IBJOpinion

EDITORIAL: Citizens' utility deal is smart move

 IBJ Staff
March 13, 2010
Back to TopCommentsE-mailPrintBookmark and Share
IBJ Editorial

Much work remains before the city’s water and sewer utilities are sold to Citizens Energy Group, but the general outline of the deal makes sense and deserves support—not political posturing—as final terms are hammered out.

The deal, announced March 10 by Mayor Greg Ballard, calls for Citizens to assume the city’s $1.5 billion in utility debt and pay $425 million in cash to gain control of the water and sewer systems.

Citizens has been a good steward of the city’s natural gas utility for more than 100 years. We see no reason the company wouldn’t be equally careful with the city’s water and sewer utilities.

Indeed, Indianapolis has a unique opportunity to place these vital assets in friendly hands. Citizens’ status as a public charitable trust means ownership is essentially public, but without the political ramifications and bureaucracy usually associated with government ownership.

The biggest advantage to the deal, of course, is the $425 million in sale proceeds that will flow to the city for infrastructure repairs and upgrades. Securing that money would be huge for a government that has blocks of crumbling sidewalks and miles of bumpy roads to contend with.

The infrastructure cash wouldn’t matter if the deal were a loser in other respects, but it’s a major benefit that can’t be overlooked. Where else would the money come from to fix these festering problems? Taxing our way out of trouble isn’t realistic, politically or economically.

Early opposition to the deal has focused on the perceived lack of public control over rate increases if the utilities aren’t government-owned. Rate increases are a legitimate concern, but hand-wringing about the city’s political class’ relinquishing control isn’t justified.

The water utility has only been owned by the city since it was purchased from Merrillville-based NiSource Inc. in 2002 for $515 million. The city’s ownership of the sewer utility predates that, but ownership shouldn’t be confused with control. Federal mandates mean costly upgrades regardless of who owns the sewer system.

The state’s Indiana Utility Regulatory Commission will continue to vet requests for rate increases, as it does with all utilities. Under city control, the local water utility has shown up on the IURC’s docket frequently in recent years.

The commission is weighing a request for a 35-percent rate increase for capital improvements and approved an emergency 11-percent hike last year.

Rates will go up under Citizens, but by 2025 the amount consumers pay is projected to be 25 percent less under Citizens’ watch than under other scenarios.

Supporting the deal doesn’t mean hard questions shouldn’t be asked. Citizens will have to quell fears that taking on extra debt won’t impair its bond ratings, which would drive up the cost of borrowing and future projects.

On balance, though, it’s difficult to see a better scenario for the city’s water and sewer utilities and its deteriorated infrastructure. City and state officials should approve the deal as quickly as possible.•

__________

To comment on this editorial, write to ibjedit@ibj.com.

ADVERTISEMENT

  • There is no freelunch
    Where do you clowns think this money is going to come from? It will come out of the pockets of the citizens. With this deal, we are guaranteed to have $425 million more extracted from our pockets than before. Meanwhile, the Mayor and his cronies can hand out a plethora of wasteful contracts that will result in more improperly paved and constructed streets, more improperly located and constructed sidewalks, badly designed bike lanes, and other short- and long-term boondoggles.

    While I have no doubt that Citizens Gas can more efficiently bill its customers, etc., there will be no great savings to be garnered because of the massive mismanagement of this asset over the last half-dozen years or so.

    Maybe, if the Mayor and the Council would engage in real long-term thinking (but that would take a brain) and stop handing out contracts and sanctioning the theft of taxpayer money or just simply stealing it themselves, there would be adequate money to fund critical city services. Instead they use the city resources to bestow favors and build empires instead of actually delivering city services.

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Of what value is selling alcoholic beverages to State Fair patrons when there are many families with children attending. Is this the message we want to give children attending and participating in the Fair, another venue with alooholic consumption onsite. Is this to promote beer and wine production in the state which are great for the breweries and wineries, but where does this end up 10-15 years from now, lots more drinkers for the alcoholic contents. If these drinks are so important, why not remove the alcohol content and the flavor and drink itself similar to soft drinks would be the novelty, not the alcoholic content and its affects on the drinker. There is no social or material benefit from drinking alcoholic beverages, mostly people want to get slightly or highly drunk.

  2. I did;nt know anyone in Indiana could count- WHY did they NOT SAY just HOW this would be enforced? Because it WON;T! NOW- with that said- BIG BROTHER is ALIVE in this Article-why take any comment if it won't appease YOU PEOPLE- that's NOT American- with EVERYTHING you indicated is NOT said-I can see WHY it say's o Comments- YOU are COMMIES- BIG BROTHER and most likely- voted for Obama!

  3. In Europe there are schools for hairdressing but you don't get a license afterwards but you are required to assist in turkey and Italy its 7 years in japan it's 10 years England 2 so these people who assist know how to do hair their not just anybody and if your an owner and you hire someone with no experience then ur an idiot I've known stylist from different countries with no license but they are professional clean and safe they have no license but they have experience a license doesn't mean anything look at all the bad hairdressers in the world that have fried peoples hair okay but they have a license doesn't make them a professional at their job I think they should get rid of it because stateboard robs stylist and owners and they fine you for the dumbest f***ing things oh ur license isn't displayed 100$ oh ur wearing open toe shoes fine, oh there's ONE HAIR IN UR BRUSH that's a fine it's like really? So I think they need to go or ease up on their regulations because their too strict

  4. Exciting times in Carmel.

  5. Twenty years ago when we moved to Indy I was a stay at home mom and knew not very many people.WIBC was my family and friends for the most part. It was informative, civil, and humerous with Dave the KING. Terri, Jeff, Stever, Big Joe, Matt, Pat and Crumie. I loved them all, and they seemed to love each other. I didn't mind Greg Garrison, but I was not a Rush fan. NOW I can't stand Chicks and all their giggly opinions. Tony Katz is to abrasive that early in the morning(or really any time). I will tune in on Saturday morning for the usual fun and priceless information from Pat and Crumie, mornings it will be 90.1

ADVERTISEMENT