CHICAGOIllinois Attorney General Lisa Madigan is asking the Illinois Commerce Commission (ICC) to reduce many Illinois American Water Company (IAWC) water charges and to bar the company from making yearly adjustments to those water charges due to serious and pervasive errors in the companys record keeping.
In testimony filed with the ICC July 18, Madigans expert, Scott Rubin, concluded that annual automatic adjustments were unfair to consumers and could provide a perverse incentive to poor maintenance and sloppy billing.
In his testimony, Rubin explained his discovery of serious irregularities in the IWAC records that track the companys purchases and sales of water throughout the state. Rubins analysis showed that inconsistencies in the companys books make it impossible to determine the proper variable rates that IAWC has been allowed to collect in the past. He proposed fixed rates that would lower charges for many customers.
According to Rubin, the combination of poor record keeping and variable rates also could be used to hide more serious problems at the public utility, such as poor maintenance and waste. Rubin noted that IAWCs books contain two contradictory problems: in some areas, it has consistently sold more water to customers than it actually purchases for them, and in other areas, its records show it has lost up to 50 percent of the water it buys for consumers. Rubin asserted that this level of waste was excessive, is higher than industry standards, and consumers should not have to pay for it.
In June, Madigan recommended the ICC initiate an audit to determine the cause of IAWCs billing, metering, customer service and fire protection problems, a proposal made following Rubins investigation of public outcries about enormous water bills and poor service. That investigation was part of a complaint Madigans office filed against Illinois American with the ICC earlier this year. The separate review of water rates submitted July 18 clearly bolsters those earlier charges.
This additional review of Illinois Americans business shows, more than ever, that we need a comprehensive audit, Madigan said. If the company cant keep accurate records, we need to question everything about the fairness of their rates.
Rubin also proposed lower sewage treatment rates in the Country Club area to reflect recent improvements by DuPage County in its storm sewer system.
From the Sept. 6-12, 2006, issue