Citizens Water and Energy & Environment and Water and Utility rates and Utilities

Consumer agency: Citizens water rate hike 5 times too high

June 20, 2013

The state’s utility consumer agency says Citizens Energy Group's proposed rate hike for its water utility is about five times higher than it needs to be.

The Office of Utility Consumer Counselor, in a statement issued Thursday, suggested the Indiana Utility Regulatory Commission significantly reduce Citizens Water's proposed rate hike for its 300,000 customers in Marion and surrounding counties.

Citizens filed a request with the IURC in February to increase its annual operating revenue from water rates by 14.7 percent, or $25.3 million. But the OUCC says Citizens only needs a revenue increase of 2.6 percent, or $4.6 million annually.

Citizens has said it needs additional revenue to offset general operating costs and provide extra working capital, among other financial needs.

The OUCC pinpoints a variety of expenses the utility provider can cut, with other operations covered by long-term debt.

Citizens reported $170.8 million in operating revenue at the end of 2012 for its water business, which it acquired in August 2011. The entire Citizens Energy Group experienced an $11.8 million net loss, even though operating revenue increased 50 percent to almost $700 million.

The IURC has scheduled an evidentiary hearing on the rate case for July 29.

Citizens spokesperson Sarah Holsapple said Thursday that the utility would respond to the OUCC's finding in a filing to the IURC within several weeks.

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