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Citizens Energy agrees to document utility savings

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A not-for-profit public trust that wants to buy Indianapolis' water and sewer utilities has agreed to document all of the savings it says the $1.9 billion deal would create.

Citizens Energy Group has agreed to document its claims that the proposed deal would reduce future rate increases and save $60 million a year. It agreed to do so under a settlement agreement announced Tuesday with three customer and consumer advocate groups.

If regulators approve the purchase, Citizens would submit public reports twice a year for four years.

But a key advocacy group, Citizens Action Coalition of Indiana, did not agree to the settlement and is still weighing its options. Its attorneys say requiring the new owner to document savings isn't enough.

Mayor Greg Ballard and Citizens announced plans for the transfer in March 2010. If the water and sewer transaction gets final approval, it could free up $435 million for city infrastructure and transfer $1.5 billion in utility debt to Citizens.

City leaders said the deal would curb projected rate increases and remove politics from utilities management by transferring authority to Citizens, a not-for-profit with a board whose appointments aren’t political.

But the deal has drawn critics, particularly those who question Citizens’ ability to generate the $60 million in annual savings the company has pledged it can produce to pay off the debt for the purchase.
 

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  • IURC Should Reject This Whole Deal
    What's the big deal about them documenting that they will have no cost savings after they have already merged?

    In fact, it doesn't take a accountant to see that after they pay the break up fee to Veolia and lawyer fees, it will actually cost more than changing nothing.

    To add insult to injury, they want to divert $435 million of water company proceeds into slush fund for other things instead of reinvesting water company proceeds to lower the projected 100%+ incease in water/sewer bills.

    This is a silly boondoggle that the IURC should immediately reject and have them bid out management of this city asset.

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