Officials have reached an agreement for the transfer of Westfield Utilities to Citizens Energy Group. The $91 million deal will pay off Westfield Utilities’ $45 million debt and provide the city with $40 million for infrastructure and future projects.
“The transfer of Westfield Utilities to Citizens will secure our vital water resources with a trusted utility operator, while providing our community funding for infrastructure improvements and debt repayment. This milestone agreement is recognition that this transaction will bring extraordinary value to utility customers and taxpayers,” stated Mayor Andy Cook.
Westfield Chief of Staff Todd Burtron said the Indiana Office of Utility Consumer Counselor also agreed to the deal, which was filed on Oct. 16. Burtron described the OUCC as an “automatic intervener” that will “protect rate payers and the $91 million agreement.”
“They align the asset purchase agreement – put the stake in the ground for future rate adjustments,” he said. “Their life blood is to protect the tax payer.”
Major provisions of the agreement include Indiana Utility Regulatory Commission approval of the transfers as in the public interest; the current schedule of rate adjustments adopted by the Westfield City Council through 2016 would be retained; and rate increases after 2016 would require approval through the IURC process, which includes public input.
“The OUCC wanted all these changes,” Burtron said.
Another major difference in the original agreement was the ownership of cell phone towers on water towers. Burtron said the city receives $120,000 annually for the rental space. While the agreement allowed Westfield to retain the fee, Citizens was told that the revenue would be taxed to them since it was connected to their property.
“Rate payers will feel the benefit of future revenues,” Burtron said.
On Sept. 24, 2012, Cook and Citizens announced the plan to transfer the community’s water and wastewater utilities to Citizens for a purchase price of $91 million. After a public input process that included four town hall meetings, the Westfield City Council approved the utility transfer by a 6-1 vote on Nov. 5, 2012. The proposed transfer was filed with the IURC on Nov. 20, 2012.
“We are pleased that a resolution was able to be reached among the parties on a series of very complicated issues that will result in the transfer of Westfield’s assets,” stated Indiana Utility Consumer Counselor David Stippler. “The City of Westfield has been an excellent steward of its utility assets, which made our office’s analysis in this case much easier to conduct and complete.”
The transfer will provide additional revenue for the city. Citizens Westfield will pay approximately $2 million per year in property taxes that can be used for schools and other budgetary needs. Westfield Utilities does not pay property taxes.
“We look forward to creating Citizens Westfield, an efficient gas, water and wastewater utility that continues to deliver an outstanding customer experience, as we make investments to ensure safety, reliability and water supply necessary for the community’s growth,” stated Citizens President Carey Lykins.
Officials said benefits of the utility transfer include water supply security, greater efficiency, a smooth transition for customers and no job losses as Citizens has offered positions to current Westfield Utilities employees.
Burtron said the agreement now goes before the IURC on Oct. 31 and Citizens will begin working on bond payments mid to late November. Officials said Westfield Utilities customers will see few changes during the first year of the transfer.
