Whitestown suing wastewater utility for $2.5 million

A Boone County community is claiming the wastewater division of Citizens Energy Group owes it more than $2.5 million.

In a lawsuit recently filed in Marion Superior Court, Whitestown is suing CWA Authority Inc. for breach of contract and is seeking a refund for connection fees.

Whitestown said CWA is attempting to end an existing contract that allowed the town to pay $2.5 million in connection fees over a 15-year period in exchange for a permanent connection to CWA’s system. Instead, CWA wants to impose a new capacity surcharge under a new contract, the town says in the suit.

“In short, having pocketed Whitestown’s payments, CWA now wishes to act as if the contract never existed,” the complaint states.

The agreement dates to 1997, when the city of Indianapolis and the former Boone County Utilities LLC reached a contract for sewage and wastewater treatment and disposal services.

In 2004, Whitestown purchased Boone County Utilities and obtained the rights of that contract. And, in 2010, CWA took over the wastewater contract for the city of Indianapolis when Citizens acquired the city’s water and sewer utilities.

Whitestown says Boone County Utilities and the town, following the 2004 acquisition, paid $2,538,000 in connection fees from 1997 to 2011. The fee allowed Boone County Utilities, and later Whitestown, to frontload the cost of the capacity fees over the 15-year period in exchange for the right to permanently send wastewater to CWA’s system without additional capacity charges.

Whitestown is still required to pay CWA monthly treatment fees and transportation fees for every 1,000 gallons of wastewater, but the town completed construction of its own wastewater plant in November 2015 and has not had to pay the monthly fees since then.

In April, CWA announced at an Indiana Utility Regulatory Commission meeting that it planned to terminate the agreement and impose new capacity charges of $3,000 per month, according to the complaint.

“CWA advised Whitestown at that meeting that it no longer intended to honor the terms of the agreement or recognize that Whitestown is entitled to future capacity without charge based on past payments,” the complaint states.

Whitestown says it tried to resolve the dispute with CWA before taking legal action, but CWA refused to discuss the issue.

The town is requesting the court require CWA to follow the existing contract or hold it liable for breach of contract and award the town the $2.5 million refund in fees.

Citizens Energy Group declined to comment on the litigation. Whitestown officials say they hope to resolve the issue in or out of court.

“Once we learned of CWA’s proposal, we had to act quickly to protect our interests," said Whitestown Town Manager Dax Norton in an email to IBJ. "Our attorneys have since been in discussions with their counterparts at CWA, and we are hopeful that the parties will be able to reach a mutually agreeable resolution."