User:Indyguy/sandbox/Citizens Energy Group

Citizens Energy Group is a public trust that supplies natural gas, water, wastewater treatment, and district heating and cooling to businesses and residences in Indianapolis, Indiana, and surrounding communities. Formerly known as Citizens Gas & Coke Utility, the company changed its name in 2011 following the acquisition of the water and sewer systems from the city of Indianapolis.

History
The various services supplied by Citizens began as independent companies or government agencies. The history of each is discussed separately.

Indianapolis Gas Light & Coke Company
Two early attempts to build a gas works and distribution system in Indianapolis did not succeed. In September 1847, the city had given F. G. March a 20-year franchise as long as he laid 5000 ft of pipeline by June 1850, but it soon became apparent that he would be unable to do so. Then, in December 1850, William Sheets and J. D. Defrees requested that the city grant them a 30-year exclusive franchise, but the council, fearing a monopoly would develop, countered with only a 10-year one, which apparently was not acceptable to Sheets and Defrees.

On February 12, 1851, the Indiana General Assembly approved a 20-year charter to John J. Lockwood, a Philadelphia businessman who had developed gas works in Columbus and Dayton, Ohio, for the Indianapolis Gas Light & Coke Company, and on May 3, the Indianapolis City Council granted an exclusive 15-year franchise to construct a plant to produce gas, lay distribution pipes beneath streets, and sell gas for street and residential lighting at a rate not exceeding that in Cincinnati. Construction of the gas plant on the east side of Pennsylvania Street immediately south of Pogue's Run began that August and mains were laid from there to Washington Street. The plant used retort ovens to heat coal and produce not only coal gas, but also coke, tar, and chemical by-products that could be sold. However, the voters defeated a proposal to increase taxes to install gas lamps on downtown streets, causing financial difficulties for the company, although in December 1853 the city finally did agreed to the installation. By April 1852, the company had installed 7700 ft of pipe and had 116 customers. For the first several years there were frequent operational problems, the worst of which necessitated the rebuilding of the ovens, that caused outages of up to several weeks. However, by 1860 about 8.5 mi of street lighting were in operation and a new gas storage holder, with a capacity of 75000 cuft, had been constructed. In 1862, another gas holder was built on Delaware Street for $126,000, with a capacity of 300000 cuft.

In 1867, Indianapolis Gas Light agreed to a new 15-year franchise with the city that cut rates to $3 per 1000 cuft of gas. The company continued to add capacity, operating 100 retort ovens that produced gas and coke in 1873. By 1875 it was producing 1.4 e6cuft of gas annually. The city council attempted unsuccessfully to reduce the rates several times during the period.

In 1876, a new competitor, Citizens Gas Light & Coke Company (not to be confused with the later Citizens Gas Company), pledged to charge only $2 per 1,000 cubic feet and received a franchise from the city. With a capitalization of $500,000, $300,000 of which was from outsiders, Citizens started construction of its plant that summer on 2 acre at the intersection of what is now 9th Street and the Central Canal, but construction delays caused it to change its production method from one using retort ovens to produce gas and coke to the new Lowe water gas process that used coal, steam, and oil to generate hydrogen gas.That process, however, yields lower quantities of tar and chemical by-products, and does not produce any coke. On November 15, 1876, testing of the mains with high pressure hydrogen gas resulted in an explosion that destroyed the gas holder and nearby plant structures and blew up the mains as far as three blocks away. Nearby businesses and residences also incurred shattered windows and other damage. Although Citizens promised to repair the damage quickly, it soon became apparent that its investors were not willing to do so. Three of the board members of Indianapolis Gas Light purchased a controlling interest in their competitor for $63,731 and transferred that interest to their company. The charter granted to Citizens by the General Assembly prevented an outright merger, so Citizens was maintained as a separate legal entity that was managed by Indianapolis Gas Light. In 1881, the Electric Lighting, Gas Heating and Illuminating Company was incorporated and purchased the Citizens assets.

Gas boom and Consumers Gas Trust
Although Indianapolis Gas Light had taken over its competitor, it was only a few years until an even bigger challenge arrived. In 1886, a successful natural gas well was drilled in Kokomo, Indiana, followed by others in counties north and east of Indianapolis as the Indiana gas boom began. The next year, a well was drilled in the town of Broad Ripple just a few miles north of the city. City leaders became even more convinced that Indianapolis Gas Light's rates were too high, and looked for ways to bring the supply of cheap natural gas into the city. In March 1887, the city council decided to give a franchise to any gas company that would, among other factors, charge a rate of no more than 8 cents per 1,000 cubic feet or a flat monthly rate of $0.75 for cooking purpose and $1.00 for a heating stove. That same year, shareholders of Indianapolis Gas Light created a new entity named Indianapolis Natural Gas Company, which in 1890 took over Indianapolis Gas Light's assets. Standard Oil was also interested in the Indianapolis market and bought up a large number of gas leases, threatening not to extend its pipelines into Marion County unless the council increased the permissible rates. Some civic leaders proposed that any franchise have provision for the city to buy out the owners at a future point, while others advocated for a municipally-owned gas company; however, the city's level of indebtedness already exceeded its legal maximum, so those options were discarded.

The members of the Indianapolis Board of Trade proposed that a trust be set up, with captive stock. Under this structure, stock would be sold to individuals, but voting control would be held by a self-perpetuating board of trustees required to act for the benefit of the consumers. On October 31, 1887, the trustees for the new Consumers Gas Trust were selected: General Thomas A. Morris, former governor Albert G. Porter, John M. Butler, John W. Murphy, and Henry Schnull. A campaign to raise $500,000 in stock subscriptions from the public began immediately, with daily reports appearing in the city's newspapers, especially in the Indianapolis News, the trust's biggest advocate. By November 20 the entire amount had been raised, and Consumers accepted the city's franchise on November 23. Moreover, several gas well owners had agreed to sell gas to the trust, thereby demonstrating that Standard Oil could not lock the city out of a gas supply. In response, Indianapolis Natural Gas said it would be willing to accept the rate proposed by the city as long as certain other changes were made, and would be doubling its own capitalization to $1 million. Meanwhile, another new company, Broad Ripple Natural Gas Company, had also accepted the city's terms for a franchise and was ready to lay 8 mi of pipeline to reach the city. In response, Indianapolis Natural Gas also accepted the franchise terms without modification.

All three companies had obtained gas well leases in Hamilton County and were laying high-pressure pipelines from the wellheads to the city. Broad Ripple Natural Gas reached the city limits first, at what is now 22nd Street at Meridian Street, on December 3, 1887. Consumers performed a successful high-pressure test of its 20 mi of mains on May 31, 1888. It intended to provide service to all parts of the city by September 1888, but started service in the areas near the mains as soon as possible to start receiving revenue. By the time of the pressure test, Consumers had spent over $1 million, so it sold an additional $240,000 in stock to complete the seasonal work, and, after high-pressure lines to all the manufacturing districts had been laid, another $250,000 to lay low-pressure lines to private users. By April 1889, Consumers had monthly revenue of $25,000 from 7,136 customers. Later that year, Broad Ripple Natural Gas went into receivership and Consumers bought its assets, including 39 mi of pipeline, ten wells, and 953 customer accounts, for $65,072. Consumers' 1890 annual report stated that it had 10,678 customers, more than 225 mi of pipeline, and 94 wells producing 350 e6cuft of gas daily.

In 1889, the Indiana General Assembly revised the state statute regarding public trusts to conform to the intent of Consumers' charter, making it clear that a trust's governing board had the right to vote all capital stock if the individual shareholders had so authorized it at the time of purchase, thereby providing a defense against hostile takeovers. It also specified that a trust could continue in business in perpetuity as long as the purpose for its existence remained valid.

In 1890, Indianapolis Gas Light and Indianapolis Natural Gas were merged into a new company named the Indianapolis Gas Company. The new company also acquired the Electric Lighting, Gas Heating and Illuminating Company, the owner of the assets of the defunct Citizens Gas Light & Coke Company. Indianapolis Gas itself was primarily owned by New York investors associated with the Equitable Gas Light Company.

Gas bust
Already in 1889 several of Consumers' wells had gone dry and eight others had flooded with ground water due to loss of gas pressure. The company was soon having to drill a new well every 20 days as replacements. Customers, most of whom were on the flat rate plan, assumed that the gas supply was endless and therefore did not try to conserve. For example, they heated their homes higher than they had previously and, when it got too hot, opened the windows rather than turning down the heat. By 1893, over half the wells drilled in the state had been abandoned. In 1894, with wellhead pressure having dropped from 320 lb/sqin to 249 lb/sqin, Consumers petitioned the city council to eliminate the flat rate and require a metered rate per 1,000 cubic feet of $0.10 for manufacturers and $0.20 for domestic users. However, the council rejected the proposal due to voter opposition.

By November 1902, wellhead pressure for Consumers' wells had dropped to 63 lb/sqin, forcing the company to install pumps on its lines. The company once again asked the city council to enact a metered rate, this time for $0.25 per 1,000 cubic feet, warning that if the request was not granted, it would not be able to continue supplying gas to the city.

Indianapolis Gas faced not only the same natural gas supply problems, but was also running a manufactured gas system whose coal gas was more expensive than natural gas and whose coke was not in demand because many industries had switched to natural gas. By the fall of 1902, the pressure at its wells had dropped from an initial 320 lb/sqin to only 5 lb/sqin. By spring of 1903, it had lost two-thirds of its natural gas customers. The company offered to switch its customers to the manufactured gas, but only for cooking, not heating. The natural gas system was finally shut off on June 8, 1903. Moreover, that summer the company's contract with the city to operate gas street lights expired and was not renewed.

Consumers was able to hobble along for a while longer. It too had lost customers, and in October 1903 began requiring them to pay in advance so that the company would have enough cashflow to operate. By the end of March 1904, system pressures were down to as little as 1 oz/sqin. With operating deficits having risen to $10,000 per month, Consumers suspended service on April 1, 1904.

Given Consumers' declining financial outlook, shareholders had begun selling their stock at 25% of face value as early as the spring of 1902, but by September 1903 the stock was selling at up to 15 times face value as Eureka Investment Company attempted to gain control in order to liquidate the trust and sell the assets to the Indianapolis Gas Company, creating a monopoly that could control prices. Eventually Eureka obtained control of almost a majority of the Consumers stock. John P. Frenzel, who was a director of Consumers, was one of the people behind Eureka, and a majority of Consumers' board of directors were in favor of the liquidation. However, apparently Consumers' board of trustees intended to remain in business, having appointed Hugh H. Hanna as president in February 1904. The year before, Hanna had proposed that Consumers start producing manufactured gas as a replacement for the natural gas.

Four of the directors were replaced in November 1903 with ones favoring the conversion of Consumers to manufactured gas rather than liquidation of the company. A Gas Consumers League was organized that same month in support of the trust and had 3,000 members within a month. However, Brian C. Quinby, a shareholder from Plymouth, Massachusetts, filed suit in the federal district court in Indianapolis to prevent Consumers from switching to manufactured gas on the grounds that its charter did not include the right to manufacture gas, only to distribute it. The court ruled in Quinby's favor and the ruling was upheld by a two to one vote of the Seventh Circuit Court of Appeals. In view of the pending liquidation of Consumers, the Indianapolis city council considered setting a rate of $0.50 per 1,000 cubic feet of manufactured gas, while Indianapolis Gas, the apparent beneficiary of the dispute, countered that a rate of $0.90 was necessary.

Citizens Gas Company
Alfred Potts, one of the original leaders in the effort to establish Consumers, was reminded by the city engineer that a provision of the 1887 franchise agreement stipulated that if the trust failed, the city had the right to buy the assets. The city, under Mayor John W. Holtzman, announced on March 17, 1905, that it intended to exercise the option. Quinby again filed suit in the federal district court to stop the city, and again won. Since a new mayor, Charles A. Bookwalter, would take office in January 1906 before the appeal was heard, and Bookwalter did not support the trust's continuation, Potts took immediate action. He and other supporters secured a franchise from the city council to supply manufactured gas for $0.60 per 1,000 cubic feet. He then paid the city $25 for an option on the city's option to buy Consumers' assets. In February 1906, the decision in Quinby's favor was reversed by the appeals court, and Potts exercised his option with the city. Bookwalter's administration twice declined to transfer the assets, so Potts successfully sued the city to force it to honor the option.

On May 23, 1906, Potts and his supporters created Citizens Gas Company with articles of incorporation nearly identical to those of Consumers. One difference was that after 25 years the city would have the right to acquire the trust and either run it as a municipal utility or lease it to another company. On January 26, 1907, Bookwalter announced that the city would sell the assets of Consumers, including 130 mi of mains, to Citizens if, by November 1, Citizens could show it had the means to pay for them. An appraisal later that year set a value of $409,061. Citizens launched a public stock subscription campaign that summer, finishing on October 31 with over $500.000 being raised.

In order to sell gas at the 60-cent rate, Citizens planned to build a coke manufacturing plant on a larger scale than was common at the time. The larger ovens would allow economies of scale and produce higher-quality coke that could be sold to steelmakers. The general manager, J. D. Forrest, estimated that at least 500 ST of coal per day would have to be processed for the venture to be economically feasible. The amount of coke thereby produced would be far more than local customers could use, requiring both regional and national marketing. In hindsight, Indianapolis proved to be the right size and right place for the operation. Its location and transportation links made it possible to deliver coke to manufacturers at a competitive price. A larger city would have had to produce more coke than could be sold to generate a sufficient amount of gas, while a smaller city would not be able to use the amount of gas produced by the minimum scale of coke production required for economic production. In addition, by the time other cities were considering similar operations, Citizens and other coke producers were supplying all the coke needed by industry.

A 22 acre site on Prospect Street on the city's southeast side that was served by both the Belt and the Big Four railroads was purchased as the location of the coke production facility. Citizens faced a major challenge in financing the construction of the coke plant, which would cost about $1.5 million. Most of the money raised so far had gone to purchase the assets of Consumers, and, as a new company, it could not easily borrow money. In order to generate revenue as soon as possible, a water gas plant was one of the first units constructed at the site. It was put into operation on March 31, 1909, and customers eager for the 60-cent gas nearly overwhelmed the company; many of them were switching from the Indianapolis Gas Company. On November 18, 1909, 200 ST of coal was loaded into a battery of 25 coke ovens. In December, Citizens distributed 17 e6cuft of gas and had 5,500 customers. The capacity of the coke ovens allowed the more expensive water gas unit to be used only when extra capacity was needed.

During its first year of operation, Citizens distributed over 82 e6cuft of gas and produced 5741 ST of coke, 88608 gal of tar, and 39375 lb of ammonia. The amount of gas being produced exceeded customer demand, so the excess was flared off rather than decrease the production of coke, for which a backlog of orders existed. A drive to double gas consumption was initiated, and by September 1910, the company had 7,500 customers and the flaring was discontinued. A 3 e6cuft storage facility was built in 1912, quadrupling storage capacity.

Acquisition of Indianapolis Gas Company
Meanwhile, Indianapolis Gas was facing increasing problems. The Indiana General Assembly had passed a law limiting the rate for manufactured gas in Indianapolis to $0.60 per 1,000 cubic feet on all new or renewed franchises. Indianapolis Gas therefore lost its 90-cent rate in 1909 when its franchise expired. Moreover, despite the fact that the company had been manufacturing gas since before the gas boom, much of its capacity was in the more expensive water gas process. It was also burdened with debt from building new coke ovens at its Langsdale Avenue plant near the Michigan Road (now Dr. Martin Luther King Jr. Street) bridge over Fall Creek. The company had purchased the 26 + 1/2 acre Langsdale site and begun construction of the coke ovens in 1902.

An investor began acquiring control of Indianapolis Gas with the intent to lease it to Citizens. Citizens' board of directors agreed to the plan on February 26, 1913, setting off public fears that Citizens would thereby become a monopoly and eventually raise rates. In the past, the controversy would have been settled by either the city council or the courts, but that same year the General Assembly had put such matters under the purview of the newly-established Public Service Commission (PSC). That law allowed a utility to give up its municipal franchise in exchange for being subject to regulation by the commission. The legal protections built into Citizens Gas's charter as a public trust led to negotiations with the PSC whereby Citizens agreed to regulation by the PSC so long as it could keep its city franchise and none of the rights granted by Citizens' charter were impaired. With that issue settled, the PSC gave Citizens permission in September 1913 to lease the Indianapolis Gas system, which was accomplished on September 30. Even before the PSC's ruling, the two companies had cooperated when the Langsdale Avenue plant had flooded in March 1913 and Citizens had run a pipeline from its Prospect Avenue plant to supply it with gas during the emergency.

The combined operation had 566 mi of mains, 388 mi of which were from Indianapolis Gas, and 62,773 customer meters in use. The Langsdale Avenue plant could produce 5 e6cuft of gas from its coke ovens and 6 e6cuft of water gas daily, while the Prospect Street plant could produce 3.5 e6cuft and 2 e6cuft, respectively.

Challenges and rate increases
Munitions manufacturing, which had increased in Europe due to World War I, required benzole and toluene, two coal tar derivatives that Citizens began producing about 1914. Citizens also began extracting cyanogen from manufactured gas and selling it for use in dyes and treatment of metals, thereby adding revenue to subsidize consumer gas rates. With the entry of the United States into the war in 1917, Citizens began facing coal supply problems due both to coal worker strikes and walkouts and to railroad congestion caused by the war. In addition, colder than normal temperatures in the winter of 1917–1918 caused higher demand such that state officials instituted gas rationing. Citizens bought the Milburn Coal Company of West Virginia in 1917 to assure a coal supply, renaming it the Milburn Coal and By-Products Company. In September 1918, another cold spell increased demand so much that pressure in the lines dropped to almost nothing. The rationing caused Citizens revenues to drop, and the emergency operations overtaxed its coke ovens so that they needed to be repaired or replaced.

In 1918, Citizens sold $1.5 million in bonds to build a new 40-unit battery of coke ovens, but at a high interest rate. In December 1920, it petitioned the PSC for a rate of $0.90 per 1,000 cubic feet due to increases in cost of coal and transportation charges. The city opposed rate hike because it would be more than the $0.60 rate allowed by both state law and the utility's franchise. The PSC approved an emergency residential rate of $0.90. Later in 1921, Citizens surrendered its city franchise in order to operate under a PSC permit; that fall, it issued another $1 million in new stock.

In April 1922, Citizens again petitioned the PSC to raise its rate, this time to $1.25 per 1,000 cubic feet, because it was earning only a 2% return on investment and needed $450,000 for upcoming bond redemptions. The city's mayor, Samuel L. Shank, was adamant that Citizens was wasting money and threatened to "throw the Citizens Gas Company into receivership". The PSC rejected the rate request, so Citizens filed for an injunction in Federal court, which ordered a temporary rate of $1.20 and appointed a special master who determined that the company's assets and economic conditions justified an even higher rate than the company had requested—$1.33. In response, the PSC set the residential rate at $1.10. The new rates stabilized the company's books and allowed it to expand its water gas plant on Langsdale Avenue and make improvements at Prospect Street.

As the company's economic position improved, rumors began circulating that Eastern financial interests wanted to buy Citizens and abolish the trust. In 1925, investors believed to be associated with Cleveland investment banker Cyrus S. Eaton, who had invested in a number of public utilities, began an effort to buy shares of Citizens stock. The company's board urged shareholders not to sell, and the offer expired in June with few shares having been tendered. The company was operating well enough that it asked the PSC to reduce rates in 1926.

Preparation for city ownership
Under the 1905 franchise agreement, the city had the right to buy Citizens in 1930 for $2 million, an amount equal to the face value of the shares of common stock. The company's indebtedness of millions of dollars would also be a factor. Some stockholders thought the amount they would receive would be inadequate since they had bought the stock for amounts higher than face value. There was also concern that if the city were involved, politics would interfere in the efficient operation of the utility. The focus of the discussion was therefore whether municipal ownership or private ownership would be better. Opponents of the city takeover made two legal arguments: First, that when Citizens gave up its city franchise in order to operate under a PSC permit, the 1905 agreement was no longer in effect and, second, that the city did not have the authority to make the agreement in the first place. Supporters, on the other hand, argued that Citizens was a public trust that only city ownership could preserve. Citizens Gas trustees issued a statement on December 17, 1928, contending that the trust could remain in operation even if the city did not purchase it as long as it operated as a public utility.

State legislators from Marion County led efforts in the General Assembly to enact laws enabling the transfer to the city. One prevented the PSC from intervening in the transfer. Another created a city utilities district with bonding power. Five trustees, with two appointed by the mayor, two by the circuit court, and one by the city council, would appoint a seven-member board of directors who in turn had staggered terms. The legislature would later amend the law so that the board of trustees itself would appoint the trustees, as was the case with the Consumers Gas Trust. City ownership was a technicality since the city would be holding the assets in trust for the people of Marion County, with the board of directors having exclusive management control. Utility district revenue bonds and mortgage bonds on assets were the only two financing methods permitted, meaning that no city tax revenue could be used. In addition, all hiring had to be strictly on merit and not based on any political, religious, or other affiliation. Governor Harry G. Leslie signed the bills on March 11, 1929, and a week later the city exercised its option.

Opponents filed suit in Federal court to stop the transfer, arguing that the 1905 agreement was invalid, that shareholders should receive more than $2 million, and that the 1913 lease of the Indianapolis Gas assets affected the proposed transaction adversely. The judge ruled in favor of the trust and was upheld by the appeals court. However, it was not until the U.S. Supreme Court declined to hear the case in 1931 that the transfer was free to go forward.

In spite of the uncertainty brought on by the fight over eventual city ownership, Citizens continued to improve its facilities. Construction of an additional 40 coke ovens at Prospect Street in 1929 brought the total there to 120, with a total capacity of 1520 ST of coal producing 700 ST of coke daily. A new 6 e6cuft gas holder that was 238 ft tall when extended and 212 ft in diameter went on line in October 1930 at a cost of $300,000. The new gasholder joined existing two existing ones there that held 1 and 3 e6cuft, respectively, and the 3-million-cubic-foot one at Langsdale, giving the company storage capacity for more that a average day's consumption.

Citizens Gas & Coke Utility established
Four years passed before the utilities district was able to raise the money to effect the transfer. With the onset of the Great Depression, there was little interest from investors. Attempts to sell bonds in 1933 and 1934 were aborted by that lack of interest. The district also tried unsuccessfully to obtain a $9 million loan from the Public Works Administration. The economy improved somewhat in 1935, and the district was able to sell $8 million of bonds in May, using the proceeds to buy all outstanding common shares at $25 plus $6.25 in accrued dividends as well as $1 million of preferred stock, and to retire $2.8 million of mortgage debt.

On September 9, 1935, documents were signed transferring ownership of Citizens Gas to the city, giving it the new name Citizens Gas & Coke Utility. The property was valued at $12,036,399 and consisted of three batteries of 40 coke ovens each, two water gas manufacturing plants, 9 e6cuft of gas storage, coal mines in West Virginia, and 40% of the gas mains in the city. The other 60% of the gas mains were owned by Indianapolis Gas for which Citizens Gas had a 99-year lease with an annual rental payment of $600,000. The city argued that, due to the 1930 buyout option clause, Citizens Gas had not had authority to enter into a lease that extended beyond that date. The city continued to operate the Indianapolis Gas property, but placed the annual rental into an escrow account. Chase National Bank, as trustee for the Indianapolis Gas bonds, filed suit, but in 1939, the U. S. Supreme Court ruled in that the suit should be heard in state, not federal, court. Eventually, a purchase price of $9.7 million was agreed to the the state suit was dismissed. The purchase was primarily funded by $6 million in revenue bonds sold by the district plus the $2,778,900 in the escrow account, and took place on May 1, 1942.

A major improvement in the shipping of coal from the West Virginia mines to the Prospect Street plant was made in 1939. Prior to that time, the coal was shipped some 600 mi exclusively by rail, which, due to railroad scheduling and other factors, had made deliveries undependable and required additional storage and handling of the coal at the plant. Under the new process, coal was sent by rail to a coal depot at Huntington, West Virginia, and barged from there via the Ohio River to Addyston, Ohio, where it was unloaded into railcars for shipment to Indianapolis, with any excess for the day's requirements left in storage in Addyston. This allowed the plant manager to be able to request the next day's needed amount from Addyston with assurance that it would be delivered by the next morning.

An additional water gas unit was built at Prospect Street in 1936, which allowed the water gas units on Langsdale Avenue be put on standby. The coke ovens at Langsdale Avenue had already been mothballed in 1931. In 1940, a 12 e6cuft gas holder was completed at Langdale Avenue at a cost $700,000. It had taken eight months to build and, at a height of 361 ft, it was briefly the tallest structure in the city. By 1967 it was obsolete, being drained in less than in hour in 0 F weather, and was demolished in the 1970s.

World War II and thereafter
The onset of World War II in Europe led to increased industrial activity in the United States. In 1940, Citizens' industrial accounts used 55% more gas in 1940 than any other year since the start of the Depression. The War Production Board forbid new gas hookups for residential heating in 1942, and pleas to cut gas usage by 10% were made; the water gas process required the use of petroleum, which was in short supply due to enemy action in the shipping lanes. On February 26, 1943, the coke oven battery on Langsdale Avenue was reopened after extensive renovations to help meet demand. However, despite wartime inflation, Citizens did not raise its rates from 1941 to 1945.

In 1946, Citizens completed construction of a battery of 47 coke ovens at Prospect Street at a cost of $2 million to replace those in Battery "E", which had been built in 1918. In 1954, the Langsdale Avenue coke ovens were shut down once again, this time permanently, because of the age of the ovens and a slackening of demand for coke; in addition, the city's director of smog control had charged that the ovens at Langsdale were the largest single contributor to smog in the city. The ovens were demolished and the 23 acre site was converted for use by the utility's street department, which was responsible for the gas mains and service connections. In 1958, a storage and meter shop building, a vehicle maintenance garage, and an office and training building were erected, allowing the closure of the West Ninth Street operations building after 80 years of use.

Starting in 1936, the employees of the utility elected representatives to represent them in discussions with management on pay and working conditions in an informal manner. In 1947, organizers from the CIO's United Gas, Coke & Chemical Workers unit, inspired by the success of the United Mine Workers strike in 1946 and the increase in economic inflation, actively recruited members for several weeks, leading to a vote to strike on March 31. Company management initially refused to negotiate with the strikers, but eventually talks were undertaken. However, by mid-June, union representatives recognized they would not prevail and ended the strike. They were also rebuffed in attempts to get the company to reinstate the 325 strikers.

Citizens constructed its current headquarters building at 2020 N. Meridian Street in 1956. The building was designed by the Bohlen & Son architectural firm and replaced the former offices on four floors of the Majestic Building at 49 S. Pennsylvania Street. Those offices had originally been those of the Indianapolis Gas Company, which had established them 18??. In 1958–59, a Burroughs Datatron 205 computer, the company's first, was installed in the headquarters.

Attempts to break the trust
Several attempts were made after World War II to subvert the intent of the trust. In 1946, the city of Indianapolis had run a $600,000 deficit, and rather than raise taxes, demanded that Citizens make a $! million annual payment in lieu of taxes instead of the $160,000 that had been agreed to several years earlier. Citizens refused, and the city council opened an investigation of the company's gas rates and byproduct sales. Citizens offered to increase the annual amount to $240,000, but also stated that the 1929 law under which it operated gave the board of directors exclusive management control.

When a rate increase took effect in January 1948 and a company report showing a healthy financial position became public in February, various customer groups demanded that the city council investigate the utility. The discontent increased in March when a release of hydrogen sulfide at the Prospect Street plant caused the paint on 400 homes north of it to turn shades of purple, pink, and black; this followed a smaller event the previous March and several other more isolated incidents. Mayor Al Feeney described Citizens as "an un-American institution" and attempted to bring it under city control. A bill to add the mayor to the board of directors passed the House of Representatives in the General Assembly in 1949, but it failed to make it out of committee in the Senate.

In 1965, Democrats were swept into power at both the state and city level as Lyndon Johnson won the 1964 presidential election in a landslide. A group of Marion County Democratic leaders known as the "Young Turks" (which significantly did not include the Democratic mayor, John J. Barton) wanted to restructure Marion County government by placing those agencies that had a degree of political independence more directly under mayoral control. Citizens Gas was one of their targets. Four bills were introduced in the General Assembly.


 * One would make the company's rates subject to PSC regulation, overturning existing law that gave Citizens as a public charitable trust some prerogatives not enjoyed by municipal utilities. Citizens did not oppose this bill, and it became law.
 * Another would transfer property taxes paid to other counties on facilities located in them to Marion County. This bill failed due to opposition of lawmakers from the counties that would lose the tax money.
 * The third would allow surplus earnings to be diverted to the city's general fund, although it was not clear how the surplus was to be determined. The fourth would give the mayor authority to appoint and remove members of Citizens' board of trustees, thereby being able to control its board of directors. Both Mayor Barton and Citizens Gas received numerous letters opposing these two bills from people who feared that they would open Citizens to political patronage, Nevertheless, both bills passed both houses of the General Assembly, only to be vetoed by Governor Roger D. Branigan, a conservative Democrat; he was apparently persuaded by the legal opinion of respected Indianapolis attorney Harry T. Ice that the bills were unconstitutional because the city did not own Citizens, but rather functioned as its trustee, and the bills would impair existing contracts, especially of revenue bonds.

The next year, the Greater Indianapolis Progress Committee proposed that Citizens be sold and the money used to build the Indiana Convention Center. However, similar objections were raised which, along with the realization that gas rates would be increased as a result, led to the withdrawal of the proposal.

Return of natural gas
Already in 1930, construction of natural gas pipelines from the production areas in Texas and Louisiana had begun, and the next year various industries pressed for Citizens to start distributing natural gas to them because of the perceived lower cost. The company studied the request and ultimately rejected it for several reasons, including the need to nevertheless maintain manufactured gas plants on standby because existing gasholders could store only one day's demand. Citizens published a pamphlet in 1936 that contended that Citizens could supply 570 BTU manufactured gas for 10 cents, while 1000 BTU natural gas would be more expensive at 33 cents. The issue was put on hold when World War II began.

In the years following World War II, the number of customers increased, but the number was constrained by coal supply problems due to strikes and other causes, resulting in governmental prohibitions an hookups. In 1946, Citizens realized that there was a limit to how much coke it could sell, thereby limiting the amount of manufactured gas it could produce. It therefore approached Panhandle Eastern, which operated a pipeline through central Indiana, but they did not have the capacity at that time to guarantee supply during the winter. In 1948, the Texas Eastern bought the Big Inch and Little Big Inch petroleum pipelines from the Federal government and converted them to carry natural gas. Citizens requested bids from both pipeline companies for supply starting in 1948, but no offers were made until 1950, when both companies offered 10 e6cuft per day, which Citizens planned to blend with equal amounts of its manufactured gas. The Federal Power Commission eventually gave approval to the Panhandle Eastern bid in 1950, and construction of a 26 mi long 16 in pipeline connecting the Panhandle Eastern pipeline at Zionsville, Indiana, with the Prospect Street plant was begun. The increased supply allowed Citizens to end the ban on new home heating connections that had been in effect since the war. The increasing use of natural gas also meant that the utility's reliance on coal was decreasing, a change symbolized by the replacement, in 1950, of the steam locomotive at the Prospect Street plant with a diesel one.

The amount of natural gas received rose by another 20 e6cuft in 1952, raising the heat content of the gas Citizens distributed from 570 BTUs to 625 BTUs. By 1955, Citizens could receive a daily total of 44 e6cuft of natural gas from Panhandle Eastern and could produce 18 e6cuft of manufactured gas from its coke ovens, with standby capacity of 30 e6cuft from its water gas plant and 45 e6cuft from its liquified petroleum gas (LNG) facility. The company decided to increase the heat content of its gas to 800 BTUs in 1956, which required the company to replace the valve tips on the gas appliances of all 149,000 customers with ones that would work efficiently with the higher heat value.

In 1959, the daily supply of natural gas was increased by another 21 e6cuft, allowing 10,000 homes on a waiting list for heating to be supplied. Additional increases in supply allowed Citizens to raise the heal content of its gas to 850 BTUs in 1961 and 900 BTUs in 1963, but no modifications to the valve tips were needed.

Underground storage and the "loop line"
The increase of heating customers meant that gas demand during winter months could far exceed the amount of daily supply, such that even dozens of traditional gasholders could not provide enough supplemental gas during a prolonged cold snap. In the 1950s, Citizens started exploring possible sites for underground storage, looking for limestone formations capped by an impervious shale layer. In 1961, the company secured rights to a 14 e9cuft reservoir under 6000 acre of land in Greene County in southwest Indiana, with options on another 4000 acre. Citizens built a 20 in pipeline that ran 58 mi from the storage field to Indianapolis. Eventually six storage fields were developed in Greene County.

As the service area expanded further from the central city, Citizens extended the gas mains and replaced mains radiating from its Langsdale Avenue and Prospect Street plans with larger ones. Already in 1949 it had constructed a 31000 ft high-pressure line for $700,000 from the coke ovens on Prospect to the gas holder at Langsdale to improve the gas supply to the north and northwest sides of the city. It was decided that a large pipeline looping around the city would provide better service. 21 mi of 20 in pipeline was constructed on the north and east sides connecting the Panhandle Easter pipeline with the Prospect Street plant in 1960, replacing the 16-inch pipeline that had originally been built. The second half of the loop, on the south and west sides, was completed in 1967. It allowed twice the amount of gas to be drawn from Panhandle, and added another connection to the pipeline from the Greene County underground storage.

In the 1950s, coke and by-product sales constituted the majority of the utility's revenues, but by 1965, the reverse was true. In 1951 there were 129,035 customers, of which 8,000 were for residential heating, and in 1965 there were 186,385, of which more than 90,000 were for residential heating. In 1967, 95 percent of all new homes in the service area had gas heat, and 83 percent of new apartments had gas water and space heating. As demand increased, Citizens started building an LNG storage facility in Beech Grove for $6 million in 1969. The 234 ft tall structure could hold the liquid equivalent of 1 e9cuft of natural gas that could be released at the rate of 160 e6cuft per day.

In the spring of 1957, the Milburn coal mine was sold because the coal from it had failed, for a year and a half, to meet the standards for producing foundry coke. However, due to the other activities performed by it, the organization structure of the subsidiary was retained with the name changed to Citizens By-Products Company.

Energy crisis and response
The energy crisis in the 1970s affected Citizens and other natural gas utilities as the number of wells drilled for petroleum and natural gas in the U.S. declined and Panhandle and other pipelines began reducing allotments to their customers. In January 1973, Citizens announced it would no longer accept new customers, a ban that lasted until 1978. The OPEC oil embargo starting in October of that year, plus colder than normal winter temperatures, exacerbated the problems. The winter of 1976–77 saw record cold, leading to televised pleas from the utility for customers to reduce usage. Citizens had to pay substantially more for replacement gas supplies, and rates paid by customers nearly tripled between 1966 and 1977.

As the energy crisis eased, Citizens recognized that its coke ovens were approaching the their end of life. Even though the manufactured gas produced by them was a minor portion of the total amount of gas delivered to customers, the fact that it was a reliable quantity not affected by natural gas curtailments led to the decision to build new ovens at Prospect Street. However, funding the project, named K-79, required Citizens to petition the PSC to allow the profits from the manufactured gas division to fund the upgrade rather than supply a subsidy to consumer gas rates. With PSC approval obtained, groundbreaking was held on April 10, 1978, for the $81 million project of 72 coke ovens. The new ovens were twice as big as the ones being replaced and, with the 88 existing ovens, would allow coke production to increase from 239,000 ST to 662,000 ST after the new battery was activated in December 1979. These were the last coke ovens built in the U.S. that were not owned by a steel plant.

In the early 1980s, Citizens decided to obtain 10% of its natural gas supply from sources under its direct control. It acquired ownership of 19 wells in Oklahoma. Beginning in September 1993, 3 e6cuft of gas from the first four wells were transported daily via Panhandle Eastern. Citizens also contracted with a subsidiary of the Indiana Farm Bureau Cooperative Association for natural gas from the association's oil wells in Gibson and Knox counties. In 1986, Citizens obtained a second gas pipeline supplier, Texas Gas Transmission Corporation. Construction of a 50 mi pipeline from the Texas Gas pipeline in southern Indiana to Citizens was begun in June 1989 and completed in October.

In September 1987, Indiana Energy, which has a large gas distribution system in central Indiana, wanted to enter talks to acquire Citizens. The proposal died when Indiana Energy was unable to state how the conflict between Indiana Energy's fiduciary duty to its stockholders as a for-profit company and Citizens' duty to its customers as a public trust could be resolved. On June 19, 1989, Beurt SerVaas, president of the Indianapolis City-County Council, introduced a proposal to the council to sell Citizens to help pay the city's share of the Circle Centre Mall's construction and other items, but in response to public opposition, he withdrew the proposal on August 10. Two years later, William H. Hudnut III, the outgoing mayor, proposed selling the utility to help pay for the city's incentive package to attract a United Airlines maintenance center to the airport, but Stephen Goldsmith, the incoming mayor, dropped the idea.

Citizens participated in several joint ventures with other utilities. It partnered with Indiana Energy to create ProLiance Energy to manage the companies' natural gas supply and to offer those services to other utilities and companies. Within a year, ProLiance had 250 customers and had become the largest transporter and gas purchaser on both Panhandle Eastern and Texas Gas. In 1997, Citizens and Indianapolis Power & Light formed Remittance Processing Services to handle payment processing for both utilities as well as other companies. These ventures were operated by subsidiaries of Citizens that were not regulated by the PSC, and their profits were used to subsidize the regulated gas operations.

Coke plant improvements and closure
In the 1990s, the coke operation was the first in the nation to attain QS9000 certification, and its coke was rated the best in the country by industrial users. In 1998, Citizens supplied one-quarter of the foundry coke in the U.S., earning a record net income $9.3 million. In 1997, Citizens contracted to send all the manufactured gas from its coke plant to Indianapolis Power & Light's (IPL) Perry K. generating station. A 17038 ft-long pipeline connecting the two plants was constructed that summer. As a result of the deal, Citizens no longer had to mix the manufactured gas with the natural gas it distributed to other customers, thereby eliminating an expense. Citizens later acquired the Perry K. plant n 2000 when it bought IPL's district heating and cooling system.

In 2001, Citizens' largest coke customer, LTV Steel, filed for bankruptcy, leading to the immediate layoff of 100 of the coke division's 400 workers and the abandonment of a third of the coke ovens. Citizens discontinued all coke and manufactured gas production in 2007. The structures on the site have been demolished, and the Marion County Criminal Justice Center is being constructed there.

Recent events
In 2013, the Environmental Defense Fund, in collaboration with Google Earth Outreach, conducted a survey of the number of gas pipeline leaks in a dozen U. S. cities by driving detection equipment on a sampling of streets with pipelines. It found that the Citizens system had the best rating, with an average of only one leak per 200 mi, Mesa, Arizona, had one leak per 60 mi, and the other ten systems had one leak every 1 to 10 mi. Citizens had begun a program in the 1980s to replace cast iron, wrought iron, and bare steel pipes in its distribution system with modern plastic and cathodically-protected steel materials so that by 2013, less than one percent of its system used corrosive materials.

Water supply and distribution
In the early years of Indianapolis, individuals and businesses obtained water from private wells or from area streams. Several abortive attempts were made to establish water works, including one in 1866 that succeeded in laying a mere 50 ft of pipe. In 1869, the Water Works Company of Indianapolis was chartered and, in 1871, it purchased the Central Canal to power hydraulic pumps at Washington Station. The Panic of 1873 caused financial difficulties for the company as it spent $400,000 that year to lay more than 20 mi of water mains, yet could secure only 784 customers. Moreover, its stockholders were sued that spring for "maintaining a nuisance" on the lower arm of the canal due to sewage draining it, although the suit was eventually dismissed and the company sold that portion of the canal. In 1874, a large fire destroyed the Sheets Hotel, and the company was blamed for not being able to supply enough water to fight the fire. There had already been complaints that water mains had not been extended to the northern edges of the city and, more critically, the quality of the water was poor. The city council recommended building a city-owned gravity system with a reservoir on Crown Hill (the site of today's Crown Hill Cemetery), but the voters defeated the proposal. Finally, the company went into receivership and its assets, along with its 1,300 customer accounts, were sold on April 23, 1881, to the founders of the Indianapolis Water Company (IWC).

Thomas Edward Hambleton, an Eastern banker, was the first president of IWC, although he was seldom in town and left the actual operation of the company to others. Among the board of directors were former governor Conrad Baker and former U.S. Treasurer John C. New. Thomas A. Morris, who had been closely involved in running several railroad companies, was appointed as the new president in late 1881. Under Morris, planning for the Riverside Plant on White River north of Fall Creek was begun in 1888 and construction began in 1889, with an expansion built in 1901. The problem of contaminated water continued, however, and outside engineers such as Allen Hazen and E. G. Smith recommended the use of the sand filtration process in 1896. Construction of the sand beds began in 1902, but before they could be completed, a severe storm in the spring of 1904 disabled the Riverside Plant and caused a large amount of river water to be pumped into the mains. A typhoid epidemic broke out and, although the company was cleared of culpability for the epidemic, the company increased its effort to finish the filters, completing them in 1904. The first filter beds were on the west side of the canal south of Fall Creek, making Indianapolis one of the first large U.S. cities to treat its water supply. At a conference on "pure water" in 1908, a tour of the filtration plant was on the agenda.

In 1891, the company moved from its original offices at 23 S. Pennsylvania Street to the former bishop's residence of the Episcopal Church at 113 Monument Circle. Concerns about the city's ability to combat fires continued. In 1898, Frank Bihlmaier was hired as a "fire attendant" whose job was to respond to all fire alarms by hurrying to the sites of the fires and ensuring that the fire hydrants were operational. When Morris died in 1904, Frederick A. W. Davis became president; he had been the treasurer and one of the original directors. Davis died in 1909 and was replaced by Linnaeus C. Boyd, who had been vice president since 1904.

IWC began purchasing land north of the Woodstock Country Club for construction of a reservoir in 1907, buying the Cynthia A. Butch farm for what newspaper accounts erroneously stated was over $100,000. In actuality, only $50,000 had been paid, and $20,000 of that had come from Boyd and an associate, Hugh McK. Landon, personally. The company wanted only the lower portion of the acreage but the owner would sell only the entire tract, so Boyd and Landon bought the upper portion and built their homes on it. After the reservoir plans fell through, the general public, not knowing the entire story, had suspicions that the entire project had been a scheme to enrich the two men at the customers' expense.

Clarence Geist era
In late 1912, Boyd and Landon sold their interest in the water company to Clarence Henry Geist. The company at that time was considered to be the largest privately-owned water utility in the country. Besides the IWC, Geist eventually owned a number of utility and other companies, including Philadelphia Suburban Water Company; by 1930 he had a net worth of $50 million and was reputed to be the largest individual holder of utility stocks in the U.S.

Initially Geist held the position of president, but since a number of his business interests were located on the east coast, his headquarters were in Philadelphia, Pennsylvania, leading many in Indianapolis to see him as an outsider. A new state law went into effect four months after he took control that required a majority of the directors and all the officers of a utility to be Indiana residents, so he created the office of chairman of the board for himself and named Clarence L. Kirk as president. The requirement was repealed in 1917, at which time Geist reassumed the presidency and Kirk became general manager.

The Fall Creek Pumping Station was opened in 1914 on Fall Creek near the intersection of Keystone Avenue and Allisonville Road to supply water to that area of the expanding city. Deep wells supplied part of the station's water supply for the next twenty years. In November 1915, a gastrointestinal disease swept through the city. After several possible causes had been eliminated, suspicion focused on the water supply. Guinea pigs were injected with city water to see test those suspicions, but the animals showed no symptoms. However, complaints about the water's foul taste and odor continued into 1916. The IWC determined that drainage of water from coke washing by Citizens Gas into Fall Creek was the cause and blamed the city for not extending its sewer system. The city in turn blamed IWC for using Fall Creek as a source while the Central Canal was emptied for repairs, so the company quickly refilled the canal.

In June 1923, Geist gave a dinner party in honor of the company's new general manager, Carleton E. Davis, replacing Kirk who had moved to Citizens Gas. During the party, Geist announced that the IWC would be seeking a 20 percent rate increase to fund $10 million of water service extensions throughout the city, surprising the guests, especially Mayor Samuel "Lew" Shank. Shank was irate and led a petition campaign against the increase. The Public Service Commission approved a 12 percent increase in late 1923. In November 1923, city and civic leaders began plans to ask for a rehearing and, if that failed, to seek court action, and Shank sought to have the PSC disbanded. However, IWC also filed suit in federal courts, contending that the full 20 percent increase should be allowed. In April 1926, the U.S. Supreme Court heard the case and, in November, ruled that the company's request should be granted. Shank then charged in December that the company had offered him $40,000 to run for governor, but the next day's Indianapolis Times headline was "Are You Lying, Lew?", helping to bring a sudden end to the animosity between Shank and the water company.

In 1932, the company again filed for a rate increase, which the PSC approved. triggering another dispute with the city that resulted with the IWC slashing rates charged the city for fire protection and lowering the the minimum monthly charges for residential users. However, rates were raised for some developers to compensate for the reductions, and those developers obtained an injunction against the new rates. The company appealed to the federal court, which referred the matter to the PSC, which then approved a second rate increase in December 1932. The dispute between the city and the company continued in court for several years; however, in May 1938,both sides agreed to a delay so that the company could undertake a two-year improvement project that would employ 500 men. The case finally ended after seven years with the U.S. Supreme Court once again agreeing with the company.

Possible sale to city
During the dispute, city leaders and civic groups lobbied for the city to buy the water company. Geist died in June 1938, leading to speculation that the Indianapolis utility would be sold to help cover the inheritance taxes due on Geist's extensive holdings. Indianapolis mayor Walter C. Boetcher and the city council came out in favor of acquiring the IWC. Newspapers reported that secret negotiations were underway, but they apparently were so secret that neither Howard S. Morse, the company's general manager since 1925, nor Harold Shutt, the executor of the estate, knew anything about them. It turned out that C. W. McNear, head of a Chicago investment firm, was independently attempting to broker a sale via intermediaries. The candidates for mayor in the 1938 elections, Democrat Reginald Sullivan and Republican Herman Wolff, offered only cautious support.

When Sullivan took office in January 1939, he worked with the Indiana General Assembly to pass enabling legislation. As a result of his negotiations, McNear stated that $22.8 million would be an acceptable price. The city thought that amount was too high even though they had previously determined that any amount less than $26.5 million would save the city money since it was the utility's biggest customer. The city hired Judson E. Dickerson to evaluate the company. He reported on July 1, 1939, that the company's assets were worth $21,261,663, but that the revenue bonds issued for it would need to include $2 million for construction of a dam on Fall Creek and $300,000 working capital, for a total of about $23.6 million. The negotiations finally ended in August when Shutt refused to provide guarantees that the city would not be liable for any state or federal taxes subsequently imposed. Newspaper polls indicating that city residents were opposed to the purchase by a 7 to 1 margin were also a factor.

Geist Reservoir
In 1913, Geist had engaged Leonard Metcalf, a well-known hydraulic engineer from Boston, to evaluate future water usage of Indianapolis. In 1923, Metcalf's firm issued a report that the natural supply of White River and Fall Creek would be insufficient. The IWC then purchased 5000 acre in the Fall Creek valley northeast of Indianapolis for a reservoir in the 1920s and 1930s. Construction of the reservoir and its pumping station and treatment plant were begun in 1941 and filling of the 2000 acre 7 e9gal reservoir was completed by March 1943. At the time, it was the third largest lake in the state, behind only Lake Wawasee and Lake Maxinkuckee. Boating and fishing on the reservoir were prohibited because it was a water supply, disappointing area sportsmen; however, a public area for fishing from the shore was opened in 1947.

Wastewater and sewerage handling and treatment
Prior to the 1870s, Indianapolis, in common with most cities at the time, used culverts and wooden troughs to collect excess storm water and transport it to nearby streams, while human waste was stored in privy vaults and cesspool s that were occasionally cleaned by public or private scavengers. In 1869, the city began construction of a stormwater sewer system that had been designed by Moses Lane and approved by Ellis S. Chesbrough, both sanitation experts. That plan divided the city into two drainage districts consisting of Pogue's Run and the Central Canal. By 1891, 26.66 mi of sewers ranging in diameter from 1 to 8 ft had been constructed, of which 21.3 mi were brick and 5.34 mi were pipe. However, a "Sewerage Committee" appointed that year by the Commercial Club of Indianapolis found that the 70 existing sewers were all in poor condition, with a number of them needing to be replaced. Moreover, they were carrying both surface drainage and sewerage, dumping the effluent untreated into White River, Fall Creek, Pogue's Run, Pleasant Run, and the canal.

The Indianapolis Board of Public Works hired sanitation expert Rudolph Hering, whose June 14, 1892, report recommended that the city build a combined sewer system in which both surface water and sewerage were carried in the same sewers, with outlets to allow overflow into streams during storms that exceeded the capacity of the system. He divided the city into five districts that used the canal, Fall Creek, Pleasant Run, and Pogue's Run as their boundaries. From the date of the report to 1909, the city constructed 224.25 mi of sewers at a cost of just over $3 million.

Not included in the 1892 plan was a sewage treatment plant. Instead, untreated sewage continued to be dumped directly into area streams. In 1898, the secretary of the Indiana State Board of Health, Dr. J. N. Hurty, stated that it was "criminal" that the city put thousands of pounds of pollution into White River every day. Due to its filth and odor, Pogue's Run from New York Street and what is now Interstate 65 to the White River near Kentucky Avenue and McCarty Street was diverted into a tunnel/sewer consisting of two channels, each 16 ft wide and 18 ft high that was constructed in 1914–1918.

The city requested that the 1915 Indiana General Assembly pass a bill to establish a sanitary district to construct and run a sewage treatment plant, but the assembly declined, probably due to animosity between the Democratic city administration led by Mayor Joseph E. Bell and Republican lawmakers from Marion County. Even though the bill was subsequently passed in the 1917 legislative session, progress was slow. The new Sanitary District did not receive approval from the State Board of Tax Commissioners to levy taxes until 1920 or later, so it had to borrow money from the city in the meantime. While the enabling legislation allowed the Sanitary District to place the treatment plant as much as 5 mi outside the city limits, the decision was made to put it on Sellers Farm at the confluence of Eagle Creek and White River, which the city already owned and on which had already located its garbage reduction plant. When the treatment plant opened in 1925, it was originally named Eagle Woods Sanitation Plant, but now, after a number of upgrades, is known as the Belmont Advanced Wastewater Treatment Plant.

Initially the Belmont plant was a 50 e6gal per day activated sludge plant, one of the first large such facilities in the U.S. Three aeration tanks and twelve final clarifiers were added in 1938, and secondary treatment for up to 120 e6gal per day was added in 1955. Tertiary treatment (nitrification and filtration) with a similar normal capacity, rising to 150 e6gal at peak times, was implemented in the late 1970s through early 1990s.

A second treatment plant, the Southport Advanced Wastewater Treatment Plant, opened in July 1966 on the eastern side of White River at Southport Road. It was a daily secondary (activated sludge) plant with a capacity of 28 e6gal that was later doubled to 56 e6gal. It also was updated in the late 1970s through early 1990s to provide tertiary treatment of the same capacity as the Belmont plant.

, the Belmont plant handled an average of 120 million US gallons a day, peaking at up to 300 e6gal, while the Southport plant handled an average of 125 e6gal a day, peaking at up to 180 e6gal. Together they could process 70 e9gal annually.

NOTE: Tertiary treatment was first for any large U.S. city.

Digindy project
In 19??, the city of Indianapolis was sued by the Environmental Protection Agency (EPA) and the Indiana Department of Environmental Management (IDEM) for failing to meet the Clean Water Act due to the city's combined sewer system. The city submitted a Combined Sewer Overflow Long Term Control Plan to the EPA and IDEM and the plan, after revisions, was approved in a consent decree issued by the court in December 2006. The city agreed to expand the capacity of the two wastewater treatment plants, bore a system of underground tunnels to capture excess raw sewage from the sewer system and store it until it could be treated at the plants, and undertake other measures to reduce the amount of untreated wastewater from entering streams. Under the consent decree, 97 percent of sewage overflows in Fall Creek and 95 percent in White River are to be eliminated, with no more than two storm events causing overflows on Fall Creek each year, and no more than four such overflows on the other streams. The project is named "DigIndy".

On August 26, 2011, ownership of the wastewater system was transferred from the Indianapolis Department of Public Works to the CWA Authority, a division of Citizens Energy Group. The city also paid $29 million to terminate the contract with Veolia North America to operate the city's water and wastewater systems; the contract had started in 2002 when the city purchased the Indianapolis Water Company and was not due to expire until 2022.

Early plans were to build soft earth tunnels about 50 ft underground but by the time the consent decree was entered, the city had decided to use a tunnel boring machine (TBM) to excavate tunnels in the limestone/dolomite bedrock 250 ft below the surface. Originally, four such tunnels, each 18 ft in diameter, were to be bored under various streams: White River (5.8 mi), Fall Creek (3.8 mi), Lower Pogue's Run (1.8 mi), and Pleasant Run (7.3 mi). The two treatment plants were to be connected with a large-diameter conventional sewer, but this was changed to be a fifth tunnel, the 7.6 mi Deep Rock Tunnel Connector (DRTC). An interceptor sewer was to be built to keep raw sewage from entering Eagle Creek, but in 2015 the contractor suggested digging a 1.7 mi deep rock tunnel by backing up the TBM after it had excavated the DRTC to the point where Eagle Creek joins the White River and boring from there; the tunnel added 17 e6gal of capacity and lessened construction time.

The first contract was awarded to JF Shea-Kiewit JV for the boring and other construction of the DRTC, with separate contracts for the other sections to be bid and awarded later. After further consultation, Citizens Energy awarded Shea-Kiewit a contract to bore all the tunnels with a single TBM and only eight large-diameter shafts by backing the TBM up to dig spurs to the main DRTC and White River alignment and then backing it out of the spur and "walking" it forward. The TBM was manufactured by Robbins and was refurbished after having previously been used to bore the Second Avenue Subway in New York City. After each tunnel was bored, a 12 in thick unreinforced concrete liner was poured. The total length of the tunnels will be approximately 28 mi and will hold approximately 250 e6gal.

Excavation of the DRTC began in January 2012 in the shaft at the Southport treatment plant and finished in 20??, at which point the TBM was backed up to bore the Eagle Creek tunnel, finishing in 20??. It was moved forward to bore a spur for the Pleasant Run tunnel, and then repositioned to start excavating the White River tunnel in 2016, diverting to the east to bore the Lower Pogue's Run tunnel, completed in November 2017 just east of the I-65/I-70 freeway downtown. While pre-excavation grouting was applied where probe drilling indicated groundwater inflow above a threshold rate, a section of the Lower Pogue's Run tunnel was in weaker rock that required the installation of a welded PVC liner before the application of the concrete tunnel lining. The TBM was again backed up and resumed boring the White River tunnel, turning toward the northwest and following the river to bore a spur ending south of 16th Street. It was then backed down to bore the main stem of the White River tunnel, diverting from the river to head north under the Indiana University–Purdue University Indianapolis campus and northeast under the lower Fall Creek, completing the digging of that section in April 2019. It then began on the Fall Creek tunnel, completing excavation of it in April 2020 at a large diameter shaft near the Indiana State Fairgrounds from which it was retrieved. After refurbishment, the TBM was reinserted in mid-2021 at a launch shaft at the end of the Pleasant Run spur that had been bored earlier. Excavation of the Pleasant Run tunnel is expected to take 20 months, ending in late 2022/early 2023 under the Pleasant Run Golf Course.

An underground pump station consisting of four 30 e6gal per day pumps was installed at the Southport plant in a constructed cavern that is 100 ft long, 60 ft wide, and 75 ft tall. Overflows from the Combined Sewer Outlets (CSO) will be diverted into the tunnel system by 33 drop shafts. The lower sections of the shafts were bored up through the bedrock from the tunnels, while the upper portions used an oscillation excavation method through the overburden. The upper sections of all the shafts, including those for unconstructed portions of the tunnels, were excavated by August 2019. Several of the CSO outlets will be eliminated by separating storm water and sewage sewers in the drainage areas of the State Ditch, Lick Creek, White River, and the upstream portions of Bean Creek, Eagle Creek, Fall Creek, and Pogue's Run.

Base capacity of the Belmont plant will be unchanged, but peak secondary treatment capacity will be increased to 300 e6gal per day. The peak secondary treatment capacity at the Southport plant will be increased to 250 e6gal per day.

The DRTC and Eagle Creek tunnels were placed in operation on December 29, 2017. The Lower Pogue's Run and White River tunnels entered service in July 2022. The Fall Creek and Pleasant Run tunnels are expected to open in 2025. Upon completion of the entire system in 2025, up to 99 percent of raw sewage overflows—6 e9gal annually—will be captured and subsequently treated.