Illinois groups push back on $142.4M water rate hike

Consumer advocates are urging Illinois American Water to cut a proposed $142.4 million rate increase, arguing the company is seeking profits that are driving higher bills—while the Illinois Commerce Commission weighs the request later this year and the utility

For many Illinois households. the math is already ugly—nearly 47. 000 are behind on their water bills. owing more than $8 million as of April. Now consumer advocates are challenging a new proposal from Illinois American Water that would raise rates by $142.4 million. warning the company’s plan would squeeze customers further just as the state’s regulator prepares to rule.

The Illinois Commerce Commission is set to decide on the company’s request later this year. In filings submitted by the Illinois Attorney General’s office and consumer groups including the Citizens Utility Board. advocates ask the commission to cut the proposed increase by 38%. saying the utility is aiming for exorbitant profits.

Advocates want a $54 million reduction, according to the filings. They argue the increase is tied to investor returns—proposed at 10.75%—that remain too high. In the company’s last rate case. the ICC reduced the same figure by nearly a full percentage point. and the consumer groups say the new request is still overinflated by $30.8 million.

The pushback lands against a backdrop of rising costs and broad customer impact. Based on Citizens Utility Board estimates. the proposal could increase residential bills by an average of $168 per year for water and $336 per year for wastewater. The company’s filing came after the ICC approved a separate $110 million rate increase for 2025.

Consumer advocates say the company’s profit picture makes the requested return hard to justify. They point to the parent company’s reported earnings. saying it has seen more than $1 billion dollars in profit each of the last two years while Illinois American Water asks for higher payouts for investors.

Eric DuBellis, general counsel for the Citizens Utility Board, described the situation as troubling. “The fact that [the current return on investment] is not enough for them already is troubling,” he said.

In a statement to the Sun-Times, Illinois American Water said the rate request reflects costs tied to replacing aging pipes, upgrading treatment facilities, improving storage and pumping systems, and meeting evolving regulatory requirements.

But CUB’s filings argue the company’s revenue projections also lean on an unrealistic assumption: a sharp drop in water use. “akin to the start of the COVID-19 pandemic. ” when people stopped leaving their homes. DuBellis said the forecast doesn’t belong in an otherwise normal year. “It’s an absurd thing to forecast — that was an unforeseeable circumstance in an otherwise normal year,” he said.

The dispute is also framed around how much of the money the proposal would funnel to executives. CUB said the company included $4.7 million in executive bonuses in its request.

Illinois American Water provides service across the state, operating water delivery systems in 148 communities, including some in suburban Chicago. It runs 18 water treatment plants and 17 wastewater treatment facilities.

Still, the rate hike fight is only part of the pressure. Last October. Illinois American Water and Aqua Illinois—two of the largest water utility providers in Illinois—proposed an acquisition that would combine the companies under one owner. The Illinois Commerce Commission has not yet ruled on that deal.

CUB argues that. over the past several years. the companies have aggressively purchased depreciated municipal water and wastewater systems—an approach the group says has increased costs for customers. The consumer advocate says the acquisitions have added $411 million to Illinois water bills since 2013.

CUB also points to Illinois American’s purchase of Prairie Path Water Company. which has about 35. 000 customers in northern and central Illinois. If the acquisition is approved. CUB says it would leave just about 800 private residential water customers outside Illinois American’s jurisdiction statewide—creating an effective monopoly for water utility and a complete monopoly for wastewater. according to the group.

“The level of market consolidation raises obvious concerns,” CUB representatives wrote in ICC filings. Bryan McDaniel, CUB’s director of governmental affairs, said the deal would wipe out competition. “They’re buying all these systems, there’ll be no competition, just one big monopoly.”

The consumer advocates also argue that consolidation has worsened service outcomes. They cite data in Aqua Illinois’s ICC filings showing a 77% increase in “unplanned disruptions” such as main breaks from 2022 to 2025. They also cite a 39% increase in “unplanned advisories,” which include boil orders, between 2024 and 2025.

CUB said information for advisories in 2022 and 2023 was not provided when the Illinois Attorney General’s office requested it as part of the rate case.

McDaniel tied those outcomes directly to who pays. “Customers pay the full price of the system, plus they replace it all,” he said. “We think shareholders ought to pay for that.”

State Sen. Laura Murphy has been pushing legislation aimed at changing the cost-sharing dynamics of utility deals. Her bill would require utility-company shareholders to shoulder 80% of merger and acquisition costs. Murphy’s proposal was up for consideration, and she said it encountered resistance and was amended after pushback.

The amended approach would give towns and cities a chance to buy back their systems every few years, but Murphy said the bill still didn’t pass by the end of the session. She said the pressure remains—and she still hears complaints from Des Plaines, the town that originally inspired the bill.

Murphy said her experience is a reminder of the human limits of the current system. “I remember when it was rare when a utility went to the ICC [for a rate hike]. people’s salaries can’t keep up. ” she said. “You have to learn how to manage the same way the government does. You don’t have to have profits to increase upper management salaries.”.

A study conducted by the city of Des Plaines found that between July 2024 and 2025, Illinois American Water customers in Des Plaines saw bills an average of 142% higher than those getting water from the municipal system.

Looking ahead, Murphy said colleagues are examining reforms to the rate hike process and bolstering the ICC’s ability to regulate utilities for the fall session.

Illinois American Water’s rate request also arrives alongside other major utility filings. Peoples Gas submitted a request for a $202 million rate hike, and Nicor filed for a $220 million rate hike. Both are expected to come before the ICC later this year.

Murphy said the regulator’s role will be crucial as utilities seek higher rates across the board. “Our system structure puts the ICC as that watchdog and they’re going to have to step up like they never have before,” she said.

For the households already struggling, the immediate question is whether the next ICC decision will tighten the squeeze—or offer at least some relief before the bills land.

Illinois American Water $142.4 million rate hike Illinois Commerce Commission Citizens Utility Board Eric DuBellis Bryan McDaniel Aqua Illinois acquisition Des Plaines water bills rate case Illinois utility regulation