CLECO identified $23.1 million in inappropriate trades over a three-year period, including $13.1 million in 2001. In May, 2004, former CLECO employees, David Pugh and Sam Sansing, acting through Energy Management Services (E.M.S.), entered into a 50% contract for any of the return that the City of Alexandria might get back from CLECO in regards to the City's ratepayer for electricity in return for information supplied by E.M.S. E.M.S.'s contract with the City of Alexandria was later reduced to 20%.
In July 2004, the Louisiana Public Service Commission and Cleco arrive at $16 million settlement for retail customers, but, due to the Public Service Commission lacking jurisdiction over municipal rate contracts, Alexandria ratepayers did not share in the settlement.
In September, 2004, Cleco sues Sansing, Pugh and EMS, claiming the ex-employees did not honor the non-disclosure agreement both men signed while working for Cleco. Sansing and Pugh later countersue.
In June, 2005, the City, in addition to City Attorney Kelvin Sander, hired, on contingency fees, two Baton Rouge utility litigation lawyers, and local attorneys Bridgett Brown and Philip Hunter. Phillip Hunter did not go through with the representation of the City. On June 22, 2005, the City of Alexandria files a lawsuit in state court against Cleco alleging an array of wrongdoings, including an allegation that Cleco defrauded the ratepayers of Alexandria out of overcharges in electrical rates. Cleco had the state court lawsuit removed into federal court in July, 2005. The City of Alexandria and Cleco subsequently entered into court enforced mediation, for which all parties had to file non-disclosure agreements.
Then, on August 5, 2006, Mayor Ned Randolph placed Chief of Staff Harold Chambers and City Utility Director Sonny Craig on administrative leave for allegedly contacting Cleco officials about the executive session in November 2004. This action by the City eventually resulted in a lawsuit by Chamber and Craig which resulted in a settlement for them.
On January 17, 2006, the federal court, Judge Dee Drell, entered two orders known as the “Agreed Order” and “Protective Order.” This order kept the Cleco and City of Alexandria mitigation a secret from us citizens.
In December, 2006, local attorney Jacques Roy was elected as mayor of Alexandria.
In January and February, 2007, R.W. Beck provides its estimates of damages projected to be due the city after review of all information. Also, in February, 2007, R.W. Beck provides its estimates of damages projected to be due the city after review of all information. This information was also kept a secret from us citizens of Alexandria.
In February, 2007, Mayor Roy withdrew from his representation of Sam Sansing in his countersuit against Cleco after Cleco had sued Sansing.
It was also in early 2007 that the City of Alexandria fired local attorney Bridgett Brown from the Cleco case, while at the same time she had filed an intervention suit in the Alexandria vs. Cleco case for her fees.
On May 27, 2007, eight Alexandria citizens -- Armested Franklin, Diane Tatum, Julius C. Sweazie, Estella Deal, Henry D. Ceasor, Linda R. Strong, Curley Holden and Geraldette Johnson -- filed a class-action suit claiming the city has defrauded ratepayers since 1997, which Alexandria City Attorney Chuck Johnson says that those claimants are merely "piggybacking" the pleadings of the City in its Cleco case. The ratepayers are being represented by Shreveport attorneys Larry English and Sam Jenkins. This suit has yet to go to trial.
On December 30, 2008, in a 5-2 vote, with Councilmen Goins and Larvadain voting against it, the City Council approves the power supply agreement between the municipality and Cleco Corp. The agreement will effectively settle litigation brought against the Pineville-based electric company by the city in June 2005 concerning allegations that Cleco overcharged ratepayers. It subsequently became clear that Cleco had ripped us off anywhere from over $60 million to $100 million. City Attorney Chuck Johnson was to check and see if the City would have to purchase a security agreement for the $29 million that Cleco was going to pay for the future output of the D. G. Hunter power station. Cleco's offer also included a lower rate for us, and the right to audit the books. Despite the protests of Patrick Lacour, a former Cleco employee, and this blog that the City get rates from other electrical providers, the City turned a deaf ear.
Some of the problems that this blog had with this Cleco offered deal were:
- will be absolutely no pay back to us ratepayers for the almost $100 million that Cleco stole from us;
- Cleco will purchase the future power supply of the D.G. Hunter power plant for $29 million, but Cleco will demand a letter of credit to secure it;
- Of that $29 million, $9 million of it will be rebated to the customers, and the City of Alexandria doesn't know how yet;
- No Request for Proposals were put out to see what utility rates were available to Alexandria;
- We have not heard yet what the contingency fees will be to E.M.S. or the lawyers that were not paid by the hour;
- Although it IS NOT required to do so, all negotiations by the City Council and C.U.R.E. have been kept a secret from us;
- Should we not settle or have dismissed the Larry English filed Armested lawsuit, which seeks the exact same damages as in the City lawsuit versus Cleco, first before we enter into another deal with Cleco?
- Why are we, who sued Cleco in the first place, letting Cleco dictate the terms and the hurry up atmosphere of the settlement?
- There is proposed to be absolutely no admission of fraud on Cleco's part which, although not necessary, is important to our settlement negotiations;
- The right to audit Cleco's records can be a part of any contract and is not special to the City of Alexandria.
On Feb. 20, 2009, Mayor Roy announces a plan to designate $9 million to provide rebates to commercial and residential customers who were overcharged from 1995 to 2005. This amount is woefully short of the $60 million to $100 million that Cleco defrauded us ratepayers of Alexandria out of.
In March, 2009, the city council asks the Commission on Utility Reform and Equity for a suggestion on the best way to rebate the settlement money to ratepayers, with C.U.R.E. being given four options of the best way to rebate both past and future consumers.
On April 28, 2009, The D.G. Hunter plant begins supplying power to city residents rather than purchased electricity from Cleco. Mayor Roy denies it as a negotiating ploy as the two sides still await the signing of a new power-supply agreement, instead saying it is simply cheaper to purchase the natural gas. Later in the week, after Cleco drops the city’s rate, Cleco becomes the city’s primary power provider again.
On August 10, 2009, C.U.R.E. makes a recommendation to the city that it suspend the current Power Supply Agreement with Cleco, which the City Council ultimately approved. This move to reject Cleco's proposal was ultimately based upon the City having to pay for a security agreement to cover the $29 million for the future output of the D. G. Hunter power plant, with no mention being made of the $9 million in rebates to us ratepayers being significantly inadequate for the $60 million to $100 million that Cleco ripped us off for.
Although Cleco itself removed the City case into federal court, in this Summer and on December 10, 2009, Judge Drell denied two motions by Cleco to have Alexandria's lawsuit dismissed. On October 16, 2009, Judge Drell ordered that reopened the case and set the trial for" Feb. 22, 2010.
On November 24, 2009, Judge Drell refused to order a continuance in the trial date, as was requested by the City of Alexandria. The trial date is still set for February 22, 2010.
On December 21, 2009, Cleco filed a Motion for Summary Judgment to have, once again, Alexandria's lawsuit dismissed. This Motion for Summary Judgment Under Interconnection Agreement, Motion for Partial Summary Judgment on Prescription (Document No. 278) , Motion for Partial Summary Judgment on the City of Alexandria’s Claims Under the Louisiana Unfair Trade Practices Act, Motion for Partial Summary Judgment on Antitrust and Rescission Claims, and Motion for Partial Summary Judgment on Waiver filed by C L E C O Corp, C L E C O Evangeline L L C, C L E C O Generation Services L L C, C L E C O Marketing & Trading L L C, C L E C O Midstream Resources L L C, C L E C O Power L L C and Release of Claims Under 2002 Services Agreement filed by C L E C O Marketing & Trading L L C, and has been assigned to the February 12, 2010 motion date. There will be no oral arguments heard on this motion.
On December 29, 2009, it was reported that CLECO’s Opelousas customers are charged $1.10 per kilowatt hour, but by comparison, Lafayette Utilities System charges it customers 80 cents per kilowatt hour. Cleco decided that day to extend its contract negotiations with the City of Opelousas for a year. (See: "
Cleco contract decision does matter").
I applaud Judge Drell's decision to move the Alexandria vs. Cleco onto trial on February 22, 2010. I say let justice prevail. If Cleco avoids going to trial and getting the City's lawsuit dismissed, it will mean that the City has spent a ton of money on this litigation and Cleco will get away with highway robbery of us ratepayers of Alexandria. If, on the other hand, Alexandria wins, perhaps we ratepayers will finally get a lot closer to the $60 million to $100 million that Cleco owes us. We will need the federal court to step in and give us what we truly deserve, as we cannot count on the City of Alexandria to work for our best interests.
See Also:
In today's editorial of the Alexandria Town Talk, there appeared "
