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City approval of Citizens Energy deal could come in May

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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.
 

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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.

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  1. Aaron is my fav!

  2. Let's see... $25M construction cost, they get $7.5M back from federal taxpayers, they're exempt from business property tax and use tax so that's about $2.5M PER YEAR they don't have to pay, permitting fees are cut in half for such projects, IPL will give them $4K under an incentive program, and under IPL's VFIT they'll be selling the power to IPL at 20 cents / kwh, nearly triple what a gas plant gets, about $6M / year for the 150-acre combined farms, and all of which is passed on to IPL customers. No jobs will be created either other than an handful of installers for a few weeks. Now here's the fun part...the panels (from CHINA) only cost about $5M on Alibaba, so where's the rest of the $25M going? Are they marking up the price to drive up the federal rebate? Indy Airport Solar Partners II LLC is owned by local firms Johnson-Melloh Solutions and Telemon Corp. They'll gross $6M / year in triple-rate power revenue, get another $12M next year from taxpayers for this new farm, on top of the $12M they got from taxpayers this year for the first farm, and have only laid out about $10-12M in materials plus installation labor for both farms combined, and $500K / year in annual land lease for both farms (est.). Over 15 years, that's over $70M net profit on a $12M investment, all from our wallets. What a boondoggle. It's time to wise up and give Thorium Energy your serious consideration. See http://energyfromthorium.com to learn more.

  3. Markus, I don't think a $2 Billion dollar surplus qualifies as saying we are out of money. Privatization does work. The government should only do what private industry can't or won't. What is proven is that any time the government tries to do something it costs more, comes in late and usually is lower quality.

  4. Some of the licenses that were added during Daniels' administration, such as requiring waiter/waitresses to be licensed to serve alcohol, are simply a way to generate revenue. At $35/server every 3 years, the state is generating millions of dollars on the backs of people who really need/want to work.

  5. I always giggle when I read comments from people complaining that a market is "too saturated" with one thing or another. What does that even mean? If someone is able to open and sustain a new business, whether you think there is room enough for them or not, more power to them. Personally, I love visiting as many of the new local breweries as possible. You do realize that most of these establishments include a dining component and therefore are pretty similar to restaurants, right? When was the last time I heard someone say "You know, I think we have too many locally owned restaurants"? Um, never...

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