Eagle Creek Reservoir is one of 10 sources Citizens Water plans to tap to collectively provide, by 2031, up to 25 million gallons of water a day to Lebanon Utilities. (IBJ photo/Chad Williams)
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Construction is set to begin early next year on a $560 million project to send millions of gallons of water each day to Lebanon to meet the demands of the state’s 9,000-acre LEAP Lebanon Research and Innovation District.
As work advances in the coming years, the Citizens-Lebanon Water Supply Program is expected to provide 2 million gallons of water per day to Lebanon Utilities by 2027, 10 million gallons per day by 2028 and 25 million gallons per day by 2031 when the project is expected to be complete.
The project will serve the needs of the LEAP District, where Indianapolis-based Eli Lilly and Co. is building a $13.5 billion manufacturing complex and where Menlo Park, California-based Meta Platforms Inc., the parent company of Facebook, is planning a data center project that could reach an investment of $4.8 billion. Lebanon also stands to benefit from the increased water supply after the city spent years looking for a water source to support new development.
The Citizens-Lebanon program has also drawn concern from residents on the northwest side of the metropolitan area who worry about its impact on water resources and the environment around Eagle Creek Reservoir. About 475 property owners in Boone, Hamilton, Hendricks and Marion counties have received letters from Citizens requesting property easements for the water project, and in some cases, eminent domain is already being litigated.
The project will send water from all of Citizens Water’s sources—including Eagle Creek Reservoir, Citizens Reservoir, Geist Reservoir, Morse Reservoir, the White River, Fall Creek and other groundwater sources—to Lebanon through 53 miles of new water mains installed in the four counties.
While it will receive a greater amount of water because of the LEAP District, Lebanon Utilities will be a wholesale customer of Citizens like nine other central Indiana communities, including the northwestern suburban towns of Brownsburg and Whitestown. By comparison, Whitestown receives about 4 million gallons of water per day from Citizens.
“There are 10 sources of water that power the full system,” Citizens Energy Group spokesperson Ben Easley said. “And the totality of the system is what is being used to supply Lebanon Utilities just in the same way that when I get a drink of water out of my tap, the water could come from anywhere.”
The project will also involve several infrastructure projects aimed at increasing water supply, treatment capacity and pressure. Citizens is developing plans to increase capacity at two water treatment plants—White River North in Hamilton County and T.W. Moses on the east side of Eagle Creek Reservoir in Indianapolis. The utility company will also construct four new booster stations and seven new storage tanks.
Jeff Willman, vice president of water operations for Citizens, said the construction of Citizens Reservoir, completed in 2021, gives the utility group capacity to provide water for Lebanon and its entire network. Cumulatively, Citizens plans to expand its central Indiana water transmission capacity from 256 million gallons per day to 300 million gallons per day.
Citizens Reservoir, a former rock quarry that serves as a backup water supply for Indianapolis residents during droughts or periods of high water consumption, holds around 3 billion gallons of water and can pump up to 30 million gallons a day of captured rainwater into nearby Geist Reservoir.
“Everything we’ve done by adding Citizens Reservoir at Geist enables all of this,” Willman said. “We added 3 billion gallons of water to the system, and we were able to just put some of it in whenever we needed and move to the right spots. That gives us a ton of flexibility on how we operate.”
Last year, the Indiana Finance Authority approved a maximum bond issuance of $700 million to support extension of the Citizens system to provide up to 25 million gallons of water per day to the LEAP District and surrounding Boone County developments. (LEAP stands for Limitless Exploration/Advanced Pace.) The current estimated cost for the Citizens-Lebanon program is $560 million.
Funding for the program was approved through the State Revolving Fund Loan Program, which uses U.S. Environmental Protection Agency grants to provide low-interest loans to improve wastewater and drinking water infrastructure.
Both Willman and Lebanon Mayor Matt Gentry said the loans will be repaid by companies that take root in the LEAP District. For every gallon of water they use, a portion of their rate will go toward paying for the water infrastructure. As the city prepares to receive additional water, Lebanon has set two water-rate districts, one for LEAP and another for the rest of the city.
Lebanon residents and Citizens ratepayers will not bear the cost of the project, Gentry and Willman both said.
“If there was any way this would come back and be financially on the backs of our customers, we would have never done it. That was clear,” Willman said. “We just said we’re willing to help, but we can’t do harm to the people that live here in the process.”
About three years ago, the Indiana Economic Development Corp. explored the possibility of pumping up to 100 million gallons of water per day through a 35-mile pipeline to LEAP from Wabash River aquifers near Lafayette.
However, there are now no plans to provide water via a Wabash River pipeline. Gentry said the Citizens plan to provide 25 million gallons per day “makes Lebanon 50-year water-secure.”
“It puts us in a long-term solid position,” he said.
‘Solve the water problem’
Gentry said water “isn’t a new conversation for Lebanon”; the city looked for additional resources for at least a decade before he took office in 2016. Lebanon, which straddles the Wabash River Valley and the White River Valley, lacks dependable groundwater sources.
In his first meeting with former Gov. Eric Holcomb about the LEAP District, Gentry told the governor water would be a concern.
“They assured me that the state would help us solve the problem,” he said.
Last year, Lebanon suspended new development until the city could identify a new water source because the city reached the limit it could allocate when it agreed to provide Lilly with 864,000 gallons per day for the first phase of its project at the LEAP District.
“That was what kind of put us in the pinch,” Gentry said. “Before Lilly and even today, we’re not at our maximum water usage, but it’s how we allocate the water. Essentially, we put people’s names on gallons of water in the tank.”
Lebanon, which has a population of about 17,000, receives most of its water, 3.6 million gallons per day, from collector wells on Sugar Creek at the property of the former Old Indiana Fun Park. The community also gets 1 million gallons per day from a smaller well within city limits. Combined with the water from Citizens, Lebanon will have access to up to 29.6 million gallons per day by 2031 that will support LEAP projects and new residential and commercial development throughout the city.
“When I got here in 2018, we had a water problem,” Lebanon Utilities General Manager Ed Basquill told members of the Lebanon City Council last month. “And this is going to solve the water problem, at least for the rest of my career or for the foreseeable future.”
According to city documents, Lilly is expected to use an average of 1.07 million gallons of water per day, with peak demand of up to 1.35 million gallons.
In a presentation to the Lebanon City Council last month, Jeff Jacob, an attorney with Indianapolis-based Hackman Hulett LLP representing Lebanon Utilities, told councilors that Meta is expected to use 500,000 gallons per day in 2027, 4 million gallons per day in 2028 and 8 million gallons per day in 2031.
Wastewater generated at LEAP and elsewhere in the city will be treated at Lebanon Utilities’ water treatment plant before it is released back into the Citizens water system.
“We set parameters that Citizens will have to follow when [water] comes to us,” Lebanon Utilities Wastewater/Water Operations Manager Ryan Ottinger told members of the Lebanon City Council last month. “However, when it comes to us, we want to treat it to the same characteristics as our civil water, because we’ll all be blended.”
The city’s water treatment plant is being upsized from about 9 million gallons per day to 20 million gallons per day. Gentry said Lebanon Utilities is planning an additional wastewater treatment plant in the LEAP District that will be operational before the city begins receiving the full 25 million daily gallons from Citizens in 2031. A 2-million-gallon water tower is also planned near the LEAP District.
“If Lebanon hadn’t been able to have LEAP come into the city, it would have doubled our water rates,” Gentry said. “For the citizens of Lebanon, that’s a huge benefit that we’re not seeing. Obviously, it’s harder to quantify an avoided utility rate increase, but when we were talking with Citizens when I came in as mayor, it would have been a significant jump to our water rate.”
Eagle Creek concerns
The first signs of upcoming construction can be seen on Moore Road, which extends from Lafayette Road to the Traders Point area south of West 96th Street. Pink ribbons mark trees selected for removal, and stakes in the ground indicate the path where water mains will be installed.
In preparation for the project, Citizens has sent about 475 letters to property owners in Boone, Hamilton, Hendricks and Marion counties requesting property easements, which provide the right to use another landowner’s property for limited, often specific uses.
Land agents representing Citizens began contacting property owners in February. According to a letter obtained by IBJ, property owners can negotiate an offer with the agent.
Easley said easement needs vary on a parcel-by-parcel basis, but a typical residential property would likely have a 20- to 30-foot easement around a proposed water main. The purchase price of an easement varies according to the requirements of each parcel.
“We’re going to be able to put pipeline in the ground where we have the easements from folks to make the system more redundant and resilient,” Easley said.
If an agreement is not reached, the letter says, Citizens Water “will need to file an eminent domain lawsuit in court to acquire the Easement from your property for Citizens Water’s Project. To ensure the timely delivery of this project to our customers, and the fair and equitable treatment of all landowners, Citizens Water will file the eminent domain case approximately 31 days after the receipt of this offer package.”
Since mid-August and mostly since early October, Citizens has filed more than 40 eminent domain lawsuits related to easements, according to an IBJ and Indiana Lawyer review of court filings. Cumulatively, the utility company has offered to pay defendants about $620,750. The largest settlement offered is $221,500 in a case initiated by Citizens Water against the Eagles Nest Homeowners Association Inc. Most proposed settlements are less than $8,500.
Along with the disruption to people’s property, residents are concerned about the environmental impact on Eagle Creek Reservoir and wildlife that live in and around it, said Lou Ann Baker, a member of the Eagle Creek Advisory Board. She said the reservoir currently has little industrial runoff, and she fears that will change once water starts being returned from the LEAP District.
“We’re simply asking to understand: ‘What’s your plan? What’s your timeline? What research and data do you have to show us that this is a valid and possible use of our natural resources?’” Baker said.
State Sen. J.D. Ford, D-Indianapolis, is communicating with property owners affected by the easement requests. Last year, he filed a bill that did not advance that would have established a state agency to adopt a statewide water management plan.
“I think the state needs to just have an adult conversation about the water in our state,” he said. “We know it’s a valuable resource. We know that we can’t generate it. We can generate all the electricity we want, but we cannot generate new water. And so, who is going to quarterback the water policy of our state?”
The Indiana Lawyer reporter Maura Johnson contributed to this article.
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