Citizens Energy board approves FY2026 budget, executive-pay adjustments, capital contributions and multiple finance items

The Citizens Energy Group and CWA Authority board on Aug. 20 approved a package of financial and administrative measures, including the fiscal year 2026 budget and 2025–2030 forecast, executive compensation adjustments, capital contributions among business units, and several routine operating resolutions.

Budget and forecast: The Compensation and Finance Committee presented the proposed FY2026 budget and five‑year (2025–2030) forecast and recommended board approval. Committee materials described planned capital spending increases to support safety and reliability investments, growth opportunities and water‑supply projects. The committee reported that aggregate debt across the enterprise is projected to remain at $2,800,000,000 throughout the forecast period and that debt‑service coverage ratios remain consistent with A‑plus or higher ratings, as presented. The board approved the budget and forecast by voice vote.

Customer benefit distribution and rate change: The board approved a customer benefit distribution for 2026 that committee materials said would reflect a gas-rate decrease in the amount of $410,000, as presented in board materials.

Capital contributions and financing authority: The board approved management recommendations for capital contributions to Citizens Resources: up to $8,000,000 from Citizens Gas and up to $5,000,000 from Citizens Water (board materials show the latter described as a $5,000,000 contribution). The board also approved a disposition‑of‑funds estimate (an Indiana statute filing requirement) for the fiscal year ending Sept. 30, 2026, and approved a consolidated thermal line‑of‑credit resolution that increases the authorized amount to $75,000,000 (materials described two existing $25,000,000 lines consolidated and a requested maximum of $75,000,000 for flexibility).

Executive compensation and staffing: The board approved executive compensation adjustments and a short‑term incentive plan for fiscal year 2026. Willis Towers Watson presented benchmarking that showed Citizens’ executive base salaries averaging about 5% below a utility peer median and target total cash about 7% below that median; when long‑term incentives typical in broader industry were included, the transcript reported an average gap of roughly 43% below that broader market. Management requested base pay adjustments effective Oct. 1, 2025, and slight increases in short‑term incentive targets to move base and target total cash closer to market benchmarks. The board approved the compensation resolution by voice vote.

Other approvals and routine motions: The board approved amended minutes from prior meetings, fuel cost and gas cost adjustments (identified in the packet as FCA 78 and GCA 167, respectively), a resolution authorizing management to submit a notice of intent to file a case with the IURC (separate from the Whitestown filing), and an extension of the AES gas transportation contract. The board also approved the third‑quarter financial statements (combined net income of $56,900,000 for the quarter as reported), and motions authorizing capital contributions noted above.

Appointments and personnel: The board approved appointment of Melissa Lawson as executive director of customer operations to succeed Curtis Popp as vice president of customer operations; Popp told the board he will retire effective Sept. 30. The board offered a special recognition of Popp’s 30 years of service.

Why it matters: the budget and forecast set capital and operating priorities for the next five years, the compensation actions aim to keep senior executives competitive in the market, and the capital contributions and credit‑line actions give management financing flexibility as projects move forward. Several approvals are contingent on external steps (for example, some financings will occur only after regulatory approvals where required).

Votes at a glance (items approved, voice votes unless noted): - FY2026 budget and 2025–2030 forecast — approved. - Customer benefit distribution (gas) — approved; $410,000 decrease reported in materials. - Capital contribution: up to $8,000,000 from Citizens Gas to Citizens Resources — approved. - Capital contribution: up to $5,000,000 from Citizens Water to Citizens Resources — approved. - Executive compensation resolution (base pay adjustments effective 10/01/2025 and short‑term incentive adjustments) — approved. - Disposition of funds estimate for fiscal year ending 09/30/2026 — approved. - Thermal line‑of‑credit consolidation and increase to $75,000,000 — approved. - Third‑quarter financial statements — approved (auditors expected to issue clean report on review). - Fuel cost adjustment (FCA 78) and gas cost adjustment (GCA 167) — approved. - Resolution authorizing management to submit a notice of intent to file with the IURC — approved. - AES gas transportation contract extension — approved. - Appointment of Melissa Lawson as executive director of customer operations (to become VP of customer operations upon Curtis Popp’s retirement) — approved.

Board materials contain additional detail and exhibits for each item approved; this account summarizes matters presented and the board’s voice‑vote approvals at the Aug. 20 meeting.