There has been a lot of confusion over the settlement agreement between the City of Alexandria and Cleco.From the links below, which consist of the Town Talk and and Alexandria Mayor Jacques Roy's own explanation told us, here are the primary terms of interest to us:
I. $3 million paid by Cleco to the City which is supposed to cover "the city's expenses for attorneys' fees, expert witnesses and the mediation process would be "zeroed out" by the agreement".
We don't know where this money is, but, according to Judge Drell, it IS NOT in the wooden lock box that City Attorney Chuck Johnson and later Jacques told us that it was in.
II. $6.5 million as a "milestone payment" after the fifth year will be paid by Cleco.
III. Between $50 million to $63 million in direct and indirect savings to the city, whatever that means.
The $3 million to cover the costs of legal and expert fees is not enough to cover them, which clearly they are not, is due to Jacques Roy selling us out to Cleco and dismissing our fraud lawsuit and then selling this bill of goods to the Alexandria City Council.
The something between $50 and $60 million in "direct and indirect savings" is presumed to mean future lowering of our electricity bills. We have not seen any such reductions yet.
These are all of the cash, and savings, to be paid to the City by Cleco. These are part of the reasons that I have been writing for a year now that we should have not accepted this deal and went on to court with our fraud lawsuit.
The power supply agreement that we entered into with Cleco should have not been made as a part of the settlement with Cleco. There is some doubt that the City ever sought RFPs from any other rate suppliers, and if they were Jacques told us that we couldn't see them because they were trade secrets.
The City of Alexandria is now having to break its word to pay several of the parties that were involved in the fraud lawsuit against Cleco.
The only money I see for rebates to us will be the $6.5 million after 5 years. After the City and business claims, that will leave chump change for us individual ratepayers.
If anyone has any contrary information, I urge them to send me the documents that show it and I will post them online.
See Also:
They have muddied up the pool so bad you could not see the bottom even if you drained it.
ReplyDeleteI guess it's enough for the Town Talk to blindly believe administration claims, gobbeldeegook, catch phrases and regurgitate them without investigation. If they don't, they'll be on the receiving end of a tantrum I reckon.
ReplyDeleteWhere is the new settlement agreement, the City website removed it? How exactly are we going to be self sufficient? What is that going to cost? If the Hunter plant is not going to be used and upgraded it is less than worthless, its ongoing COST. So what is the cost to upgrade it and what upgrades? Can somebody please explain how we are going to save anything and why is $3 million to lawyers and experts better than $30 million for rebates? I see the Town Talk will devote a whole story to describing in detail where the council and administration is sitting in 2011, but what about these questions? I could care less where these people sit.
Greg,
ReplyDeleteThe only money the city ever got up front was the 3 mill to cover their fees.
The only other money they will receive is if they purchase a specific amount of power over a period of time.
The savings language, is Jacques speak and it basic bull.
CLECO only provides around 20% of the cities power.
Period
I think you are starting to see it clearer now.
ReplyDeleteJacques negotiated a terrible deal for the city and was out lawyered frankly. But he went to Southern so that about says it.
So DG Hunter just sits there doing nothing but being an expense, too old to run regularly and reliably as it is without a couple hundred million to upgrade. Where is that money going to come from and how long will it take to reap the returns on that in savings, if there even are any?
ReplyDeleteWhy can't the Clown Talk or a KALB reporter simply ask for an explanation of this self sufficiency plan and how Alex benefits? I don't mean hot air and BS, but reality.
The first settlement should have been implemented and Roy, Crutchfield and Marcotte should not have given us the crap we are now stuck with. $29 million in settlement no. 1 v. $3 million in no. 2 and a chance of an additional $6.5 million if we buy enough power from Cleco over the first 5 years of the deal. Thing is, Cleco doesn't have to sell us anything, although I'm sure they'll sell us almost, but not quite enough to get the "milestone" payment. Ya'll need to get off of this "RFP" bitching. You can send out RFP's all day, but with Cleco owning the transmission lines, and not being a member of the SERC, they are gonna decide if there is available transmission capacity for any purchase we make from a third party. And even if we went to the FERC and forced Cleco to provide transmission access, Cleco nonetheless has the right to insist that the city pay for upgrades to its transmission system that are needed, in its opinion, to insure the integrity and reliability of its transmission system. Such improvements could cost several million dollars or tens of millions of dollars. The fact is that despite transmission "deregulation," the city remains a captive transmission customer of Cleco's. RFP's are a fantasy.
ReplyDeleteYou state: "We don't know where this money is, but, according to Judge Drell, it IS NOT in the wooden lock box that City Attorney Chuck Johnson and later Jacques told us that it was in." It is true that the money isn't in the "wooden lock box." It is in the City's utility account where it is "frozen" as a result of state district court Judge Randow's injunction issued against the city. The purpose of the injunction is to prevent Jacques from giving the money to his buddies at EMS, while ignoring the liens against that money that Bridget Brown, Sharpe and Davidson have in place. More money wasted by Jacques, paying Baton Rouge lawyers to try and persuade the court to ignore the law, simply because Jacques doesn't like it. Maybe we can get Jacques in the legislature and away from Alexandria.
ReplyDeleteIt is my understanding that the $3 million for Cleco was frozen by Judge Drell, but I thought that I heard Chuck tell the Council Tuesday that money went to pay the hourly rate lawyers.
ReplyDeleteThe EMS settlement didn't come as a result of a buddy deal. The City refused to pay anything to EMS and EMS sued to the City. The EMS settlement only came about after several days of mediation and it still hasn't been paid.
I believe that the City owes EMS, Sharpe, Brown and Davidson for what they did and they should be paid. We have nobody to blame but Jacques Roy if we do not get a rebate.
Since I don't believe in rewarding an egotistical lair like Jacques, I don't want to promote him to a higher office.
Greg, you commented in another thread that as part of the first $29m up front settlement that, "...Cleco WAS NOT going to pay for the letter of credit. Alexandria was"
ReplyDeleteAgain, perhaps there is a misunderstanding over what "paying for a letter of credit" ("LOC") means. "Paying" for a letter of credit means paying the bank charged basis points for it. This $29m LOC would've cost less than a basis point, probably no more than .0075 per year. Cleco expressly agreed to pay those charges as set forth in the publicly posted settlement agreement at Article X, Sect.10.2: "The annual costs associated with the ALEXANDRIA Letter of Credit shall be paid by CLECO..." Of course, that LOC would decline every year until it was zero at the end of the contract term, which I believe was 12 years. The City would have had $29m in the bank and would have to refund Cleco whatever was left, pro-rata, if the City breached the contract say, in year 5.
Because the City is a City, without a LOC it could theoretically have simply kept the $29m, breached the agreement with Cleco and Cleco would have had no recourse except filing suit, getting a judgment, then asking the Council to vote to pay them the money back. The City has already shown that it likes to play that card. It did it with you and that public records matter and the lawyers in the case. So, understand that "paying" for the letter of credit means paying the bank "fee" associated with it. Cleco clearly agreed to pay it. The City would have had $29m in its pocket and Cleco would have paid for the LOC. What is the downside to having $29m in the City account to pay rebates, budget items, resolve claims, etc.? And how is the second settlement, the one we have now, "better" as per Mr. Lacour? I'd be interested to have that explained. Thanks.
Many felt, as do I and Patrick Lacour, that we should have kept the future output of D.G. Hunter. We have used the power plant whenever there was a hurricane or when gas rates were low. I believe that the City is currentlyy having a new gas turbine installed in the power plant just for that reason.
ReplyDeleteI don't know the exact cost of the letter of credit on a sliding scale as you say, but the mayor, the City Council and C.U.R.E. felt that it was too high.
I am glad that we turned down that $29 million offer by Cleco because we were sueing for the $60 million that Cleco defrauded us out of. Patrick Lacour agreed with me. Where Patrick Lacour, David Pugh and myself were disappointed was in this 2nd settlement deal with Cleco that the mayor and the Council entered into. It is this second deal instead of going on to trial that we don't have any rebates.
There is no output from DG Hunter. The first settlement allowed the City to use it during any emergency for the City's use. DG Hunter is not reliable and would probably come apart if it was used for any length of time without major upgrades. The City is having a new gas turbine installed? When? How much is that going to cost? The "cost" of the letter of credit was irrelevant because, again, Cleco was paying for it. I believe the City's "issue" was that they didn't want all of the money up front, which is bizarre. That was the "problem" and CURE did not want a LOC, period.
ReplyDeleteThe problem with going to trial was the risk involved. From what I understand this was not an easy case and liability was not clear. $30m+ in savings and $29m in the bank was a bad deal? To do business with the power company that the City will be doing business with anyway?
Did Patrick Lacour and David Pugh explain how all this market power was going to come in and out of Alexandria? What about the mechanical status of DG Hunter, the repairs and upgrades necessary and the costs involved? Which would then do what? What about the regulatory and transmission issues? It's very easy to make blanket assumptions and generalizations. Reality is a far different matter.
Ask David and Patrick.
ReplyDeleteI reckon the above is an open asking. I'd like to see what they have to say if it helps me understand.
ReplyDeleteAlso, has anyone asked, sent a public records request, inquired, the Town Talk, what the response was to this request for proposals:
ReplyDeletehttp://www.cityofalexandriala.com/documents/Repower.pdf
Is this a central part of the settlement? Why did the city remove the second settlement from its website, leaving only the analysis of the first settlement? Does Mr. Pugh or Mr. Lacour know? Has anyone asked the administration? Don't we have a right to know?
It appears that the second settlement, "self sufficiency" is described here:
ReplyDeletehttp://www.veoh.com/browse/videos/category/news/watch/v19027379J7Y2aDbe
It describes not money paid to Alex, but Alex paying no less than $50 million to improve DG Hunter so that it can operate when the cost of gas is low enough to make it economical to run. Who is paying for this? Where are the rebates coming from that are supposed to be the subject of Cure type meetings and discussions? This seems like the hotels thing......
In that "administrative briefing" the Town Talk asked really only one question which should have been one of about 20 to get to the bottom of this. No one bothers to ask or understand it seems. No big deal, only the utility bill for every single person and business in Alexandria.
I think that you have some confusion about the Cleco settlements and the fireing up of D.G. Hunter Power Plant.
ReplyDeleteI think that possibly the video you linked is one of mine.
I also don't see what this video has to do with any rebates. The mayor and Mike Marcott gave the figure of $50 million as the high priced way to fix D.G. Hunter. Of course that doesn't mean that the City will have to go that expensive of a route. In fact, the City Council has receently approved some updates to D.G. Hunter recently.
The video has absolutely nothing to do with Cleco rebates. In fact, you will notice thatthe video is from Sept. 2009, but the final settlement with Cleco wan't until the second settlement offer which was approved by the City Council until Feb. 2010.
But if Jacques really wanted to do something fir ALL Alexandria citizens, he would have taken the $40 million in SPARC money and fixed D.G. Hubter.
Bye we they mean the city council and mayor bcause the citizens will never see any of it refunded to them even though it was stole from them.
ReplyDelete