Peoria's Water Utility 'Relationship' Gets Statehouse Attention

Jul 14, 2017

 

Credit Cass Herrington / Peoria Public Radio

Two state lawmakers, who previously served on Peoria City Council, are pushing legislation they say would make private utility companies more accountable to customers.

State Sen. Chuck Weaver and Rep. Ryan Spain’s own experiences dealing with the city’s contract with Illinois American Water spurred the two bills. One focuses on transparency in how prices are set and the other would regulate appraisals.

Currently, private utilities in Illinois can increase their appraised value, if the buyer is a unit of government.

“If I’m running a coffee shop, I don’t ask my customers to open their wallets and I get to peek in first before I determine to set the price of that cup of coffee,” State Rep. Ryan Spain said, during a news conference Thurs.

Peoria considered buying its water utility in 2005 when the contract came up for renewal. Illinois American more than doubled the appraisal cost, from $120 million to $235 million, because the purchaser was a public entity.

But Illinois American Water maintains that its upheld transparency throughout its 130-year contract with the city.

“These bills would place unnecessary costs on consumers, for the sole purpose of a government takeover of a company that does not want to be sold,” Karen Cotton, a company spokesperson, said in an email.

Credit Cass Herrington / Peoria Public Radio

Weaver and Spain were joined by civic and business leaders supporting the proposals, including the League of Women Voters, Sierra Club, Change Peoria and the CEO Council, which spearheaded investigations into rising water utility costs. CEO Council spokesperson Tom Fliege reported to Peoria City Council last October that water rates have increased 54 percent in the last 12 years.

A municipality outside of Chicago is facing similar challenges.

“We might not share a border with Peoria but I do kind of feel neighborly love in talking about Illinois American Water and what we can do to get some information out to the public and best serve them,” Lucas Rickelman, director of public services and development for the Village of Bolingbrook, said.  

Since the utility company isn’t required provide details on how it calculates rates, Rickelman says that makes government’s job of explaining costs to residents nearly impossible.

“It doesn’t add up,” Rickelman said. “It costs different amounts to bring water to different areas, but they just want to apply one rate over the state, that just doesn’t work.”

He says technical differences like transportation, infrastructure and elevation can change how much it costs to provide water to individual communities.

Spain and Weaver, both Republicans, say clear access to pricing information is essential for governments weighing the decision to purchase their water utilities. 

The Peoria City Council must determine later next year whether it wants to enter a due diligence period for purchase of the water company. That includes the expense of an appraisal.

Meantime, Illinois American Water says the two legislative proposals are on par with a government takeover.

“We have provided information to the city numerous times in the past. There’s no need to try to impose new terms on the relationship through unilateral legislation, rather than negotiation,” Illinois American spokesperson Karen Cotton said.