Regulators to investigate Citizens Energy’s management, billing practices

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INDIANAPOLIS, Ind. (March 19, 2014)—The Indiana Utility Regulatory Commission (IURC) announced Wednesday they would open an investigation into the management practices, including billing and call center issues, of Citizens Energy Group.

The commission cited several issues, including customer service quality, billing compliance with approved rules, regulations and tariffs, and payment application compliance with state and federal laws.

IURC officials said one out of five callers hang up prior to receiving service due to long wait times.

A hearing is scheduled for April 22 at 11 a.m.

The announcement of the investigation comes as the IURC found executive pay was not appropriate for municipal utility. The IURC decreased recoverable executive compensation by approximately $900,000 for 16 employees by eliminating the Executive Incentive Plan and cutting their Short Term Incentive Plan increases by 38 percent. The reduction to executive pay increases takes the amount from 47 percent to 9 percent, which is equal to the average increases nonexecutive employees receive. These reductions in executive pay and other operations and maintenance expenses resulted in a total decrease of $1.4 million.

Citizens Energy issued the following statement:

Citizens Energy Group is currently reviewing the water rate order received today from the Indiana Utility Regulatory Commission (IURC). The IURC approved a 9 percent increase in revenue for the water utility. This will translate into less than a $3 per month increase in the average residential water bill.

Like the IURC, we are very concerned about the impact of rate increases on our customers. The reduction in revenue approved by the IURC does create a shortfall in funds for vital infrastructure investments. Years of under investment by past owners has resulted in a water system that experiences 700 main breaks per year, resulting in $3.5 million in repair costs and 3 billion gallons of wasted water. If Indianapolis is going to remain a world class city, it is important Citizens makes investments to upgrade its water system to ensure safety, reliability and water quality.

As evidenced by three straight J.D. Power Awards (2011-2013) for customer satisfaction, Citizens takes great pride in being an industry leader for customer service. Citizens has been and will continue to be transparent with the IURC on its combined billing and customer service practices. In combining the gas, water and wastewater utilities in 2011 and 2012, Citizens did experience some delays in responding to customers. Since then call wait times at the Citizens’ call center have been significantly reduced.

The total executive compensation program at Citizens is currently undergoing a review by a leading compensation consultant.  The results of that review should be available to the public by mid-year.