Citizens Energy misallocated funds, must repay $500,000, state says
Citizens Energy must set aside more than $500,000 over the next two years to help people pay for heat after state regulators found the company misallocated funds.
The Indiana Utility Regulatory Commission said Wednesday the utility had violated a previous order when it misallocated money intended for a program that gives needy customers a monthly discount on gas charges during the heating season.
The IURC ordered Citizens to contribute $522,432 to the assistance program, known as the Universal Service Program.
The company said mistaken application of the money to water and wastewater bills was the result of an error in its computerized billing system. It said changes have been made to ensure that it doesn’t happen again.
Regulators also found that Citizens misallocated more than $2 million in Low Income Home Energy Assistance Program funds. But the state does not have jurisdiction over the federally funded program, and took no action on that.
“We are gratified that more than a half-million dollars will be returned for the use of Citizens Energy Group’s ratepayers in light of this week’s order,” said David Stippler, the state’s Utility Consumer Counselor, in a statement.
State regulators launched the investigation last year after receiving multiple complaints of poor customer service. In some months, one out of four callers to the company hung up before receiving service because of long wait times.
The IURC said Wednesday that utility had worked to improve its customer service and billing practices, but still wants quarter compliance filings to keep help it keep tabs.
The company said it was pleased with the outcome.
“Over the past two very cold months when call volumes have been high, call wait times have been less than two minutes,” the company said in a statement. “As always, Citizens will continue to be transparent with its customers, the IURC and the general public.
The state was also investigating Citizens’ management practices and compensation.
Under the new order, the utility is required to provide the state its completed executive compensation analysis within 10 days. The company came under fire in recent years for paying its top executives multimillion-dollar salaries. CEO Carey Lykins earned $2.9 million in 2012, nearly double what he made the previous year and more than triple what the leaders of other large municipal gas utilties earned.
Since then, the company has hired several consultants to examine the company’s executive compensation. The company also cut Lykins’ pay twice, first to $1.9 million, then $1.3 million.
Lykins will retire this summer and be succeeded by Jeff Harrison, who will get a base salary of $555,556, with a short-term incentive to make an additional 35 percent, the company announced last fall. The wages of 17 other executives will be cut by 6 to 12 percent.
Call Star reporter John Russell at (317) 444-6283 and follow him on Twitter: @johnrussell99.