Illinois American Water provides water for about 1.3 million Illinois residents in municipalities including Bolingbrook, Romeoville, Plainfield, Lemont, Morris and Crystal Lake, while Aqua Illinois provides service to more than 200,000 residents in 14 counties.

Together, the two companies control water in 59 municipalities using facilities they purchased for more than $402 million – costs CUB said they have unfairly passed on to their water customers.

“Private water utilities are expensive and, just like consumers’ bills, their dividends keep going up and up,” McDaniel said. “It’s time for Illinois lawmakers to insist water utility shareholders pay their fair share.”

Four lawmakers attended the event to discuss their plans to do exactly that.

State Reps. Dagmara Avelar of Romeoville and Nabeela Syed of Palatine, both Democrats, as well as state Sens. Rachel Ventura of Joliet and Sue Rezin of Morris spoke, at the event to promote measures they’ve introduced to curb the water companies’ power. Ventura is a Democrat, and Rezin is a Republican.

This is not just a matter of economics, it is a matter of fairness and democratic principals. We must address this issue now before it becomes too late. ... We shouldn’t allow private companies to turn this basic necessity into their liquid gold.”

—  State Sen. Sue Rezin

In February, Syed, whose hometown of Palatine is serviced by Aqua Illinois and suffered a massive water failure last summer, introduced H.B. 5157, which would have eliminated the QIP surcharge on water bills. The legislation also would require cities to pass a ballot referendum before selling off their water systems to a private company, to “allow local voices to be heard in the process,” she said.

That QIP infrastructure charge has been removed from gas bills throughout the state.

“This rate hike has made it clear that more extensive protections are needed now more than ever to protect communities like ours from being preyed upon by big businesses looking to pad their profits,” Syed said.

Syed’s bill also would introduce a requirement that only 20% of the companies’ costs of acquiring and improving a water system could be passed on to consumers, with 80% being covered by the company and its shareholders, something Syed said is inverted now.

Curbing private expansion

The referendum initiative also was mirrored in Rezin’s S.B. 1131, which was introduced last year.

“Water is a fundamental necessity. It is essential for life. It shouldn’t be treated as a luxury, yet for many families across Illinois, this essential resource has become increasingly expensive,” Rezin said. “This is not just a matter of economics, it is a matter of fairness and democratic principals. We must address this issue now before it becomes too late. ... We shouldn’t allow private companies to turn this basic necessity into their liquid gold.”

Rezin also pointed blame for the current situation at a law passed in 2018, which expanded private water companies’ ability to purchase water systems.

H.B. 4508 eliminated a cap that was in place since 2013, limiting the size of water systems that companies could purchase. Previously, Illinois American Water and Aqua Illinois only had been permitted to purchase systems with 7,500 or fewer hookups, something the 2018 law removed.

The bill also established a “fair market value” cost, which Rezin and McDaniel said allowed the companies to pay municipalities inflated costs for their facilities and pass the costs on to consumers with less restriction from the Illinois Commerce Commission.

“That ‘fair market cost’ is more like a fairy tale cost because they are able to purchase old and worn-down systems at the price it would be valued at if the system was new or completely renovated,” Rezin said. “This legislation essentially offered a blank check for these companies to expand their footprint throughout Illinois in an extremely profitable way.”

“All our lives depend on water, so to make that a profitable entity is just criminal in my mind,” said Ventura, who noted that in her time on the Will County Board, she worked with Joliet and Lockport townships on plans to keep their water systems public. “It is so important that we put people over profits.”

Challenge to rate hikes

Ventura and McDaniel both urged residents to attend public hearings with the ICC in July and August to “have their voices heard” and oppose the proposed rate increases.

“This is a way for consumers to come out and tell the Illinois Commerce Commission, who is the ultimate decider on these rates, how this rate increase is going to affect them,” McDaniel said.

Both proposed rate increases by Illinois American Water and Aqua would result in prices going up by about $30 per month for residents in the companies’ service areas.

Illinois American Water’s increase would come only two years after its last increase of $85 million, while Aqua saw its last increase of $7 million in 2018.

CUB is challenging the rate hike requests in court, claiming that there are $7.6 million in overcharges hidden in Aqua’s increase and $48.8 million in overcharges in Illinois American Water’s proposal. They also are backing the legislation introduced by the attending lawmakers.

Although none of the bills discussed at the news conference made it to a floor vote this year, the legislators said they plan to reintroduce the measures in the fall before the ICC votes whether to approve the rate increases.

Upcoming hearings

Public hearings will be held at the following dates and locations:

• Monday, July 22, at the DuPage Township Levy Center in Bolingbrook

• Tuesday, July 23, at the Champaign Public Library

• Monday, July 29, in the Luecht Auditorium at McHenry County College in Crystal Lake

• Thursday, Aug. 1, in the Wisner Auditorium at Olivet Nazarene University in Bourbonnais

All the meetings will run from 7 to 9 p.m.