Ballard Touts $1.9 Billion Deal To Transfer Water, Sewer

Citizens Energy Group Would Take Control Of Utilities Under Plan

Indianapolis Mayor Greg Ballard joined officials from Citizens Energy Group Wednesday morning in touting a plan to transfer control of the city's water and sewer utilities to Citizens in exchange for $1.9 billion.

Under the plan, Citizens, a nonprofit charitable trust, would be responsible for the operation of and improvements to both services.

Analysis: Ballard's Billion Dollar Deal

Ballard warned that under the current arrangement for operating the water and sewage utilities, customers were in line to see massive rate increases within the next decade because of $4 billion in improvements, some federally mandated, that will be completed in the coming years.

If Citizens assumes control of the utilities, which are now owned by the city and operated by private companies, there would still be rate increases, but officials promised they won't be as dramatic -- about 25 percent less by 2025.

"With this agreement, I am rejecting private ownership of our water and wastewater system while embracing the benefits that come from private sector efficiency and expertise," Ballard said.

Ballard said the influx of $425 million from the deal in three installments would allow large-scale infrastructure improvements in Indianapolis, including repairs to roads, bridges and sidewalks which have languished over the years because of little available funding.

Citizens would assume $1.5 billion of debt the city's utilities currently have. It already operates gas, steam and chilled water systems for the city.

"By combining five utilities, we can get some significant savings for the benefit of customers," said Carey Lykins, president and CEO of Citizens.

Critics contend that the city would relinquish too much control of the utilities if Ballard's plan is approved and that oversight would be too lax.

"(My water bill) went up from $43 to $70," said Evelina Mays. "I don't think it's going to be a change. I think it's going to get higher."

Ballard said that while there will be some increase, the sale will provide savings over the long term compared with other scenarios.

"What has been going on before was that they flat-lined rates for five years, so you have to pay sooner or later," he said.

The city began soliciting proposals from groups interested in running Indianapolis' water and wastewater utilities more than seven months ago. Citizens was selected from 24 groups that responded to the request.

For a transfer to Citizens to be completed, the utilities' public works boards, City-County Council and Indiana Utility Regulatory Commission would have to approve the move.

Indianapolis' water system serves more than 300,000 homes in Marion County and six surrounding counties. About 230,000 homes are served by the wastewater system.

A series of public meetings will be held to discuss the plan. The city and Citizens would like to complete the sale by the end of the year.

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