Wednesday, March 19, 2014

IURC Slaps Citizens Energy On The Wrist And Then Okays 9% Water Rate Increase

Citizens Energy initially asked for a 14.7% increase in Indianapolis water rates, or a hike of $25.3 million in operating revenues. During the hearing of its rate increase, the nonprofit utility lowered its rate increase request to 13.26%, or $23 million in annual operating revenues. The IURC today approved a 9% increase that will generate about $15.7 million in annual operating revenues. That's a lot higher than the 2.6% rate increase the Indiana Office of Utility Consumer Counselor contended that the rate increase evidence justified. So we wouldn't feel too bad about the decision, the IURC put out a press release to scold Citizens Energy for paying excessive salaries to its top executives and tells us it's going to investigate the utility's billing and customer service practices. Here are the numbers the press related provided to explain the IURC's reduction from 13.26% to 9% rate increase:
  • $1.4 million for reduction in excessive executive pay paid to 16 executives;
  • $1.6 million attributed to a projected drop in water consumption;
  • $1.2 million for nonrecurring charges because Citizens had used 2 years' data from years when Veolia still operated the water utility; and
  • $2 million savings from capital expenditures that would have been allowed for current and 2015 infrastructure investments.
I've got to be thinking that Carey Lykins is celebrating a big victory tonight. You have to figure that utilities always pad their rate increase requests knowing that the IURC will make some reductions in it just to make the public believe that it's conducting a thorough review of utility rate increase requests. The bottom line is that the promised savings and smaller future rate increases promised by Mayor Greg Ballard and Citizens Energy when the deal was consummated has proven to be a load of hog wash. Ballard wanted us to believe that all that money the City got from Citizens Energy for his ReBuild Indy program was found money. No, we're paying for it through higher rate increases just as I predicted.


Anonymous said...

"excessive executive pay paid to 16 executives This is required to be a Public Trust. If they are making the rich get richer, then I have a problem with that!

Ballard did this!

Hernan Dough said...

This process has insider trading written all over it.