Democracy on the Front Lines
City Administrators Blog
Walter Denton
June 2, 2009
You may have seen the article over the weekend about the Illinois American Water Company raising their water rates by 28%. The City of O’Fallon purchases water wholesale from Illinois American, but O’Fallon water customers will not be affected by the increase.
In 2003, the City negotiated a 99-year agreement with Illinois American to standardize our rates according to the Consumer Price Index. At the time, we objected to Illinois American raising their rates 20% and 30% at a time. We felt that if rates were increased annually and were tied to the CPI, it would not be as disruptive and would be less expensive to our customers over the long term.
Since we signed the agreement, our cost estimates have been accurate and O’Fallon water customers continue to have substantially lower rates than Illinois American customers. Assuming the latest Illinois American rate increase is approved by the Illinois Commerce Commission, here are the average monthly costs for O’Fallon and Fairview Heights customers compared to Illinois American customers in Belleville. (The City of O’Fallon provides water service to most Fairview Heights residents.)
O’Fallon customers: $24.88 per month
Fairview customers on O’Fallon Water: $30.41 per month
Belleville customers on Illinois American Water: $48.73 per month
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