Utility watchdog warns of rising water rates as regulators consider
requests
[July 08, 2026]
By Maggie Dougherty
CHICAGO — Customers across Illinois could be facing higher water and
sewage bills as the state’s largest private water utilities seek rate
increases and permission to merge.
Illinois American Water, the state’s largest private water utility, is
seeking a $142 million rate increase, which would raise typical water
costs for its 357,000 residential customers by around $14 per month.
Typical wastewater customers would see an additional increase of around
$28 per month.
Aqua Illinois, the second-largest private water utility serving over
90,000 customers in the state, has asked regulators to approve a $26.5
million rate increase, which would raise average combined water
treatment and supply bills by about $23 per month.
But as the Illinois Commerce Commission weighs those rate cases, it is
also evaluating a proposed merger between the two water utilities’
parent companies. The Citizens Utility Board, a watchdog group, is
calling on the ICC to reject the merger.
The consumer advocate group warns that approval of the merger between
Illinois American’s parent company, American Water, and Aqua’s parent
company, Essential Utilities, would allow unprecedented market
consolidation.
“Illinois American and Aqua have a long history of consumer complaints
about escalating bills and poor service, and our expert testimony shows
that there is no reason to believe that the merger will fix these
problems,” CUB Executive Director Sarah Moskowitz said in a statement.
“That’s why we urge the ICC to reject this deal or set strong guardrails
to hold these companies accountable to their long-suffering customers.”
After Illinois American purchased Prairie Path Water Company last month,
which formerly provided water to customers in 15 counties in north and
central Illinois, CUB estimates that approving the merger of Illinois
American and Aqua Illinois’ parent companies would mean that over 99.99%
of regulated water and wastewater utility customers in the state would
be served by American Water and its affiliates.
“The fact that Illinois’ two biggest private water companies are seeking
higher rates in 2026, as one parent company tries to purchase another,
just proves CUB’s point that the companies are more interested in
seeking higher profits than actually serving the public good,” Moskowitz
said.
If approved by regulators, the merger would be expected to close in the
first quarter of 2027, according to a joint news release from the
companies.
What customers can expect
Both water utilities say the rate increases are necessary to pay for
critical infrastructure upgrades and upkeep of aging water pipelines,
storage tanks and equipment.
If approved in full by the ICC, Aqua Illinois customers can expect to
see a rate increase take effect in late April 2027. The increase would
be roughly 15% for average residential customers who pay for wastewater
collection and treatment in addition to their water bills, bringing
monthly bills to around $178, and nearly 30% for residential customers
who do not pay for wastewater treatment, bringing their bills to around
$102 per month, according to the company’s public notice.
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An Illinois American Water tower pictured in Bolingbrook. (Capitol
News Illinois file photo by Andrew Adams)
The company said the request also reflects its need to replace lead
service lines and defend against cyber security threats.
CUB objected to Aqua Illinois’ filing, saying it was driven more by
shareholder interests and the company’s “outrageous” request to increase
its shareholder return on equity from 9.6% to 10.8%, which CUB said
would make it the highest of the state’s major utilities.
Rebecca Losli, president of Illinois American, said the company’s $142
million request was driven by approximately $577 million needed to
“modernize and strengthen” its water and wastewater systems in 2026 and
2027.
“These investments directly benefit the communities we proudly serve and
provide our customers with even more reliable service and improved water
quality — from treatment to the tap,” Losli said. “It underscores our
employees’ commitment to the health and safety of our customers and the
communities we serve.”
Like with Aqua Illinois, CUB called out Illinois American’s request to
bump its shareholder return on equity from 9.84% to 10.75%.
The watchdog urged customers of Illinois American to attend or submit
comments ahead of a public ICC forum in Bolingbrook on July 14.
Customers can submit comments online or by calling the ICC’s Consumer
Services Division at 1-800-524-0795 on weekdays between 8:30 a.m. to 5
p.m.
A forum has not been publicly scheduled regarding the Aqua Illinois rate
case as it is in an earlier stage, but impacted customers are still able
to submit comments on the ICC website.
Gov. JB Pritzker recently signed legislation that requires the ICC to
offer public forums for customer feedback on future rate cases, although
the bill does not take effect until Jan. 1.
The ICC is expected to rule on the proposed merger in November, on the
Illinois American rate case in December and on the Aqua Illinois rate
case in May 2027.
If approved, Illinois American’s rate increase would take effect in
January 2027 and Aqua Illinois’ in late April 2027.
Capitol News Illinois is
a nonprofit, nonpartisan news service that distributes state government
coverage to hundreds of news outlets statewide. It is funded primarily
by the Illinois Press Foundation and the Robert R. McCormick Foundation.
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