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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. If what you stated is true, then this article is entirely inaccurate. "State sells bonds" is same as "State borrows money". Supposedly the company will "pay for them". But since we are paying the company, we are still paying for this road with borrowed money, even though the state has $2 billion in the bank.

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      4. Fox has comments from several people that seem to have some inside information. I would refer to their website. Changed my whole opionion of this story.

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