ElectriCities will not refinance power plant debt

The way ElectriCities went about working the debt ratio and the options they used to project refinancing of the debt was a no win situation.  The only way to ever get out from under this debt is to approach our Congressional leaders and get a very low interest loan from Washington. 

From AIG to GM, ERON to WorldCom, the Government has handed out cash for the asking.  We don’t propose a bailout or a handout. We are simply asking for all parties to seriously look at the the feasibility of flexible Government intervention in an effort to support the citizens of eastern North Carolina. 

So far, the only Congressman that will even listen to us is G. K Butterfield.  He hasn’t acted on anything, and was supportive of the Cap & Trade Bill.  But, at least he’ll pick up the phone and listen to our concerns.

Jones has said that he thought this was  a local matter and he was not going to get involved.  (Well, he’s gotten involved in other issues not so different from this).  It may very well be that the only way to get Walter Jones involved (and on the side of eastern North Carolinians) is with a crystal ball so he can foresee which side of the fence this will fall.  After all, we surely don’t want Walter sitting on the wrong side of a vote, now do we?

Etheridge has been candid and honest when he says the only money he foresees us getting is weatherization money.  At least he’s honest and that’s a start.  He has raised valid points as to why no one will want to spend political capital to get us out of this debt.  Plus, I don’t think Etheridge has a “hidden agenda” not to help us.

The Real Deal: Trying to refinance the 2.5B debt through commercial bonds is a waste of time.  ElectriCities knew this even before they looked at the idea.  The meeting a few weeks ago relevant to this issue was basically smoke and mirrors. 

But, the need to eliminate this debt is as valid today as it was six months ago when this group started.  And years ago when citizens first started to questions the high price of power in eastern North Carolina. 

Citizens in eastern North Carolina are living paycheck to paycheck.  Some are not even that well off. To eliminate the burden of this utility debt would put deposable income back into the hand of ratepayers and back into the hand of small business (where it belongs).  To make us prosperous again, we’ve got to have some spending money in our pocket.  We’re not going to have spending money because we owe 2.5B!

Official says refinancing wouldn’t save money

By John Henderson
Rocky Mount Telegram
Sunday, June 28, 2009

WILSON — A citizen’s group advocating lower electric rates in Rocky Mount had hoped their goal could be accomplished by the refinancing of bonds funding power plants.

They learned Wednesday that would not likely happen.

“At this point, it is not a (financially) viable option,” said Tim Tunis, chief financial officer for ElectriCities, the administrative arm of the power company serving Rocky Mount.

Meeting at the Wilson Operations Center, city officials from throughout the eastern region of the state on the power agency’s board listened to staff explain the many negatives and few positives of refinancing a major portion of the agency’s $2.5 billion debt that funded construction of power plants.

Tunis presented three refinancing options for the agency’s portion of the debt funding the Shearon-Harris power plant near Raleigh and Brunswick power plant in Brunswick County.

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About George Fisher

George is a freelance writer, an author and a Democratic political consultant. He has worked as Deputy Communications Director for a Senatorial campaign and Campaign Manager for several NC House races and one congressional race. He previously worked as a news producer for a local television station.
This entry was posted in Cap & Trade Bill, ElectriCities, price, Rep G K Butterfield D NC, Rocky Mount Telegram and tagged , , , . Bookmark the permalink.

One Response to ElectriCities will not refinance power plant debt

  1. Dan says:

    Alice Garland left as VP Public Affairs in 2003; Jeanne Bonds left in 2007 from same position. Then Estherine Davis chased away Karen Johnson, Dan Crawford, Theresa McFadden. So you wonder why they cannot lobby right. They have Estherine Davis and Drew Saunders, the bottom of the lobbying pack.

    and just to remember … since annual meeting has been cancelled

    News and Observer Archives and Pat Stith stealth reporting in 2001

    ElectriCities of North Carolina sent 16 board members and executives –
    and 15 of their spouses – to a Marriott hotel in Orlando in June 2000
    for a three-day conference of the American Public Power Association.
    The trip cost ElectriCities $43,889.

    Board chairman John T. Walser Jr. defended ElectriCities’ long-standing

    practice of paying for spouses to attend the conference, saying some
    board members wouldn’t go otherwise.

    “This is a capitalist operation,” he said. “If you’re gonna play in the

    enterprise game, you gotta act like an enterprise. You’ve gotta be able

    to play like Duke and CP&L.”

    For all its capitalist ambitions, however, ElectriCities is a
    government agency – and a financially troubled one at that. The debts
    of the municipal power agencies it represents far exceed their assets.
    But at times ElectriCities acts like a profitable private company.

    The board of directors spends freely on travel, meets often behind
    closed doors and pays its members generously. And when ElectriCities
    needed someone to handle a half-million-dollar advertising contract, it

    hired a firm headed by the husband of one of its top executives.

    Five or six years ago, ElectriCities’ board meetings were almost always

    open to the public.

    But when the organization began looking for a way to shift billions of
    dollars of debt to customers of Duke Power and CP&L, the board started
    meeting more frequently in closed sessions.

    Now it goes into executive session so often – several times per meeting

    is typical – that the board has adopted a policy of starting each
    meeting with an executive session.

    Board members who are not directly employed by one of the electric
    cities receive $500 a meeting for up to two meetings a month.

    By comparison, members of the State Board of Transportation, which
    oversees the state’s road-building program, get $15 a day.

    Longtime board member William H. Batchelor said the $500-per-meeting
    payment is a pittance, considering all the hours he works.

    “This is a public entity,” Batchelor said. “But it’s unlike any other
    government board you’re gonna find anywhere. In the magnitude of what
    they manage in terms of the investments, the revenues and the staff.”

    Franz F. Holscher, another board member and a former chairman, said the

    $500 payments help assure attendance.

    “We used to have to fight to get a quorum,” Holscher said. Now, he
    said, attendance is 100 percent at just about every meeting.

    ###

    Hiring a husband:

    Top officials at ElectriCities do not agree on how the organization
    hired Mike Davis Public Relations Inc. to run a series of advertising
    campaigns costing $496,842 in 1999 and 2000. Mike Davis, president of
    the firm, is the husband of Alice D. Garland, director of public
    affairs at ElectriCities.

    Garland said her division hired her husband’s firm.

    “Well, actually, I mean, to be technical, Maureen Shields hired Mike
    Davis PR, but Maureen worked for me so, yeah, my division hired Mike
    Davis PR,” said Garland, who is paid $127,957 a year by ElectriCities.

    “I just have always just been very aware that there would be folks who
    would view having my company, my husband’s company, working for us as
    being a conflict of interest.”

    But she added, “I absolutely believe he was hired because he was very
    good at what he does and he was absolutely not hired because he’s any
    relationship.”

    ElectriCities CEO Jesse C. Tilton III gave conflicting explanations on
    how Davis was hired.

    When asked if he saw anything wrong with Garland’s division giving the
    contract to Davis, he replied: “No, because she didn’t award it. Her
    division did not award it. That was a board decision. … I have a
    crystal clear recollection.”

    After Tilton was unable to produce minutes showing when the board voted

    to award the contract to Davis or any discussion about hiring the firm,

    he offered a new explanation.

    In a memo to The News & Observer, Tilton said the board approved the
    “concept of the campaign” in a closed meeting on June 10, 1999.

    “They were not asked to approve engaging Mike Davis PR because that
    consulting firm was already engaged by the organization,” Tilton said.

    Minutes of the June 10 executive session say nothing about spending a
    half-million dollars on an image advertising contract.

    ElectriCities also hired a company and directed it to hire Davis to
    give his wife public relations advice.

    Garland said ElectriCities hired McCorkle Policy Consulting of Durham,
    and McCorkle hired Garland’s husband. That arrangement was approved by
    the board of directors, according to the minutes of a meeting on Jan.
    22, 1999.

    “We actually had McCorkle engage Mike, basically, so that I hadn’t
    engaged Mike,” Garland said.

    Garland said ElectriCities paid McCorkle $122,000 in 1999 and 2000. Of
    that amount, she said, McCorkle paid $26,000 to her husband.

    She said she talked with the McCorkle team every week or two about how
    to handle legislators and how that was going to play in the press.

    “When we’re talking about, you know, tweaking our position, or changing

    our position, you know, they are saying, don’t do that, or if you do
    it, say it like this,” Garland said. “And they’re constantly gauging
    how we’re doing within political circles and telling us what we ought
    to be doing. Mike Davis was in on all those calls.”

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