A state regulatory commission will hold a public hearing next week on Indianapolis' plan to sell its water and sewer systems to a nonprofit utility.
The Indiana Utility Regulatory Commission, which has final approval on the proposal, is also accepting written comments on the plan through Jan. 12.
"After the proposal receives a full vetting by our state government, I hope it will be promptly approved so we can invest the more than $425 million we will receive to repair our streets, bridges, and sidewalks, and take down unsalvageable abandoned homes," Mayor Greg Ballard, who has pushed for the proposal, said in a statement. "And, by 2025, Citizens' customers will enjoy rates projected to be 25% lower than they otherwise would have been and utilities that are free from local partisan politics."
A decision is expected in the spring, local reports said. The Indianapolis-Marion City-County Council approved the deal last July.
Citizens Energy Group, a nonprofit trust that currently runs the city's gas utility, would pay at least $425 million and assume nearly $1.5 billion of outstanding debt to acquire the assets. Part of the purchase agreement includes a steep increase over 30 years in the size of sewer district payments in lieu of taxes, or PILOTs, made to the city.
Ballard plans to use the cash from the sale to finance infrastructure improvements across the city and to purchase abandoned houses.
The sale of the utility systems would allow Indianapolis to avoid paying an estimated $5 billion in sewer system upgrades required under a 2005 consent decree with the Environmental Protection Agency.
Citi was the city's financial adviser on the water and sewer system sale, and Morgan Stanley advised Citizens Energy.
If the deal is approved, Citizens plans to issue its own tax-exempt bonds to finance the acquisition. The sale would likely take place early next year.