Illinois American, Aqua Illinois Push Bill To Privatize Municipal Water Systems, Automatically Raise Rates To Finance Purchases

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Apr 29, 2013, 12:58 ET

CHICAGO, April 29, 2013 /PRNewswire-USNewswire/ -- Legislation moving quickly through Springfield would allow the state's biggest private water companies, Illinois American Water and Aqua Illinois, to fast-track takeovers of municipal water systems and automatically charge current customers higher rates to fund those conquests, the Citizens Utility Board (CUB) warned Monday.

House Bill 1379 has already passed the Illinois House 77-31, and could be voted on by the Senate as early as this week. CUB urged Illinois consumers to contact their state senators and ask them to vote no on what the consumer watchdog called a damaging and unnecessary bill.

Currently the Public Utilities Act requires that acquisitions of municipal water systems not have an "adverse rate impact" on consumers. However, HB 1379 would allow the companies to automatically raise their existing customers' rates by 2.5 percent for one acquisition or a total of 5 percent for multiple acquisitions—bypassing the traditional 11-month process water companies must follow to ask for higher rates.

"This legislation would leave Illinois American Water and Aqua Illinois customers vulnerable to a wave of rising water bills," CUB Executive Director David Kolata said. "The current regulatory system already allows private companies to purchase municipal water systems, while at the same time protecting consumers from automatic rate increases."

About 80 percent of water and sewer service in Illinois is provided by public utilities. HB 1379 would allow the sale of these lucrative assets with minimal public notice—and customers unhappy with such transactions would have little recourse to stop it.

Consumers in communities across Illinois have complained about privatization of municipal water systems, saying it raised rates. That is why CUB supports an amendment that would require any privatization move to be first approved by local referendum. The water companies oppose this change.

CUB encourages people to use AARP Illinois' Affordable Utilities Hotline, 1-800-719-3020, to ask their state senators to vote "no" on HB 1379.

CUB is Illinois' leading nonprofit, nonpartisan utility watchdog organization. Created by the Illinois Legislature, CUB opened its doors in 1984 to represent the interests of residential and small-business utility customers. Since then, CUB has saved consumers more than $10 billion by helping to block rate hikes and secure refunds. For more information, call CUB's Consumer Hotline at 1-800-669-5556 or visit CUB's award-winning website, www.CitizensUtilityBoard.org.

SOURCE Citizens Utility Board