Citizens Energy board authorizes steps to acquire Whitestown water system, approves bond and interest-rate hedge

The board of directors for Citizens Energy Group and CWA Authority on Aug. 20 authorized management to pursue the acquisition of the Whitestown water system and approved three related resolutions: formation of an acquisition entity, an interest-rate hedge and a bond resolution authorizing up to $40 million in long-term debt.

Jay Ailey, Water Resources Executive, told the board Whitestown “currently serves over 6,000 customers” and has averaged about 1,500,000 gallons per day in water demand; the town’s system has grown roughly 9% per year, Ailey said. Management and Whitestown reached agreement on an asset purchase that Ailey summarized as including a $37,000,000 purchase price, a transfer of Whitestown customers to Citizens Water retail tariff rates and a plan for Whitestown employees to be either hired by Citizens or absorbed into other town government positions.

The board held a public hearing on the proposed acquisition and received no public comments. The board then voted—unanimously, by voice vote—to approve: (1) formation of Citizens Water Resources Whitestown LLC and filing a petition with the Indiana Utility Regulatory Commission (IURC); (2) an interest-rate hedge resolution to mitigate interim financing risk; and (3) a bond resolution authorizing Citizens Water to issue up to $40,000,000 of new long-term debt upon IURC approval.

Why it matters: the board and presenters described mutual benefits for both parties if the deal clears regulatory review. Citizens Water would gain “enhanced system reliability and performance” and economies of scale, while Whitestown customers were projected to see lower monthly rates—presentations cited an estimated 18% to 33% savings range for Whitestown customers—improved operations and expanded access to long-term water supply.

Regulatory and timeline details: the Whitestown town council passed an ordinance on Aug. 13 authorizing the town to enter the asset purchase agreement; the acquisition also requires approval from the Indiana Utility Regulatory Commission. Management said it intends to file a joint acquisition position with the IURC in late September or October and expects an IURC order in March or April 2026.

Financing structure: the board materials describe a structure similar to one previously used for other Citizens transactions, with Citizens Resources holding the Whitestown assets for the benefit of Citizens Water. The bond resolution authorizes proceeds to be used to fund the acquisition, establish a debt-service reserve if necessary, fund capitalized interest if necessary, and pay related issuance costs. Committee materials noted that Citizens Water will not issue the debt until after IURC approval; the interest-rate hedge was presented as a mitigation against interest-rate risk during that interim period.

Committee recommendation and vote: the Water Resources Executive Committee and the Compensation and Finance Committee recommended board approval of the resolutions. The board approved all three measures by voice vote; no roll-call tallies were recorded in the public portion of the transcript.

Next steps: management will file the acquisition position with the IURC and pursue the financing steps described in the board materials if the commission approves the transaction. The board packet includes the asset purchase agreement and related exhibits.

(Additional technical and procedural details are in the board packet and the IURC filing; this account is limited to materials presented at the Aug. 20 meeting.)