Central Indiana’s water challenge: supply, delivery and a $597M Lebanon project

Indiana has published new regional water studies, and a newly issued construction permit moves the Citizens-Lebanon Water Supply Program forward. Together, the records show why having water in a river or reservoir does not necessarily mean a growing community has the treatment plants, pipes and financing needed to use it.

Gov. Mike Braun’s Executive Order 25-63 required completion of a statewide water inventory by Oct. 31, 2026. The written report to the governor and Legislative Council is due Dec. 31. As of Nov. 1, BusinessIndy had not located a separately published, compiled statewide inventory report or an official confirmation that the completion deadline was met. Regional findings are already public; their publication alone does not establish completion of the statewide assignment.

What the studies establish

The Indiana Finance Authority has posted an August 2026 Southwest study and September studies for Northeast Indiana and the Ohio River/Southeast region. They describe different local and seasonal risks, rather than a single statewide supply condition. The Northeast study projects growing irrigation pressure in the St. Joseph basin. The Ohio/Southeast study identifies increasing fall streamflow risks in the Whitewater watershed even as regional withdrawals decline with power-plant retirements.

The Southwest study, whose listed study area includes Hendricks and Morgan counties, says usable supply depends on location, dry-weather conditions, treatment and delivery capacity. Its scenarios show declining locally generated water availability and greater dependence on upstream flows and managed storage. Those are planning scenarios, not a finding that Central Indiana is currently out of water.

The older nine-county Central Indiana demand forecast projected average withdrawals rising from 385 million gallons daily in 2018 to 496 million by 2070. Those figures come from the earlier forecast, not measurements taken in 2026. Its companion availability summary identified opportunities along the White River corridor alongside tighter limits outside that drainage system.

Citizens’ July 2026 water-resource plan lists 260.2 million gallons daily of usable capacity under moderate-drought assumptions and maximum-day demand of 244.3 million. Capacity exceeds that demand, but falls 8.5 million gallons short of the utility’s planning goal, which adds a 10% cushion. The plan calls for staged improvements; the gap concerns its reserve target, not a reported current inability to serve customers.

Lebanon’s construction and financing

IDEM’s notice dated Oct. 26 says it issued final drinking-water construction permit WS-13168 for the Royalton booster station and two 1.5-million-gallon ground storage tanks near County Road North 1025 East and Limberlost Lane in northeastern Hendricks County. The permit is a construction authorization, not proof that the facilities are finished or that every local approval is complete.

Citizens’ construction updates list White River North treatment-plant work underway since January, the Cicero Creek booster station since April and several main extensions since spring and summer. Lebanon Utilities’ published delivery schedule calls for up to 2 million gallons daily in 2027, 10 million in 2028 and 25 million by 2031. These are planned delivery capacities, not current consumption. Citizens will sell wholesale water to Lebanon Utilities for distribution to local customers and LEAP businesses.

Citizens’ fiscal third-quarter report, covering the period through June 30, estimates its Lebanon supply project at approximately $597 million. Its public project webpage still says just over $560 million. The financial report separately records about $101 million in project costs incurred and $64.7 million reimbursed by IFA through June 30. Neither the total estimate nor the $700 million borrowing ceiling on the project webpage represents money already spent.

The financial report describes an initial $104.8 million financing agreement and an additional $98.9 million of non-recourse bonds issued in April. It says IFA will seek repayment from Lebanon and the Indiana Economic Development Corp., with Citizens and its affiliates protected from repayment liability. That structure protects existing Citizens customers from those debt obligations; public financing still has repayment responsibilities. Citizens says Lebanon water rates will cover project infrastructure and operating costs.

Citizens also completed its acquisition of Whitestown’s water utility assets, announcing the transaction June 5 after beginning service to customers in late May. Whitestown customers now receive retail water service from Citizens. The purchase excluded Whitestown’s wastewater system.

Eagle Creek and wastewater remain distinct questions

Citizens estimates that the Lebanon program would add 1 million to 3 million gallons daily to Eagle Creek withdrawals and says its studies support that increase. That is the utility’s assessment. A typical-day flow comparison does not by itself establish drought performance or settle the terms of the city’s withdrawal agreement.

Lebanon Utilities’ wastewater FAQ says it ruled out an outfall to Eagle Creek Reservoir on May 1 and is evaluating Boone County locations, including Prairie Creek. Its project overview also retains Eagle Creek conveyance language. Neither page establishes a final approved discharge route.

One important limitation appears in the Southwest study’s technical appendix: its primary Lebanon scenario places wastewater returns upstream of Eagle Creek Reservoir for modeling. The appendix calls the routing a modeling construct and says it should be revised if the wastewater destination or other assumptions change. It is not approval of a discharge site or proof that a Prairie Creek alternative has identical effects.

For businesses and communities, the practical questions are therefore local: what supply is dependable during dry periods, when delivery capacity will be ready, which wastewater route receives approval and who pays under the final agreements.

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