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Protecting Municipal Utility Revenues
Posted in Government

Earlier this year, a new law took effect that expanded the Indiana Utility Regulatory Commission’s (IURC) jurisdiction over municipal utilities.

The law affects municipal water utilities even if they have “opted out” of the IURC’s jurisdiction. The law also affects municipal sewer utilities even though the IURC does not otherwise regulate them. Specifically, the law gives the IURC rate review jurisdiction over certain types of rate differentials. Rate differentials are reviewable if a municipality charges customers outside of the municipal limits rates that are more than 15 percent higher than the rates charged inside the municipal limits. The law contains a provision to preserve certain rate differentials of between 15 and 50 percent that were in existence on March 31, 2012. To preserve the rate differential into the future, a municipal water or sewer utility would need to petition the IURC on or before September 30, 2012. The IURC issued a General Administrative Order on Wednesday, May 2, that spells out the requirements to preserve the rate differentials.

It is important to note that municipal utilities will need an attorney to file a petition that sets forth the statutorily required information, such as date of the ordinance in which the rates were approved and other information. What should a municipal utility do to preserve its rate differential? Municipal utilities affected by this new law need to file a petition with the IURC and do so no later than September 30, 2012, which is a Sunday this year. Consulting an attorney earlier rather than closer to the deadline is advised given the information that needs to be compiled, organized and filed with the IURC. 

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