Forget the $165 million in bonuses for those AIG executives. If you live in two rural Kentucky towns, you are more concerned about the 50.8 percent rate hike in the local water bill being sought by an AIG subsidiary. The story is told in the West Kentucky Journal of Politics and Issues. And from what we can tell, the subsidiary apple doesn’t fall very far from the corporate AIG tree.
It seems that Water Services of Kentucky delivers water to 7,991 customers in Clinton and Middlesboro. Water Services is a subsidiary of Utilities, Inc., which is owned by AIG (of the $165 million in bonuses fame). Utilities, Inc. decided to “improve” its billing procedure in 2006 and proceeded to spend $14 million in the process. The bills were messed up from the start, according to the Journal. Some people got several bills a month. The Kountry Cafe was getting three a month.
Then the company filed for that 50.8% rate increase to help pay for this “improvement.” The AIG subsidiary says this increase will allow them to “earn a range of common equity cost ration of 11.6% to 12.1%.” That’s pretty sweet — as long as you don’t remember that these rates of return are coming out of the hides of some small towns.