Citizens Energy reports $81M loss, lower executive pay

Citizens Energy Group lost $81.3 million in fiscal 2013, and its CEO’s pay dropped by $1 million from the previous year, when his bonus-fueled compensation provoked questions from regulators.
 
The loss far exceeded the $11.8 million in red ink Citizens recorded in fiscal 2012.

Operating revenue rose 15 percent, to $711.5 million, in fiscal 2013, which ended Sept. 30.
 
Meanwhile, CEO Carey Lykins earned about $1.9 million in salary and bonuses during the year, according to documents the company provided Thursday.
 
Lykins' pay dropped from $2.9 million the previous year, when he received a biannual incentive boost to his compensation. Last year, Citizens, a not-for-profit charitable trust, also bought Indianapolis’ water and sewage utilities, boosting the size of the organization and Lykins’ pay. He was paid $1.55 million in fiscal 2011.
 
Collectively, Lykins and the six senior vice presidents saw their compensation drop 26.5 percent in 2013, to a total of $5.9 million.
 
Citizens’ compensation for its upper brass brought the utility scrutiny from the Indiana Utility Regulatory Commission earlier this year as the state agency reviewed applications for water and wastewater rate hikes.
 
Those hikes, if approved, would cauterize losses—$8.7 million in the water division and $28.5 million in wastewater—that Citizens had in fiscal 2013 because of aging facilities, said Citizens spokesman Dan Considine.
 
The rates, set by the city-county council before the acquisition in 2011, aren’t high enough to keep up with the declining facilities and depreciation, he said.
 
Water rates would increase 13.3 percent, and wastewater rates would jump 21.6 percent initially and 5.6 percent later on, based on figures filed with the Indiana Utility Regulatory Commission.
 
Almost half of Citizens’ $81.3 million loss was attributable to ProLiance Energy, a natural gas marketer it owned a 39-percent stake in until last June.
 
Citizens and Vectren Corp., which owned the other 61 percent, sold the money-losing ProLiance to Dallas-based Energy Transfer Partners.
 
Citizens reported $39 million in losses associated with ProLiance.
 
Fueling the losses was the $11.5 million Citizens paid for for the demolition and remediation of a coke plant property it closed in 2007.