Citizens’ CEO grilled on pay in rate-increase hearing
State utility regulators kicked off a week-long hearing Monday on a proposed water rate increase for Indianapolis residents by putting the CEO of Citizens Energy Group on the hot seat.
CEO Carey Lykins—under scrutiny for a significant boost in compensation last year—was the first witness called Monday morning by the Indiana Utility Regulatory Commission.
Lykins tried to make a case for a 14.7-percent increase in water rates for 300,000 Citizens customers in Marion and surrounding counties. He also had to explain his nearly $3 million in compensation last fiscal year, as well as the pay and bonuses other top executives received.
Citizens filed a request with the IURC in February to increase its annual operating revenue from water rates 14.7 percent, or $25.3 million. The hike would raise the average residential customer’s water bill from $31 to $34 per month.
Lykins told commissioners the utility needs to boost its revenue because it previously has relied too heavily on debt to pay for capital projects.
“It’s not a healthy or sustainable system,” he said.
Recent pay bumps for Citizens’ top brass have drawn additional scrutiny of the utility’s need to increase costs for consumers.
Last December, IBJ reported that Lykins earned $2.84 million in salary, bonus and incentive pay for the year ended September 2012—compared to $1.5 million in 2011.
IURC Chairman Jim Atterholt pressed the issue Monday after Lykins said his and his executives’ pay was in line with market rates based on data from consultating firm Mercer.
Atterholt noted that the Mercer study made comparisons to much larger energy companies. Comparing Citizens, which has 1,200 employees, to those firms would be akin to 1,700-employee ExactTarget paying its leaders like 430,000-employee IBM does, he said.
Lykins criticized Indianapolis media for how it has reported on his pay.
“It seems to me that there have been some sensational sound bites, let me say, around my compensation and others,” he said.
The IURC’s evidentiary hearing on the rate increase is scheduled to run through Friday.