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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.
    Reply to CommentFlag Comment

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    1. City-County Councilor Angela Mansfield and Bob Lutz have a case of wishful thinking.

      They obviously don't really care about the cost.

      They should.

      Extending Federal Benefits to Same-Sex Couples Will Cost $898M, CBO Says

      http://www.foxnews.com/politics/2009/12/22/extending-federal-benefits-sex-couples-cost-m-cbo-says/

    2. Brett, be careful what you lie about, the truth always comes out.

      "IMS's George Honored: Tony George, Indianapolis Motor Speedway president and chief executive officer, received the inaugural Pioneering and Innovation Award at the Autosport Awards Dec. 5 in London for his leadership in the development of the Steel and Foam Energy Reduction (SAFER) Barrier. George received the award at the annual gala at the Grosvenor House on behalf of the creators of the SAFER Barrier from Prince Salman Bin Hamad Al Khalifa, the leader of the Bahrain International Grand Prix circuit. This is the fourth major award that has been presented to honor George and the SAFER Barrier development team. The SAFER Barrier also received the Louis Schwitzer Award, SEMA Motorsports Engineering Award and GM Racing Pioneer Award in 2002. The SAFER Barrier was installed in all four turns of the Indianapolis Motor Speedway a pioneer in safety for drivers, cars and tracks -- in time for the 86th Indianapolis 500 in 2002. It since has been installed at more than a dozen other tracks, and the latest iteration will be installed at the Speedway in the spring.(IMS PR), see more on my Indy Track News page.(12-7-2004)"

      As far as the cart safety team, I cannot find anything on its date of creation. The Delphi Safety team was created in 1996. For some reason there is not much info out there on defunct racing series.

    3. Great article Anthony. Glad IMS is finally being run like a business and not a personal check book to finance the "Vision".

      Things are looking up but 15 years of scorched earth won't be fixed overnight. Unfortunately the TV ratings are still poor and that won't change anytime soon with the brilliant 10 year contract signed under the former regime.

    4. Brett not sure why you wonder what he said in his quote. "''I would like to jump in a time machine, go back to 1995, and tell the owners and Tony George not to split,'' Franchitti said. ''As soon as my time machine is done, I know where I'm going.''"

      Pretty clear, he would love to go back and tell TG and the team owners not to split.

      I am not sure there is anyone who wanted the split, and I don't think there is anyone who would not like to go back and prevent the split. But, as has been discussed ad nauseum, without the split carts management by team owners would have run all of ow racing into bankruptcy. If cart had such a wonderful product, then losing IMS would not have forced it into bankruptcy. If NASCAR lost Daytona or Charlotte, it would not fail like cart did.

      Truth,

      So you predicted that cart would go into bankruptcy and cease to exist while Indycar would continue on? I missed that prediction.

    5. I want to live in a city that has a garage structure to be proud of for it's innovating design!

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