Citizens Utility Board urges state authority to reject merger of 2 water suppliers
A proposed merger between the parent companies of the state’s two biggest private water utilities — Illinois American Water and Aqua Illinois — would not serve the public interest, according to experts at the Citizens Utility Board.
The consumer watchdog group recently filed testimony urging the Illinois Commerce Commission to reject such a union over concerns about market consolidation, aggressive acquisitions of municipal systems and shoddy service quality.
The utilities’ parent companies — American Water and Essential Utilities — announced an “all-stock, tax-free” merger in October of 2025. The proposed transaction would result in Essential becoming a wholly-owned subsidiary of American Water. The combined utilities would serve 4.7 million water and wastewater customers across 17 states, according to CUB.
Aqua Illinois serves about 280,000 people across 14 Illinois counties, including Cook, DuPage, Kane, Lake, McHenry, Will, DeKalb, Kankakee, Winnebago, Vermillion, Ogle, Knox, Champaign and Boone.
In addition to Illinois, American Water serves customers in Indiana, Iowa, Missouri, Pennsylvania, Kentucky, Maryland, New Jersey, Tennessee, Virginia, West Virginia, Hawaii, Georgia and California. It is the largest regulated water and wastewater utility company in the U.S.
CUB said the companies have a poor track record in Illinois and challenged claims by corporate officials that the deal will allow them “to continue providing superior customer service at affordable rates.”
“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 Monday in a news release. “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.”
CUB previously has challenged the utilities’ rate hikes before the ICC and worked to reform a state law that allows both companies to aggressively buy up depreciated municipal water and wastewater systems and charge their customers for 100% of the price tag. Those acquisitions have inflated Illinois bills by a total of more than $411 million since 2013, according to CUB research.
Bradley Cebulko, an expert on utility regulation with Current Energy Group, argued on behalf of CUB that the merging companies “have not provided sufficient evidence to demonstrate that the transaction is in the public interest.”
If regulators approve the merger, CUB urged them to impose a five-year moratorium on further acquisitions until the merger is complete and the merged company demonstrates it meets certain performance standards.
In seeking regulatory approval of the merger, American Water has promised to “maintain current service quality,” but despite numerous requests by consumer advocates, the utility has failed to “define, measure, or verify” that commitment, according to CUB’s testimony. “A commitment that cannot be defined, measured, or verified is not a meaningful regulatory assurance,” CUB’s expert testified.
American Water also is seeking ICC approval to buy Prairie Path Water Co. If the ICC approves these transactions, more than 99.99% of regulated water utility customers in Illinois — all but about 800 in the state — and all regulated wastewater utility customers will be served by affiliates of American Water, CUB argued.
Also, service reliability across Aqua Illinois’ footprint is “declining, not stable,” and American Water showed declining customer satisfaction from 2023 through 2025, according to CUB’s testimony.
Illinois American has received $230 million in rate hikes over the last decade — $110 million in 2024, $85 million in 2022 and $35 million in 2016. Now, the company is pushing for a $134 million increase.
Aqua got an $11.6 million increase in 2024. In recent years, customers have experienced service problems, including a water outage in Lake County in 2023 and unacceptable levels of lead in drinking water in University Park in 2019.
The ICC is set to rule on the merger no later than Nov. 5. The companies seek to close the deal, which requires regulatory approval in multiple states as well as shareholder approvals and federal antitrust clearances, in the first quarter of 2027.