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Citizens' CEO grilled on pay in rate-increase hearing

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State utility regulators kicked off a week-long hearing Monday on a proposed water rate increase for Indianapolis residents by putting the CEO of Citizens Energy Group on the hot seat.

CEO Carey Lykins—under scrutiny for a significant boost in compensation last year—was the first witness called Monday morning by the Indiana Utility Regulatory Commission.

Lykins tried to make a case for a 14.7-percent increase in water rates for 300,000 Citizens customers in Marion and surrounding counties. He also had to explain his nearly $3 million in compensation last fiscal year, as well as the pay and bonuses other top executives received.

Citizens filed a request with the IURC in February to increase its annual operating revenue from water rates 14.7 percent, or $25.3 million. The hike would raise the average residential customer’s water bill from $31 to $34 per month.

Lykins told commissioners the utility needs to boost its revenue because it previously has relied too heavily on debt to pay for capital projects.

“It’s not a healthy or sustainable system,” he said.

Recent pay bumps for Citizens' top brass have drawn additional scrutiny of the utility’s need to increase costs for consumers.

Last December, IBJ reported that  Lykins earned $2.84 million in salary, bonus and incentive pay for the year ended September 2012—compared to $1.5 million in 2011.

IURC Chairman Jim Atterholt pressed the issue Monday after Lykins said his and his executives’ pay was in line with market rates based on data from consultating firm Mercer.

Atterholt noted that the Mercer study made comparisons to much larger energy companies. Comparing Citizens, which has 1,200 employees, to those firms would be akin to 1,700-employee ExactTarget paying its leaders like 430,000-employee IBM does, he said.

Lykins criticized Indianapolis media for how it has reported on his pay.

“It seems to me that there have been some sensational sound bites, let me say, around my compensation and others,” he said.

The IURC’s evidentiary hearing on the rate increase is scheduled to run through Friday.
 

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  • sensational soundbite
    What about his nearly 100% salary increase is not sensation? When we find ourselves paying private corporate rates for public good projects that are privately managed, we are doomed. If Lykins will not accept 1M as salary and no more, find someone to replace him. He clearly thinks to highly of himself and not very highly of his public obligation. Keep the sensational soundbites coming.
  • not following through on what Ballard said
    The paragraph below is copy/pasted from the April 10, 2010 article titled "City Approval of Citizens Energy Deal Could Come in May" 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 Just sayin
  • Marine57
    That $3,000,000 bonus for the CEO cost the 300,000 citizens $10 each last year...
  • Commission Talks But No Action
    When will the utility commission members do their job? Without a forced rollback in the salaries of this monopoly the hearing is just a formality to absorb some of the heat from irate customers like myself.
  • Water
    Salary hikes vs water rates increase. Big brother understands the difference but will concede to water increases. These hearings are a formality but do expose vital evidence that once again Citizens can make water increases grow into salary increases.
  • Politics as Usual
    From the first day I read about Citizens, the nonprofit, taking over and using the funds to repair infrastructure, not raising rates, etc., I knew all this was coming. It never made any sense. Can we get the former water company back?
  • Absurdly Overpaid
    I cannot understand why anyone would be so absurdly overpaid. Keep investigating these guys. They are stealing from us all.

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