Council advances utilities transfer proposal

City-County Council members voted 19-10 Monday night to approve Republican Mayor Greg Ballard’s $1.9 billion plan to
transfer Indianapolis’ water and sewer utilities to Citizens Energy Group.

The measure still needs the blessing of the Indiana Utility Regulatory Commission, which could take months.

Council members voted largely along party lines in advancing the proposal, which Ballard says will generate $425 million
in cash that the city can use for projects such as street and bridge improvements and vacant home demolitions. Citizens also will
take over about $1.5 billion in debt obligations. The mayor announced the deal in March.

In a prepared statement, Council President Ryan Vaughn described the vote as "the most significant step forward for
the city since the passage of UniGov."

Citizens, a not-for-profit trust that provides gas, steam and chilled water service to residents in Marion County, says combining
the utilities under its umbrella will provide a number of efficiencies and keep rates lower than if the utilities remained
in city hands.

Opponents have questioned the wisdom of handing over control of city utilities. They also have been skeptical that rates
would be lower under a different ownership structure.

Democratic council minority leader Joanne Sanders argued Monday night that the deal gives Citizens too much freedom to sell
water company property and doesn't provide enough public accountability.

The city acquired the water utility in 2002 from Merrillville-based NiSource. Indianapolis Water is managed by Veolia, a
private firm that would continue to be tapped to help run the utility under Citizens, the city’s gas utility. The extent
of that partnership has not yet been specified.

Currently, the water utility has a 33-percent rate hike request pending before the IURC. Citing questionable oversight by
the city’s waterworks board and other problems with the water utility, the state’s Office of Utility Consumer
Counselor says Indianapolis Water’s rate request should be limited to 17 percent.

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