Industrial support for utility sale to cost $1.5 million

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The price to get big industrial firms to support the sale of the city’s water and sewer utilities to Citizens Energy Group: at least $1.5 million.

Documents the city and Citizens filed Friday with the Indiana Utility Regulatory Commission show that the city agreed to make the one-time payment to resolve concerns of the so-called Water/Sewer Industrial Group.

The group consists of Eli Lilly and Co., National Starch LLC, Rolls-Royce Corp. and Vertellus Agriculture & Nutrition Specialties.

A letter sent to the industrial group by city and Citizens officials noted the big wastewater customers were concerned with increases they pay in the form of an “excessive strength surcharge” that amounts to more than $11 million annually.

Besides the one-time, $1.5 million payment to industrials, which will come out of a $40 million escrow fund the city set up last year for the deal, Citizens agreed to work with industrials on a cost-of-service study to be presented in an upcoming rate case.

“I believe it is a reasonable resolution of the issues the industrial group raised regarding the proposed acquisitions and a fair outcome for the [Citizens Water Authority] and ratepayers, especially in light of the fact the payment it contemplates will be made by the city from the escrow account to be funded with cash the city receives as a result of the wastewater acquisition,” Citizens CEO Carey Lykins said in a prepared statement.

Citizens and the city on Friday filed testimony with the IURC supporting a proposed settlement announced earlier this month involving industrials, the Office of Utility Consumer Counselor and suburban communities served by the utilities.

Among terms of the settlement, Citizens agreed to document savings generated by the transfer.

The IURC is expected by the end of summer to OK the sale of the water and sewer utilities to Citizens—a deal worth $1.9 billion.

Citizens said it expects the sale will bring $60 million in annual savings, and combined water and wastewater rates 25 percent lower than currently projected.

The city plans to use $425 million in proceeds to make infrastructure improvements and to tear down abandoned houses.

The proposed deal is turning out to be a moneymaker for several local professional firms. For example, Indianapolis law firm Ice Miller LLP has billed more than $3.4 million for legal services to Citizens – the bulk of the $7.1 million in profession fees Citizens has incurred so far.

The city has incurred more than $9 million in transaction costs, including more than $2 million to local law firm Baker & Daniels LLP. Citigroup Global Markets will pocket at least $5 million.

Also, the city is paying current Indianapolis Water operator Veolia a contract breakup fee of $29 million.



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  1. So much for Eric Holder's conversation about race. If white people have got something to say, they get sued over it. Bottom line: white people have un-freer speech than others as a consequence of the misnamed "Civil rights laws."

  2. I agree, having seen three shows, that I was less than wowed. Disappointing!!

  3. Start drilling, start fracking, and start using our own energy. Other states have enriched their citizens and nearly elminated unemployment by using these resources that are on private land. If you are against the 'low prices' of discount stores, the best way to allow shoppers more choice is to empower them with better earnings. NOT through manipulated gov mandated min wage hikes, but better jobs and higher competitive pay. This would be direct result of using our own energy resources, yet Obama knows that Americans who arent dependent of gov welfare are much less likely to vote Dem, so he looks for ways to ensure America's decline and keep its citizens dependent of gov.

  4. Say It Loud, I'm Black and Ashamed: It's too bad that with certain "black" entertainment events, it seems violence and thuggery follows and the collateral damage that it leaves behinds continues to be a strain on the city in terms of people getting hurt, killed or becoming victims of crimes and/or stretching city resources. I remember shopping in the Meadows area years ago until violence and crime ended make most of the business pack you and leave as did with Lafayette Square and Washington Square. Over the past 10 to 12 years, I remember going to the Indiana Black Expo Soul Picnic in Washington Park. Violence, gang fights and homicides ended that. My great grandmother still bears the scares on her leg from when she was trampled by a group of thugs running from gun fire from a rival gang. With hundreds of police offices downtown still multiple shootings, people getting shot downtown during Black Expo. A number of people getting shots or murdered at black clubs around the city like Club Six on the west side, The Industry downtown, Jamal Tinsley's shot out in front of the Conrad, multiple fights and shootings at the skating rinks, shootings at Circle Center Mall and shooting and robberies and car jackings at Lafayette Mall. Shootings and gang violence and the State Fair. I can go on and on and on. Now Broad Ripple. (Shaking head side to side) Say It Loud, I'm Black and I'm Ashamed.

  5. Ballard Administration. Too funny. This is the least fiscally responsive administration I have ever seen. One thing this article failed to mention, is that the Hoosier State line delivers rail cars to the Amtrak Beech Grove maintenance facility for refurbishment. That's an economic development issue. And the jobs there are high-paying. That alone is worth the City's investment.