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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. The deductible is entirely paid by the POWER account. No one ever has to contribute more than $25/month into the POWER account and it is often less. The only cost not paid out of the POWER account is the ER copay ($8-25) for non-emergent use of the ER. And under HIP 2.0, if a member calls the toll-free, 24 hour nurse line, and the nurse tells them to go to the ER, the copay is waived. It's also waived if the member is admitted to the hospital. Honestly, although it is certainly not "free" - I think Indiana has created a decent plan for the currently uninsured. Also consider that if a member obtains preventive care, she can lower her monthly contribution for the next year. Non-profits may pay up to 75% of the contribution on behalf of the member, and the member's employer may pay up to 50% of the contribution.

  2. I wonder if the governor could multi-task and talk to CMS about helping Indiana get our state based exchange going so Hoosiers don't lose subsidy if the court decision holds. One option I've seen is for states to contract with healthcare.gov. Or maybe Indiana isn't really interested in healthcare insurance coverage for Hoosiers.

  3. So, how much did either of YOU contribute? HGH Thank you Mr. Ozdemir for your investments in this city and your contribution to the arts.

  4. So heres brilliant planning for you...build a $30 M sports complex with tax dollars, yet send all the hotel tax revenue to Carmel and Fishers. Westfield will unlikely never see a payback but the hotel "centers" of Carmel and Fishers will get rich. Lousy strategy Andy Cook!

  5. AlanB, this is how it works...A corporate welfare queen makes a tiny contribution to the arts and gets tons of positive media from outlets like the IBJ. In turn, they are more easily to get their 10s of millions of dollars of corporate welfare (ironically from the same people who are against welfare for humans).

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