Joint Board of Directors Meeting - Citizens Energy Group & CWA - Dec 10, 2025
Joint Board of Directors Meeting - Citizens Energy Group & CWA - Dec 10, 2025
The joint meeting of the Board of Directors for Citizens Energy Group and the CWA Authority convened on December 10, 2025, to review fiscal 2025 financial performance, approve budget adjustments, consider strategic amendments to wastewater ordinances, and address corporate governance matters including compensation plans and board appointments.
Consent Calendar
- Minutes: The minutes of the August 20, 2025, joint meeting were unconditionally approved by the board, including virtual members Nicole and JA.
- Proxy Appointment: The appointment of Maria Contan’s proxy for the January 12, 2026, annual meeting of Citizens Resources was approved.
Public Comments & Testimony
- Industrial Pretreatment Ordinance: During the public hearing regarding proposed amendments to CWA Resolution 2-211, no members of the public appeared to offer comments, testimony, or express positions for or against the proposed amendments.
Discussion Items
- Financial Performance (Audit & Risk Committee): Sabina Carter presented fiscal 2025 financials showing a net income of approximately $258 million, roughly $4 million lower than the prior year due to higher cost of goods sold despite revenue increases. An internal error overstating third-quarter net income by $3.6 million (related to depreciation) was discovered and corrected in the fourth quarter. Independent auditors from Deloitte reported no disagreements and expect to issue a clean opinion. The committee also discussed AI governance oversight and recommended a 2.9% fee increase for the 2026 audit engagement.
- Whistleblower Program: General Counsel Joe Perkins reported 100% participation in the ethical conduct survey (637 employees). One code of conduct violation was reported, resulting in termination. No other significant violations were noted, though the code of conduct is currently being refreshed.
- Compensation & Finance: The committee approved short-term incentive plan payments for fiscal 2025, with an average payout of 121% (driven by safety). Restoration policy payments exceeding IRS limits were recommended for four officers. Additionally, a recommendation was made to retain Willis Towers Watson as the external compensation consultant for 2026, with the committee expressing full satisfaction with the relationship and service.
- Wastewater Resources: The committee highlighted that the "Big Dig Indy" project is substantially complete, having reduced CSO volumes by 7.5 billion gallons. Capital spending for 2026 is projected to drop significantly as major construction concludes, with remaining funds focused on post-consent decree monitoring. The committee also recommended amendments to the industrial pretreatment ordinance to clarify obligations and modernize fee structures.
- Resources Committee: Financial reports indicated stable gas rates, with residential customers projected to pay approximately $452 for heating this winter (only a $10 increase from the prior year). Prepaid gas transactions have locked in benefits for return customers, and a renewed 10-year franchise agreement with the City of Indianapolis for chilled water includes a new $2 million annual fee cap, projected to save $500,000 annually. The committee noted that chilled water net earnings are better than expected, while steam's EVADOT is currently insufficient to cover capital needs.
- Board Education: Board members Jeff Goody and Eric Scryans attended the American Gas Association conference, reporting that demand growth in the energy sector is creating a need for 300 million employees (interpreted from "30 million" in a typo context or high projection, context suggests high demand) and that natural gas is growing at the fastest pace ever, with US LNG exports set to more than double by 2028.
- CFO Report: Frank Jackson provided updates on the fiscal 2026 financial projections, noting water revenue is projected $5 million below budget due to updated TC tracker approvals. The pension plan remains overfunded at roughly 130% but faces an open-plant liability increase. Supply chain risks were discussed, with estimated tariff impacts between $3-4 million in 2025 and a potential $5-7 million in 2026 if tariffs are fully implemented.
- CEO Report: The President and CEO delivered the "Promise of the Trust" report, highlighting the completion of the Big Dig Indy, community engagement via Resource Day, and the sponsorship of employee nominations for the Rose Awards. The office reaffirmed a commitment to protecting customer interests in data center developments and maintaining low rates.
- Customer Operations: Melissa Lawson reported a decline in customer satisfaction scores in late 2025, attributed to tariff uncertainty and high inflation. A primary driver of dissatisfaction is the inability to retain full-time meter readers, leading to increased estimations and occasional surprise high bills. The company is transitioning to a full-time reading model and upgrading customer information systems.
Key Outcomes
- Fuel Cost Adjustments: Approved Fuel Cost Adjustments 79 and 80.
- Gas Cost Adjustment: Approved Gas Cost Adjustment 168.
- Universal Service Fund: Approved the Universal Service Fund Writier resolution.
- Audit Approval: The Board approved the Fiscal 2025 financial statements and the Deloitte Fiscal 2026 engagement letter.
- Compensation Approval: Authorized 2025 incentive and deferred compensation distributions for executive officers and retained the executive compensation consultant for 2026.
- Wastewater Ordinance: Adopted amendments to CWA Resolution 2-211 regarding the industrial pretreatment ordinance (closed public hearing with no comments received).
- Prepaid Gas Transaction: Approved the execution of a new prepaid gas transaction for 2026 and 2027.
- Appointments: Board of Directors appointments were approved for the Warm Heart Home Foundation, Citizens Collaboration on Neighborhoods, and the Yvonne Perkins Legacy Fund for 2026, as well as the Service Advisory Board.
- Retirement Recognition: Passed a resolution formally recognizing board member Maura Carlstead for her 14 years of dedicated service to Citizens Energy Group and her leadership on multiple committees, including chairing the Wastewater Resources Executive Committee.
(Note: The transcript mentions "Moore Carlstead" in the resolution text but refers to "Mora Crossdown" in the chair's spoken introduction; the resolution title in the summary uses the name "Maura Carlstead" as it appears in the formal resolution text provided.)
Meeting Transcript
Good morning, everyone. Call to order the joint meeting of the board of directors for citizens energy group and CWA Authority. I'd like to remind everyone since we have some folks that will be participating electronically about our electronic attendance policy and participation. So if you are attending electronically, the board member cannot participate in a vote to either adopt the budget, enact or increase a fee or penalty, enact a reduction in personnel, exercise eminent domain or raise a tax and a board initiate a referendum. So what I will do throughout the meeting is I will call your question here in the room first, and then I'll vote virtually to get your uh your votes when appropriate. So the next item on the agenda is to request for board members to recuse themselves from any action items uh if they have a conflict of interest. Hearing none, we'll move to the approval of minutes of the joint meeting of the board of directors, citizens energy group and CWA authority, which was held on August the 20th, 2025. Can I have a motion to approve? Second, second. All those well, before I go there, are the uh virtually Nicole approved and JA. All those in favor signify by saying aye. Aye. Thank you. I'll get this right. Let's see here. Next item on the agenda is certification of topics that were discussed at the executive session and the board of directors of citizens energy group and CWA Authority, which was held on August the 20th of 2025. For the purpose of the minutes, I will certify that the subject discussed during the executive session of the board of directors of Citizens Energy Group and CWA Authority Inc. held on August 20th, 2025 was limited solely to the item specified in the public notice of that session, and the notice will be included within the minutes of this meeting. Next item on the agenda is approval of appointment of Maria Contan's proxy to both the stock of citizens byproducts and coal company doing business as citizens resources at the January 12th 2026 annual meeting of the sole cycle for citizens resources. The proxy memo can be found on page 38 of the board board. So second. Okay. All those in well, go back virtually, Nicole. Agreed. JA? All those in favor in the room signify by saying aye. Aye. Same sign. Thank you very much. The next item on the agenda, we've got a series of votes here. It is the uh approval of the fuel cost adjustment 79. The resolution describing this adjustment can be found on page 39 of the board portal. Do I have a motion to approve? So moved. Second. Second. Virtually, Nicole, are you in favor? Yes. Is this the meeting that I this is exactly right? You cannot vote on this. So I said I'm gonna figure this out. So in the room, all those in favor signify by saying aye. Aye. Opposed, things on. Thank you. Okay, so the next item on the agenda is approval of the gas cost adjustment. 168 resolution describing the test cost adjustment can be found on page 40 of the board oral. Do I have a motion to approve? So move. Second.
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