Citizens Energy should have completed the majority of its due diligence of the city’s water and sewer utilities, which
it plans to acquire, by the end of this month, said Citizens CEO Carey Lykins.
Unless Citizens finds something on the books it can’t swallow, a vote in the City-County Council on Mayor Greg Ballard’s proposed deal could happen in mid- to late May, say city officials.
The $1.9 billion deal includes an estimated $425 million that would be available for city infrastructure improvements, including roads, bridges and sidewalks. It’s the stuff businesses like to see when considering where to set up shop.
But Ballard, who has been touting the deal in a series of public meetings since March 10, is also pitching the proceeds as
a way to lure and retain young entrepreneurs. He envisions some of the deal proceeds going into bike lanes, an amenity attractive
to the young, “creative class.”
He said the cash flowing into the city also might help demolish at least some of the 4,500 abandoned houses plaguing the city.
The “vast majority” of the money will go toward what Ballard classifies as “dry infrastructure” improvements, however.
Critics have questioned whether proposals from other firms might have raised more upfront cash for the city. Ballard contends Citizens, as a public trust, ensures a stable future for the utilities and should keep downward pressure on rates because of merger synergies
The city bought Indianapolis Water from Merrillville-based utility NiSource in 2002. The terms of that deal froze rates for several years, during which time the water utility needed major infrastructure improvements. As such, the city has asked state utility regulators to raise rates 35 percent. Meanwhile, a city refinancing of water utility debt backfired amid the collapse in financial markets, leading to a 12-percent emergency water rate hike.
Ballard’s critics say turning over the utilities to Citizens will remove a layer of accountability by eliminating City-County Council oversight.
“What we have right now is the appearance of accountability,” said Michael Huber, the city’s director of enterprise development.
The Indiana Utility Regulatory Commission must OK the deal.