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Fitch Ratings - New York - 13 Nov 2024: Fitch Ratings has affirmed the rating on the following Indianapolis, IN water system revenue bonds issued on behalf of the city's Board of Directors for Utilities of its Department of Public Utilities, doing business as Citizens Energy Group (Citizens or the system) at 'AA-':

• Approximately $56 million outstanding first-lien water revenue bonds issued by the Indianapolis Local Public Improvement Bond Bank (ILPIBB) series 2007B;
• Approximately $57 million outstanding first-lien water revenue bonds issued by the Indiana Finance Authority (IFA) series 2014A and 2016A;
• Approximately $479 million outstanding first-lien revenue bonds issued by the city series 2016B and series 2018A.

The Rating Outlook is Stable.

The water utility is kicking off a major construction effort in the Martindale Brightwood neighborhood.

INDIANAPOLIS—Citizens Energy Group today joined leaders from the Indiana Department of Environmental Management, the City of Indianapolis, and the Martindale Brightwood neighborhood to showcase the impact of construction crews replacing customer-owned lead service lines. Citizens recently began construction in a segment of the Martindale Brightwood neighborhood, the largest area thus far within the program Citizens is implementing.

Photos from the event are included at the bottom of this release, including a photo of ongoing construction at a site along N Parker Avenue. More information on the lead service line replacement program is available here. 

“Martindale Brightwood is one of many neighborhoods that will soon see construction crews proactively replacing lead service lines block by block,” said Mark Jacob, Vice President of Capital Programs & Engineering at Citizens. “It goes without saying that full replacement of our customers’ lead service lines at no additional cost to them is the surest way to help our neighbors reduce their exposure to lead.”

While water in the utility’s distribution system does not contain lead, Citizens is implementing a program, first approved in 2022, to replace all customer-owned water service lines made of lead that connect homes and buildings to public water mains. To date, the program’s replacements have largely been completed in coordination with other utility maintenance projects or when utility line relocations were required by roadway improvement projects. Martindale Brightwood is Citizens’ largest proactive focus area thus far in which crews are mobilized for the sole purpose of replacing lead service lines.

“We are encouraged to see the steps being taken in this neighborhood—and many others in the future—to mitigate lead exposure in our communities,” said Brian Rockensuess, Commissioner of the Indiana Department of Environmental Management (IDEM). “IDEM continues to be a strong supporter of programs that get the lead out, and we encourage education at the community level explaining how Hoosiers can limit lead exposure in soil, dust, air, or water.”

Many homes built in Indianapolis before 1950 – including a majority of those in the Martindale Brightwood area – still include service lines made of lead, a common building material used through the middle of the 20th century.

“Martindale Brightwood is a neighborhood with a long history, and the age of many of our homes means that neighbors are likely to own a lead service line,” said Elizabeth Gore, Chair of the Martindale Brightwood Environmental Justice Collaborative. “But we have deep roots here, and our neighborhood will continue to organize ourselves in support of programs like this one that are critical for the community’s health.”

Citizens estimates that more than 75,000 customers may own or rent a home with a service line made of either lead or a galvanized metal requiring replacement. The program Citizens is implementing has been estimated to cost more than $500 million, though the utility has received more than $20 million to date in outside financing for the program; to accelerate the pace of replacements, Citizens will continue to apply for funding from foundations, endowments, and government programs that align with the project’s community health goals of limiting lead exposure.

Proactive focus areas are prioritized based on several factors, including the number of known or suspected lead service lines in an area, the potential for health risks, neighborhood economic impacts, and inter-agency coordination ahead of other planned infrastructure work in the area, which helps lessen construction impacts and overall project costs.

About the Lead Service Line Replacement Program, implemented by Citizens Energy Group: 

Tens of thousands of Citizens customers own homes or buildings that include a customer-owned water service line made of lead or containing lead (particularly homes built before 1950). Approved in 2022, the multi-year lead service line replacement program is identifying customer-owned service lines that contain lead and replacing them at no additional cost to the customer. 
 
Citizens regularly monitors tap water throughout the public system and at points within customers’ homes in accordance with U.S. EPA’s Lead and Copper Rule. Drinking water remains fully compliant with all federal and state water quality requirements.  Still, the surest method to avoid lead exposure in drinking water is to replace customer-owned service lines made of lead. Replacements will be accomplished in several ways: in coordination with infrastructure improvement projects; in proactive focus neighborhoods; or as initiated by customers for the upgrade or maintenance of their own service line. 

Learn more about the lead service line replacement program Citizens is implementing by clicking here. 

[Image above: City-County Councilor Ron Gibson (District 8) addresses a crowd of photographers and neighbors from Martindale Brightwood regarding the ongoing work to replace lead service lines in the neighborhood.]

[Image above: Mrs. Elizabeth Gore addresses a crowd of photographers and neighbors from Martindale Brightwood regarding the ongoing work to replace lead service lines in the neighborhood.]

[Image above: A guide line pulls a blue plastic water service line into place, the replacement for a lead service line which has just been removed at a residence along N Parker Avenue. The service line connects the public water main to the home's plumbing.]

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About Citizens Energy Group
Citizens Energy Group provides safe and reliable utility services to about 900,000 people in the Indianapolis area. Citizens operates its utilities for the benefit of customers and the community.

Media Contact Information
Ben Easley
Phone: 317-519-1515
Email: media@citizensenergygroup.com

INDIANAPOLIS – Citizens Energy Group (“Citizens”) today broke ground on a multi-year project to upgrade four miles of legacy natural gas pipeline at key locations on the east side of Indianapolis, made possible by a $7.5 million federal grant. Citizens leadership, U.S. Congressman André Carson, local Indianapolis leaders, and Deputy Administrator Tristan Brown of the Pipeline and Hazardous Materials Safety Administration (PHMSA) provided remarks commending the impact that projects like this one can have on a community.

Photos of the groundbreaking and a new construction site near Millersville Road are included below.

“Citizens continues to work toward improving our infrastructure, securing outside funding where we can for upgrades across our various utility systems,” said Jeffrey Harrison, President & CEO of Citizens Energy Group. “We’re building upon decades of pipeline safety improvements within our nearly 4,000-mile system by making this four-mile portion even more resistant to corrosion via new contemporary plastic pipeline.”

Construction begins in 2024 on a portion of natural gas main in the Avondale Meadows neighborhood, generally along the Rural Street corridor between Fall Creek and 30th Street. The next two years will see additional construction along this same corridor south into the Martindale Brightwood neighborhood and at the site of a legacy natural gas main in the Far Eastside neighborhood installed more than 70 years ago. When the project is complete, the entirety of Citizens' 4,000-mile system of natural gas mains will be composed of this safer style of plastic pipeline.

“The Bipartisan Infrastructure Law continues to deliver," said Congressman André Carson. "Indiana alone has already received $7.9 billion for necessary improvement to our roads, public transit, and airports. Now, we’re ensuring the safety of our neighborhoods by upgrading natural gas main lines – and it’s all thanks to the Bipartisan Infrastructure Law, which I proudly championed. Together, we can improve public health and safety and reduce methane emissions that could otherwise be a threat to our community for years to come.”

Citizens was one of 37 recipients for this round of infrastructure funding via a Natural Gas Distribution Infrastructure Safety and Modernization grant established by the Bipartisan Infrastructure Law and administered by the Pipeline and Hazardous Materials Safety Administration (“PHMSA”, an agency of the U.S. Department of Transportation). Within the Bipartisan Infrastructure Law, this grant program will provide nearly $1 billion of funding exclusively for publicly- and community-owned gas utilities (including Indianapolis as a recipient).

“PHMSA is proud to join Citizens Energy Group and Congressman Carson to break ground on this expedited effort to replace 4 miles of aged, leak-prone, cast iron pipe across Indianapolis,” said PHMSA Deputy Administrator Tristan Brown. “Funding for this project was made possible by the Biden-Harris Administration’s Bipartisan Infrastructure Law, supporting this project to increase pipeline safety, reduce pollution, and save people money on their energy bills.”

Key goals of the Natural Gas Distribution Infrastructure Safety and Modernization grant include enhancing pipeline safety and preventing pipeline leaks, which can have impacts on the improvement of public safety and public health outcomes for neighborhoods in addition to reducing methane emissions from natural gas distribution pipes.

“In Martindale Brightwood, our neighborhood is guided by resident-influenced Quality of Life goals, several of which speak to the safety of our infrastructure,” said Barato Britt, President & CEO of Edna Martin Christian Center. “This project represents an investment in the long-term health and safety of our residents, and I want our neighbors to see and hear about the work that will be done to sustain our vibrant community.”

Citizens’ natural gas system has been recognized as one of the safest, best maintained urban gas utilities in the U.S., a comparison confirmed by an ongoing leak detection study by the Environmental Defense Fund. For more information on the construction progress and phasing of this ongoing effort, please visit www.citizensnergygroup.com/castironreplacement.  

About the Pipeline and Hazardous Materials Safety Administration 
The Pipeline and Hazardous Materials Safety Administration (PHMSA) develops and enforces regulations for the safe, reliable, and environmentally sound operation of the nation's 3.4-million-mile pipeline transportation system and the nearly 1.2 million daily shipments of hazardous materials by land, sea, and air. In 2023, PHMSA announced $196 million in grant funds would be awarded to the first round of recipients in a new Natural Gas Distribution Infrastructure Safety and Modernization (NGDISM) grant program, established by the Bipartisan Infrastructure Law. 

About Citizens Energy Group
Citizens Energy Group provides safe and reliable utility services to about 900,000 people in the Indianapolis area. Citizens operates its utilities for the benefit of customers and the community.

Media Contact Information
Ben Easley
Phone: 317-519-1515
Email: media@citizensenergygroup.com