Whitestown council hears presentation on proposed sale of town water utility to Citizens Energy Group

Whitestown Town Council members and residents heard detailed presentations July 8 on a proposed sale of the town’s water utility to Citizens Energy Group, including a proposed purchase price of $37,000,000, projected customer bill savings and a regulatory timeline that would require approval from the Indiana Utility Regulatory Commission.

The presentations were given by Dan Cutshall, the town’s engineer of record for nearly 20 years; Jeff Harrison, president and CEO of Citizens Energy Group; and Jeff (Hallman/Willman), Citizens vice president of water operations. Council President (presiding officer) opened the meeting and emphasized that the session was informational and that no vote would be taken that night.

The presentations summarized Whitestown’s current water arrangements and options. Cutshall said Whitestown has no active treatment plant or wells and currently purchases all water from Citizens as a wholesale customer. He described two town pump stations (one he said can pump about 2,000,000 gallons per day and the other about 6,000,000 gallons per day), and said average daily use in Whitestown is about 1,600,000 gallons per day with peak daily demand roughly double that amount. Cutshall added the town’s current water contract with Citizens is limited to a capacity figure that the transcript did not specify and that negotiating additional contract capacity would be costly.

Cutshall also reported results of statutorily required appraisals: an engineering replacement-cost appraisal of about $83,000,000 and two market appraisals that agreed to a fair-market value of about $38,000,000. He described Citizens’ offer to purchase the utility as a viable option to provide additional capacity while minimizing rate increases for residents.

Jeff Harrison said Citizens is a large, municipal, Indianapolis-based utility regulated by the Indiana Utility Regulatory Commission (IURC) and that the company “simply provide[s] service at cost.” Harrison and Jeff Hallman described Citizens’ system (roughly 75% surface water, 25% groundwater), its existing retail and wholesale customers, its 50-year planning process and past work with nearby Westfield. Hallman said Citizens has experience integrating nearby systems and argued that Citizens’ retail service could provide more interconnections and redundancy for Whitestown’s distribution system.

Citizens representatives presented Citizens’ estimate that typical Whitestown residential customers would see lower monthly bills under Citizens retail rates. The presentation included a sample bill comparison based on a 5,000-gallon monthly use: Citizens’ illustrative bill was $44.69, compared with a Whitestown “inside” bill of $54.18 and an “outside” bill of $66.47, representing illustrative savings of roughly 18% (inside) and 33% (outside). Citizens and town presenters said the offer would avoid an estimated $20 million to $30 million cost to add contract capacity on a wholesale basis, and that Citizens would not seek to drill local groundwater in Whitestown because the area has limited aquifer capacity.

The meeting included a public hearing during which more than a dozen residents spoke. Speakers raised questions about long-term rates, whether Citizens would pass costs for serving Lebanon’s LEAP project through the Whitestown area, impacts on wastewater billing (the town does not intend to sell sewer service), mineral content and water softening, whether local employees would retain jobs, and how the town would spend proceeds from any sale. Kevin Russell, a resident and former Whitestown councilor, said Citizens’ own earlier studies contemplated a long-term pipeline from the Ohio River and questioned whether negotiations fully accounted for cross-territory costs. Residents also asked whether they would receive two bills (Citizens for water and Whitestown for sewer); council members confirmed two bills would remain likely because the town does not plan to sell the wastewater utility.

Council discussion reiterated that tonight’s meeting was informational only. Councilor Nichols said selling the water utility would shift responsibility for future capacity expansion and related costs from Whitestown to Citizens, and that Citizens’ regulation by the IURC provides a formal process for rate review and consumer representation. The council president said some of the sale proceeds would be needed to pay down utility debt and that other proceeds could be used for capital needs such as fire apparatus or future infrastructure.

The council gave direction for next steps but did not take formal action on the sale. The presiding officer directed Town Manager/Barr (referred to in the meeting as Miss Barr) to arrange a special session about two weeks later for a first reading of an ordinance; the council indicated a second reading could occur at the regular August meeting (August 13) and that if the council approves a purchase agreement it would file a joint petition with the IURC in the September–October timeframe, with an expected IURC order projected in March–April of the following year. Citizens officials said a successful transaction would require IURC approval and a multi-step regulatory process.

No formal vote to sell or approve an asset purchase agreement took place at the July 8 meeting. The council approved the meeting agenda and later approved adjournment by voice votes earlier and later in the session, respectively.

The council and Citizens pledged further public engagement: the council president said council members would hold district-level outreach sessions and that the special session and subsequent hearings would be publicly noticed. Citizens representatives and Dan Cutshall said they would return to answer questions at future meetings if the council places an ordinance for first reading.