IU official on planned Bloomington water rate increase: “This is a rate shock to Indiana University.”

At its Tuesday meeting, Bloomington’s seven-member utilities service board (USB) voted unanimously, with one abstention, to recommend a proposal to the city council that water rates be increased starting in 2022.

Abstaining was USB member Jason Banach. He’s a former city councilmember who represented District 2 from 1996 to 2005.

Before the USB took up the item, Banach announced that his employer is Bloomington’s largest water customer, adding, “It’s out of an abundance of caution that I’ll be recusing myself from this discussion and abstaining from the vote.” Banach works for Indiana University as the university’s director of real estate.

It is the university that is likely to be the strongest opponent of the water rate increase.

The proposed water rate increase would come in two phases, in 2022 and 2024, with residential customers paying a total of 22 percent more over the course of four years. Customers would see higher bills starting in early 2022.

After the two phases are implemented, Indiana University, which is a separate class of customer, would pay 39.7 percent more than it does now. IU also pays for water as an irrigation customer, and all irrigation customers would see a 43.9 percent increase over the two phases.

At Tuesday’s USB meeting, Indiana University assistant vice president for utilities Keith Thompson told the board: “IU is not happy with a 40-percent rate increase, even though it’s coming in two phases.” Thompson added, “This is a rate shock to Indiana University.”

The higher increases for IU and for irrigation customers is based on a cost of service study, done by a city of Bloomington utilities (CBU) consultant, which says that residential customers have been subsidizing other classes of customers.

Director of utilities Vic Kelson had previously reported to the USB that Indiana University is not happy with the proposed rate increase.

If the city council approves the water rate increase as proposed, Thompson said, IU would likely intervene in the case that goes in front of the Indiana Utility Regulatory Commission (IURC). Any water rate increase would have to be reviewed by the IURC. Continue reading “IU official on planned Bloomington water rate increase: “This is a rate shock to Indiana University.””