Bloomington drinking water rates set to rise in August

Drinking water rates for Bloomington residential customers will increase by about 20% starting in August, which means the new rates will be reflected in September water bills. That works out to almost $4 more a month for an average residential customer.

Other customer categories will also see increases. Businesses will see a 38% increase.

The final sign-off came on a vote from Indiana Utility Regulatory Commission (IURC) on Wednesday (June 24). A city of Bloomington news release came on Friday (June 26) announcing the timing of the higher rates.

The details of this rate case came into focus in August 2025. Drinking water rate cases generally take several months to get approved. City of Bloomington Utilities (CBU) generally asks for rate increases every four years, to fund various capital improvements and maintenance.

The work to be funded by this round of drinking water rate increases includes a $6-million project for new chemical lines to deliver fluoride. It was revealed last year that CBU had not been adding fluoride to the city’s drinking water for a few years, due to failed infrastructure.

At a late February hearing this year, objections to the higher rates came from the business community.

The final rates approved by the IURC this week reflect a reduction from the rates proposed by City of Bloomington Utilities (CBU). The reduction came from a settlement with interveners in the rate case, which were Indiana University, IU Health and Washington Township Water Authority.

The result of the settlement was a reduction in additional revenue from about $28 million to about $26.9 million, or around $1.1 million less than the originally proposed rates would have generated. The originally proposed rates would have generated about 30% more revenue. The reduced rates agreed to in the settlement generate about 25% more revenue.

The city of Bloomington is estimating that a typical residential customer who uses 3,000 gallons per month will see their monthly water charges increase from $26.06 to $29.78, or about $3.72 more.

Among the utilities that the IURC regulates, Bloomington’s new drinking water rates are still below average.

Making note of that at Wednesday’s hearing meeting of the Indiana Utility Regulatory Commission, was IURC chair Anthony Swinger, who had this to say about the drinking water rate increase for Bloomington:

I’ll simply comment for the record that once the rates are fully phased in under this order, the average residential rate for a Bloomington customer will still be well below the average rate among water utilities that the IURC regulates. I would also point out that Bloomington’s municipal water utility has some rather unique issues when it comes to cost of service and customer class allocation matters, and I commend all of the parties for working together and settling the case and presenting us with the agreement that we’re voting on this morning.