INDIANAPOLIS (AP) - State regulators criticized the pay of an Indianapolis utility company’s top executives while decided to scale back a requested water rate increase.
The Indiana Utility Regulatory Commission said Citizens Energy executives’ compensation was excessive and the utility had poor customer service response, citing those as reasons for approving a 9 percent rate increase rather than the nearly 15 percent the utility wanted.
Citizens Energy CEO Carey Lykins was paid $2.9 million in 2012 - nearly double what he made the previous year and more than triple what the leaders of other large municipal gas utilities earned, The Indianapolis Star reported.
The longtime natural gas utility, which is organized as a nonprofit public trust and serves 300,000 Indianapolis-area customers, bought the city’s water and sewer services in 2010.
The regulatory commission said Wednesday that Citizens should realign compensation “so that it is more compatible with actual municipal-based expenses.”
Citizens Energy said a consultant was reviewing its executive compensation, the results of which should be available to the public by mid-year. The company said in December it had cut pay for its top executives by an average 27 percent, with Lykins seeing his compensation going down by more than a third, to $1.9 million last year.
Citizens said the rate hike was needed to update aging water and sewer lines. It said the system had 730 water main breaks last year, with some sections dating to the 1800s.
“Having less money does obviously give us a short fall and Citizens will now have to determine what projects we can still do with the money we were granted,” company spokeswoman Sarah Holsapple told WISH-TV.
The utility commission said it was opening a review of Citizens’ management of its billing operations and call centers. The agency said that in some months, one out of four callers to the company hangs up before receiving service because of long wait times.
Holsapple said Citizens found customer service problems when it took over the water and sewer utilities.
“We’ve been transparent about that, we’ve been apologetic about that and we’ve certainly been trying to fix that,” she said.
The Indianapolis-based Citizens Action Coalition, a frequent critic of utilities, said the action against Citizens Energy was justified.
“We applaud the commission for finally holding Citizens accountable for their outrageous violations of the public trust and the total disregard they hold for the prudent use of ratepayer money,” said Kerwin Olson, the group’s executive director.
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