FORT WAYNE – Aqua Indiana customers will soon pay even more for water and sewer service – but not as much as the company wanted.

The state on Wednesday approved a 7.2 percent water-rate increase and an 8.4 percent increase on sewer rates for Aqua Indiana customers. The private utility said customers using 5,000 gallons of water a month will see monthly water bills rise from $32.90 to $35.26 and monthly sewer bills rise from $43.35 to $46.97. The new rates will likely take effect as soon as next week, but residents are unlikely to see the full increase for another month.

The company sought a 16.64 percent water hike and an 18.48 percent sewer increase. Thomas Bruns, Aqua Indiana president, said he was disappointed the state didn’t grant the company’s full request.

Aqua Indiana had argued that higher rates were needed to pay for about $10 million in recent improvements. Those include $1.6 million to add water-softening capabilities to the Chestnut and Covington water treatment plants. The company also spent nearly $2 million at its Aboite Meadows Water Treatment Plant.

The approved increases will provide an additional $435,077 in water revenue and $608,653 in sewer revenue each year. This means it will earn combined net operating revenue of about $4.1 million.

The utility has about 12,000 water customers and 12,000 sewer customers – not all have both utilities – in Allen County and a small portion of Whitley County. Many customers live in southwest Fort Wayne.

The Indiana Utility Regulatory Commission said in its approval order that the entire request wasn’t given partly because of concerns on the quality of the company’s service.

“If (Aqua Indiana) cannot provide water to its customers adequate for the purposes reasonably expected by its customers, it is this commission’s responsibility to speak directly to the utility’s management, through our orders, to send a message that service must improve,” the order said.

The state also said a higher rate of return might be appropriate if the company can demonstrate improved performance in its next rate case.

Bruns said the company will definitely pay attention to that part of the order, especially because so many of the company’s investments were intended to improve quality.

“I’m disappointed that wasn’t really recognized in the decision,” he said.

The proposed increase drew high-profile foes such as Sen. David Long, R-Fort Wayne, and the three Allen County commissioners. Much of the opposition was because the new request came after a 75 percent water and sewer rate increase took effect in June 2009.

Mayor Tom Henry on Wednesday released a statement attacking the company’s rates.

“This rate spike is especially onerous in light of the numerous complaints regarding Aqua Indiana’s services, including 20 separate petitions from neighborhood associations representing more than 1,300 households,” Henry said.

Many Aqua customers have long clamored for Fort Wayne City Utilities to take over their service. Henry’s administration has previously said it will watch the area, but likely won’t be able to take any action on it until the value of its previous acquisition is settled.

The city paid $16.9 million to Aqua Indiana for the 9,000 water customers and 1,700 sewer customers in northern Fort Wayne in early 2008. The legal fight over the value of the system remains in court.

In his statement, Henry said the rates would force residential and business customers to spend hundreds of dollars a more each year versus customers of City Utilities.

“I will work with (customers) in efforts to scale back or eliminate this excessive new burden,” he said.

Bruns said he had not seen the mayor’s statement and declined to comment on it.

Any future rate increases will depend on how effectively the company is able to grow with an expanding economy, Bruns said, noting that if construction remains stagnant his company may be forced to seek higher rates again.

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