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Consumer agency: Citizens water rate hike 5 times too high

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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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  • Executive Salaries?
    I was shocked to discover the multi million dollar salaries of top executives at Citizens Energy. $3 million for the CEO and $1.5 million for Executive VPs? There is the rate increase. We have heard about sewage dumping into our creeks and streams for over 20 years, and they still can't fix it? Then again, we don't have a choice of water providers, do we?
  • Information
    Louis, There was no value transitioned from the water system for the RebuildIndy program. The value came from the waste water system due to the significant debt on the water system. Thus, the rate increases on the water system are merely the product of paying down that system's debt and paying for the ongoing needs of the system to have clean water and reliable service. Regardless, the rates on both the water and waste water systems are lower than they otherwise would have been (even with the more than $425 million invested in roads, bridges, sidewalks, and abandoned home clean up) because of the more than $100 million in annual savings gained by having these utilities managed together by the non-profit charitable trust that we know as Citizens. While rate increases are necessary to ensure we continue to have clean water and reliable service, both taxpayers and ratepayers have benefited and continue to benefit from Mayor Ballard's visionary proposal and Citizens' trusted, professional management of these utilities. The transaction was approved by a City-County Council vote of 19-10 (which included members of the three political parties on the Council at that time) following more than 60 public meetings on the subject. The politics are now gone from these vital utilities, rates are lower than they otherwise would have been, our City's climate for economic development has improved significantly, and our neighborhoods are more vibrant. For more info, visit www.indy.gov/utilities. Thanks, Chris W. Cotterill chris.cotterill@faegrebd.com
  • Bingo
    You hit it right on the head, Idyllic Indy. This is the classic shell game. The Mayor gets to claim that he has not raised taxes and the water rate payers unknowingly pay for the Mayor's re-election paving program.
    • Surprise!
      These rate increases are the part they didn't talk about when Citizens gave the Mayor $400 million for his "Rebuild Indy" slush fund and assumed ~$1.5 billion in water company debt. Makes the use of the money poorly resurfacing streets and indiscriminately tearing down buildings with no redevelopment strategy in place look even less palatable when we actually start to see the rate increases needed to pay for the Mayor's supposedly "free" programs.

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      1. The east side does have potential...and I have always thought Washington Scare should become an outlet mall. Anyone remember how popular Eastgate was? Well, Indy has no outlet malls, we have to go to Edinburgh for the deep discounts and I don't understand why. Jim is right. We need a few good eastsiders interested in actually making some noise and trying to change the commerce, culture and stereotypes of the East side. Irvington is very progressive and making great strides, why can't the far east side ride on their coat tails to make some changes?

      2. Boston.com has an article from 2010 where they talk about how Interactions moved to Massachusetts in the year prior. http://www.boston.com/business/technology/innoeco/2010/07/interactions_banks_63_million.html The article includes a link back to that Inside Indiana Business press release I linked to earlier, snarkily noting, "Guess this 2006 plan to create 200-plus new jobs in Indiana didn't exactly work out."

      3. I live on the east side and I have read all your comments. a local paper just did an article on Washington square mall with just as many comments and concerns. I am not sure if they are still around, but there was an east side coalition with good intentions to do good things on the east side. And there is a facebook post that called my eastside indy with many old members of the eastside who voice concerns about the east side of the city. We need to come together and not just complain and moan, but come up with actual concrete solutions, because what Dal said is very very true- the eastside could be a goldmine in the right hands. But if anyone is going damn, and change things, it is us eastside residents

      4. Please go back re-read your economics text book and the fine print on the February 2014 CBO report. A minimum wage increase has never resulted in a net job loss...

      5. The GOP at the Statehouse is more interested in PR to keep their majority, than using it to get anything good actually done. The State continues its downward spiral.

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