Citizens Thermal Energy Requests First Rate Adjustment in 13 Years

INDIANAPOLIS -- Citizens Thermal Energy, a division of Citizens Gas & Coke Utility, today filed a general rate petition with the Indiana Utility Regulatory Commission (IURC) seeking approval to increase its steam utility operating revenues.

Citizens Thermal Energy operates the nation's second largest steam and chilled water district serving commercial buildings and industries throughout the Downtown Indianapolis area.

Today's filing marks the first steam rate increase request for Citizens Thermal Energy since it was acquired from Indianapolis Power & Light in 2000. If approved, the rate increase would be the first increase in steam rates since 1993. Under a settlement order issued by the IURC in June 2004, Citizens Thermal was required to file a rate petition no later than January 1, 2007. Citizens Thermal has not yet defined the revenue requirement that will be requested in its full rate case.

Citizens Thermal states in the petition that the rate adjustment is necessary to cover increasing expenses for operations and maintenance of equipment, investments in existing equipment, extensions and replacements, and debt service.

“Citizens Thermal has been able to avoid a rate increase for 13 years through continuous efforts to hold down costs. However, since 1993 we have seen annual increases in the full range of business expenses. We also have made substantial investments to reduce air emissions and improve efficiency at our Perry K Steam Plant. Sound financial management now dictates that we seek a rate adjustment to recover the increasing cost of providing steam service,” said Bill Tracy, Senior Vice President of Operations for Citizens Gas & Coke Utility.

In addition to the rate request, Citizens Thermal is proposing changing the frequency of fuel cost adjustment filings from annually to quarterly. Citizens Thermal passes on to customers the cost of fuels used to generate steam on a dollar-for-dollar basis with no profit added. “Quarterly fuel cost adjustments are necessary to be more responsive to the highly volatile fuel prices we have seen in recent years. Changing the fuel adjustments to quarterly will provide a more market-responsive fuel cost rate, thus sending more appropriate price signals to customers as they plan their energy budgets,” said Tracy.

The proposed rate adjustment and change in fuel cost adjustment frequency are not expected to take effect for several months, pending review and approval of the petition by the IURC.

“Citizens Thermal Energy remains committed to doing all it can to hold down operating costs and make wise fuel purchasing decisions as it provides efficient steam service across the growing Downtown Indianapolis area. We also will continue working with customers to help them find ways to reduce their energy use,” Tracy said.

About Citizens Gas
Citizens Gas & Coke Utility is a Public Charitable Trust providing efficient and reliable energy services to more than 266,000 customers in and around Marion County. The Public Charitable Trust means the utility is managed only for the benefit of customers and the community.

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