"Anonymous said...
http://centrallapolitics.blogspot.com/2009/08/mayor-roy-on-cure-rejection-of-cleco.html
January 17, 2011 5:16 PM
That html code was for my post entitled "MAYOR ROY ON THE C.U.R.E. REJECTION OF THE CLECO SETTLEMENT TODAY". I am not sure why that commenter left the html code instead of the title of that post or what the point to it was. The only thing that I can figure out by this cryptic post, since it had no reasons given for it, is that it was about something I had written dealing with the proposed Cleco settlement and the expert and lawyers fees.
But to further clarify, that post was written on August 11, 2009. The final Cleco settlement was not presented to the Alexandria City Council until February 23, 2010. (See: "THE ALEXANDRIA CITY COUNCIL SELLS US OUT TO CLECO ON 2-23-2010").
Of primary concern in the rejection by C.U.R.E. post was that it rejected selling D. G. Hunter Power Plant to Cleco for $29 million. Then, under that old deal, not the final one, of that $29 million, $9 million of it will be rebated to the customers.
That figure was off of the table at the time of our final settlement.
See Also:
HOW MUCH MONEY ARE WE GETTING FROM CLECO and the posts linked thereunder
Hunter wasn't going to be "sold" to Cleco as part of that deal. As part of the settlement Cleco was paying Alex $29 million up front for the right to use Hunter to generate electricity if it needed to, but Alex still owned it, would keep any upgrades, and could use it in an emergency (hurricane).
ReplyDeleteIt's like if you had a second junked car in your backyard that was not reliable, could blow an engine if you drove it over 50 mph, or too much, that you paid insurance and maintenance on, that you never used, and got 5 miles to the gallon. Then, someone comes to you and says, "I'll give you $500.00 per month for 10 years, paid up front, for the right to use that car if I need it, to call the rental part of my car fleet, I'll maintain it, put gas in it, and do any improvements on it, and you can keep those when the lease is up after 10 years."
How many times has Alex used DG Hunter? How much will it cost to make DG Hunter run reliably and efficiently enough to use it?
You are correct.
ReplyDeleteCleco was only going to purchase the "future power supply" of the D.G. Hunter power plant for $29 million.
I though that I would just make it easier to understand. That is why that I linked the post, so all could read the particulars.
Thanks. There really is no future power supply from DG Hunter without spending a couple hundred million bucks in upgrades, which the City would have got to keep at the end of the "lease". So the City would have gotten $29 million, up front, for Cleco's right to call DG Hunter one of its generation assets that nobody uses.
ReplyDeleteLike the backyard junker car example, is it better to have the car there doing nothing and getting $500/mo. for 10 years, paid up front, or better to have the car there doing nothing but costing you money for which you are paid nothing?
The "sale" of the capacity out of Hunter was nothing more than a means by which to facilitate Cleco giving the City $29 million in cash as part of the overall settlement. Cleco could not very well show on its books and have appear in the press that it paid $29 million in damages, so the capacity "sale," with Cleco paying in advance for the right to call on Hunter should it ever need it, was devised.
ReplyDeleteSo instead the city got $3 million, then $6.5 million after x years if it buys x amount of power from Cleco, but got to keep the junker car that it has to pay to maintain that can't run reliably or efficiently and just sits there?
ReplyDeleteHas anyone seen where the City's self sufficiency model explained? Can someone provide a link to that? I'd like to see the settlement explained and compared to the first one the council approved.
"That figure was off of the table at the time of our final settlement"
ReplyDeleteBecause I believe the mayor rejected it based upon what you've reported. Didn't the Council approve what they thought was that settlement, which was really giving the mayor the authority to accept or reject it? He rejected it, and put togther what we have now, which was removed from the city's website and is generally described as "self sufficiency" and has the benefit of allowing us to keep the junker in the backyard unused. I'd just like it explained how this mystery settlement where $29 million up front was traded for $3 million up front is a great idea. If it is about "self sufficiency" then why does the $6.5 million payment on the back end require that we buy x amount of power from Cleco?
Meanwhile, the Town Talk reported that arts are good but cost money, maw maw baked a punkin pie, Melville wants its ferry back, and described in detail where everybody sits at a counsel meeting.