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Regulators approve Indianapolis water utility transfer

Francesca Jarosz
July 13, 2011
Keywords
Indiana Utility Regulatory Commission, Indianapolis Department of Waterworks, Regulation, Utilities, Water
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State regulators on Wednesday approved a proposal to transfer control of Indianapolis’ water and sewer utilities to a local not-for-profit trust.

The $1.9 billion sale will put management of the utilities, which were owned by the city and run by private operators, into the hands of Citizens Energy Group, a provider of gas, steam and chilled water.

It also transfers about $1.5 billion in city utility debt to Citizens and frees up $425 million for the city to invest in roads, sidewalks, bridges and other infrastructure – as well as potential projects such as demolishing abandoned homes and priming infrastructure for economic development deals.

The City-County Council approved the sale last July, and approval by the Indiana Utility Regulatory Commission was the last step needed to finalize it.

“The stage is now set for the city to make unprecedented investments in our community that will help to improve quality of life for decades to come,” Mayor Greg Ballard said in a prepared statement.

The city and Citizens will review documents needed to complete the transaction in coming weeks before the deal is finalized. Citizens will assume the city’s contract with United Water to operate the wastewater system and has offered positions to most employees at Veolia, the private operator of the water system.

 Citizens has projected it can save between $40 million and $60 million per year by combining the operations of the utilities under one umbrella.

If those savings levels are achieved, it will help curb projected triple-digit rate increases projected over the next 15 years. If projections miss, residents could see their rates increase above those estimates to pay off hundreds of millions in debt for the sale.

Rather than elected officials or their appointees, Citizens’ board of directors will now make decisions about when to seek rate increases and by how much. The board is appointed by a board of trustees.

The Indiana Utility Regulatory Commission, whose members are appointed by the governor, also will have to approve rate increases.

 

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  • Sold Out
    TheTruthDecember 5, 2011 7:11 PM
    Mark this is an absolute true statement. The Mayor and the utility regulatory commission screwed the city on the transfer of the Water company. City Assets transferred to a private company ? What a ponzi scheme. The mayor, the council and the Indiana Utility Regulatory committee just stiffed the citizens of Indianapolis. Indy Citizens will pay higher bills for water and sewer (a necessity). Whats happening to our society ?
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  • why spend?
    JoePJuly 13, 2011 10:13 PM
    how about not spending the $425M, and instead creating a rainy day fund. They can invest it conservatively and use the returns for improvements. You can spin it whatever way you want, but this is a sale of an asset. So, I hope they don't waste this one timer on the 'money pit' road projects. If anything, they should spend it on so needed sewer/water project. However, those don't win you elections.
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  • Stiffing the Marion County Citizens
    Charlie PonziJuly 13, 2011 6:06 PM

    Gee if the 425 million were just a local property tax to the citizenry (assuming you itemize on Schedule A of your 1040) you could have deducted your portion of the cost against your Federal income and saved federal taxes for most about 25% of your portion of the cost.

    Since all of us would no have to pay what should have been property taxes as higher water and sewer rates we will not be able to deduct the cost. So the after tax cost of this TAXPAYER RIPOFF has not been undertaken in the best interest of the citizenry.

    I am glad all the fat cat buddies of Mayor Marine are lining their pockets from attorneys to bankers and now his pet/buddy contractors.
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  • never been a good thing
    Mark DeBehnkeJuly 13, 2011 5:49 PM
    Here goes the trail to higher prices. Privatized utilities under the guise of a trust have never benefitted the consumer. The city should be running the utilies for no profit. Free market for absolute necessities always screws the public.
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    1. As a St. Vincent employee of over 20 years, I am saddened and disheartened by this announcement. Unfortunately, as the healthcare "industry" continues on this political and corporate path, all that St. Vincent Hospital has stood for spiritually for its employees and this community is being sucked dry. I know it truly has no choice. It is not just Obamacare or just competition or just any single thing. This trend started long before I was even born when the government became involved in healthcare and it became an "industry." I grieve for those who will lose their jobs, one of whom may be me, but I also grieve for this hospital which I have served for over 20 years. May God give us and it the grace to withstand the future of healthcare.

    2. Why do people constantly harp on this issue and act ignorant about what a city population measures? A city's population is the city's population. There is no argument or debate about it. If you want to measure the density of a city--measure it. If you want to measure the size of a metropolitan area, then measure the metropolitan population. City boundaries cover different sized areas--and they always have (though the disparity has probably increased since about 1900 or so when more cities began annexing their surrounding communities). For example, San Francisco only covers 49 square miles while Houston cover nearly 600 square miles. No one argues about the population rankings of either city even though they clearly cover extremely different sized areas. Indianapolis is the 13 largest city by population in the U.S. That is a fact. While the population of a metropolitan area may give you a better sense of how large a community is, as noted, even metro areas can vary widely in the size of geographic area they cover--so that is not a perfect comparison either.

    3. If Whole Foods went in, I doubt the Nora one would stay open, and with all those customers coming to Broad Ripple traffic would be horrible, and forget about a run to the grocery on weekend nights. I think concern over the number of apartments is misplaced, but the 400 space parking garage has me concerned - someone needs to ask the developer just how much traffic they think this development is going to generate. I am not against more neighborhood residents, but heavy commercial traffic going in and out at that location sounds like a mess.

    4. I thought everyone was innocent until guilt was proven. Seems people have already convicted Reggie in the press. My nephew was a good kid and is a good man, more to this story im sure

    5. Going by the Marion County population only is of little use. 13th largest? No Way! To judge the real size of a metro area, the easy way is to look at the Arbitron rating list. Indianapolis hovers around 40th largest in the nation--sometimes more, sometimes less. Advertisers want to know exactly how large the population is before they buy radio advertising. Arbitron figured it out long ago. Indianapolis is estimated at 1,427,500. The real #13 is Seattle-Tacoma with a metro population of 3,470,400. So, the population of just Marion County is completely irrelevant to anything useful as far as metro area planning.

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