HANCOCK COUNTY — Residents of the Schildmeier Woods and Villages developments, just outside New Palestine near U.S. 52, (Brookville Road) and CR South 700W, received quite the rate hike on their most recent sewer bill.
The provider, Doe Creek Sewer Utility, has increased the rate on 386 current customers by over 58% in a single month. All sewer bills went from a flat $48 fee in August to just over $76 a month in September.
Some in the community believe the increase is due to a new subdivision development going in at U.S. 52 and CR South 800W called Fields at Sugar Creek with 110 new homes proposed. Residents claim that Doe Creek Sewer Utility used current customers’ funds to pay for infrastructure at the new subdivision, creating the rate increase. However, officials with the utility say that’s not the case since all the infrastructure for the housing project is aleady in. Utility officials note it was simply time for a rate increase.
Doe Creek Utility is a utility company not run by a municipality. They are owned by Buckthorne EPS, but the billed name and utility are Doe Creek Sewer. They are a smaller company with a treatment plant on site in the Schildmeier Woods development.
Some residents said the rate increase wasn’t the initial issue as much as the near 60% increase over a single-month period. Some beleive the increase happened so the utility and new subdivision developer would not have to carry the costs of adding new customers.
The Indiana Office of Utility Consumer Counselor stepped in to settle the rate increase issue and posted information about the Doe Creek Sewer Utility Rate Case on their website. A commission order was issued in August, approving the settlement agreement, the post stated.
The utility initially proposed raising its minimum monthly residential rate from $48 to $84.15. A settlement agreement and supporting testimony from the OUCC were filed on May 25. The agreement would allow for a new monthly rate of $76.75, to be reduced to $70 when the utility has added 55 new customers from the proposed development.
Some residents say they had concerns and reached out to county officials to no avail with a complaint about what was happening, claiming the sewer company did not have the capacity to add a development without raising customer rates.
The Indiana Office of Utility Consumer Counselor (OUCC) is the state agency that represents consumer interests in all cases before the Indiana Utility Regulatory Commission (IURC). They sent a letter to affected residents stating, under Indiana law, when utilities file rate cases they have the burden of proof to show that they need the increase in order to deliver safe and reliable service to customers.
The letter went on to say that many small utilities, especially in regards to sewer, have seen similar increases to Doe Creek in the past few years. Doe Creek had not filed for a rate increase case in over 10 years, since 2009, and the utility requested a rate of $84.15 per month.
By comparison, costumers who use the Town of New Palestine pay a $67 flat rate plus $5 for storm water for a $72 total while Cumberland customers pay an estimated $78 flat fee.
The letter stated, the OUCC’s analysis did find that the utility would need an increase in their rates to deliver safe and reliable service, and to be compliant with Indiana law.
Some consumers had made them aware of a potential development in the area that might add to the utility’s customers in the future, thus expanding the economies of scale. That is why their office negotiated a settlement allowing for a smaller increase than requested, and the settlement stipulates the rates will be reduced once the utility has added 55 potential customers.
The Indiana Utility Regulatory Commission approved the settlement and said they will monitor the utility to ensure it files a reduced tariff once new customers are added to the system.
While the infrastructure for the new subdivision is in, officials said, currently no new homes are under construction. Once they are, Doe Creek Utility officials said the new homeowner or builder will pay for the utility hookup.