10/11/2007

I think this "Pilot" should crash.

Some of you might recall a "Pilot Program" whereby the City of Great Falls, acting through Electric City Power, obtained permission to sell electrical power to a small group of residential customers for a 5 year period. This was an idea floated by City Staff, as the PSC denied the City's application to become a small-customer supplier. In response, the City said, in effect, "Well, let us try it with this group and if we can keep the lights on, maybe the PSC might reconsider down the road." When I inquired about this Pilot Program back in June, I was told that "According to Martha Cappis, ECPI has a license with the PSC to provide a small specific group of customers power. The customers were chosen to include small commercial and residential customers that we could not serve under our existing license due to their average monthly usage being below the PSC set limit. We 'brainstormed' to come up up with a diverse group of knowledgeable participants who we could rely on to give us an unbiased opinion of our service, rates, etc. To date, we have not initiated the program." [Emphasis mine]

Now, one nice thing about being a blogger is that people tell you things. So, after the last Electric City Power Board of Directors meeting, I received an email. The following is a direct quote from the email; I wasn't at the meeting, so I cannot confirm that it is accurate: "John L[awton] made a rambling speech complaining about the Bloggers making much about who was on the ECP residential power pilot program list. Lawton said he doesn't read the blogs, but others tell him about what is posted there and it's wrong. The people on the pilot program list were volunteers who understood the risks involved and agreed to participate so the City could test the mechanics of operating a residential power system. While the program may not be safe enough for 'widows and orphans,' the people involved were selected by the City because they understood the risks."

Recently, I have been seeking information from the City about the latest group of customers signed up by the City. Based in part on Mr. Lawton's purported statements at the ECP Board meeting, I have also been seeking information about the Pilot Program.

Well, today we learned something new. I received the following Memorandum from our very helpful City Clerk, Lisa Kunz, after she received it from Martha Cappis:













What do you know? There is a Pilot Program. And the "participants were able to choose a flat rate or an adjusting rate for the term of the program." Ok. And do any of these customers look familiar to you? Balzarini? Lawton? Patton? Gregori? Or how about members of the Electric City Power Board: Gray, Golie, or Ryan?

And there are contracts, too. First there is the "Optional Customer Service Contract." This is the "adjusting rate" that Ms. Cappis spoke of in her recent memo.

























Then there is the "Standard Service Offer," or "flat rate" contract:


























That's all well and good, of course, completely above board and all that. After all, these are certainly "knowledgeable" and "unbiased" participants. Nope, nothing unusual here, move along please...

Wait a minute, though. Humor me. Take a look at the first page of these two contracts. Take a close look at the rates our intrepid test group is paying for its power. The adjustable rate group is paying, for the next 14 months, until 12/31/08, a rate of $0.0472 and $0.0508 per kilowatt-hour. Adding the "Administrative Fee," they are paying a rate of $0.048616 to $0.052324.

Interestingly, though, if we review the Agenda Report from November 8, 2006, we find that the City purchased from SME "an additional 7 MWh's block of power beginning January 1, 2007, through December 31, 2008..." As background for this purchase of additional power, we learned "The proposed Residential and Small Commercial pilot program was recently approved by the Montana Public Service Commission, and services will begin in the near future." Presumably, then, this additional power was purchased, in part, to service the needs of the Residential program, right?

Well, what is Electric City Power paying for this power, then? This power that it is selling to City Staff and ECP Board members for a rate between $0.048616 to $0.052324? Keep reading the Agenda Report.

That's right. We're paying SME $0.0528 for every kilowatt. Electric City Power is then selling these kilowatts to City Staff and ECP Board members for less than it paid for them. It is selling these people power at a loss.

How bad a deal is that for the rest of us? Well, not only are we taxpayers subsidizing the power costs of these folks, we have to buy our power from Northwestern Energy. We're paying $0.056811 for our power, because we don't have taxpayer subsidies for our power.

Wait, you ask. What do you mean taxpayer subsidies?

Think about it. Every time one of the Pilot Program customers uses a kilowatt hour of electricity, Electric City Power loses a penny or two on that deal. It doesn't sound like much, but it does have to come from somewhere.

The Electricity Fund lost over $400,000.00 in the last fiscal year (2006) for which we have audited financial statements. (See p.28)

Electric City Power lost over $400,000.00 and it is selling power at a loss to its Board Members and City Staff?

Am I out of line, here? This just doesn't seem right to me.

Hat Tip: Thanks to Mayoral Candidate Ed McKnight for providing me with the link to NWE rates.

36 comments:

Anonymous said...

Now that's worth waking up to read. Anyone know Neil Cavuto? Bet he'd be fascinated with this analysis.

Anonymous said...

You mention that Lotten doesn't read the blogs. How does he get his news? From the Fibune?? hahahaha! No WONDER he thinks everything is just fine and dandy in river city, for he's got his finger firmly on the pulse of..........THE CORPORATE NEWS HEADQUARTERS BACK EAST SOMEWHERE! Did you happen to catch the Fib editorial today? In essence, it says that in SPITE of a disastrous, fascist city government, GF is doing GREAT! I mean, look at the pools? Good thing we don't have trains, cause if we did, the Fib would point out that at LEAST the trains were running on time! What a joke. Gee Guy, again you do the Fib's job for'em.

LK

Anonymous said...

Hey GeeGuy. What does this mean?

"No officer or employee shall use or attempt to use his or her official position to secure unwarranted privileges or advantages for himself, herself or others"

Anonymous said...

If this is not criminal intent, what is it?

Anonymous said...

Anon 6:20, Stebbins voted her husband a raise recently. Why should that silly little standard apply?

CODE OF ETHICS MY ASS!

This is the most corrupt bunch of uncivil servants and corporate co-conspirators I have ever witnessed. Just who and the hell do they think they are fooling?

Today's work will be put on the back burner. After I get my blood pressure under control, I am going to write every newspaper in the state and contact every TV news station until someone gets off their ass and does an investigative report. This would be a great piece for the Wall Street Journal - That will put us on the map.

Great work geeguy, but this is only tip of a giant iceberg. Now it is time for the citizens to get to work.

mary jolley said...

When will the City elected officials have a public vote to approve these contracts?

After the November election?

The last Public Rate Hearing was micky mouse. One part was a year late and the other was a year early.
Before the hearing I called the PSC staff attorney asking for help with that hearing. He said the PSC has nothing to do, no juisdiction over ECP. I asked about the "Residential Program", he laughed and said,"Oh, Lawton's friends."
I thought he was kidding.

Over a year ago I spoke to A PSC Commissioner and asked about this program. He said, "They even had trouble filling out the paperwork and had to re-submit it again and again. It shouldn't have been the difficult."

One of the first ECP Board meetings I attended I was stunned by The Chairman's words,"I don't know anything about electricity markets." I suspect he still dosen't.

Throw the bums out, vote Jolley.

Anonymous said...

What is the fully loaded cost for the special customers of ECP after all the fees are applied. Are they similar to those of Northwestern? At the end of the day, I pay a total rate of $0.0994 kWh

Anonymous said...

Jolly & Kahn on the Commission
Geeguy as City Manager
McKnight on the board of ECP

And a 40 yard dumpster to take away all the garbage.

WolfPack said...

Is this really a big deal for residential customers? My electric bill averages about $75 a month with only about half of that for supply charges or $37.50. If they are selling 20% under market we are only talking $90 a year per individual. For a pilot project to flush out any prospective bugs this seems cheap compared to the potential size of a city wide project. I do think it should have been offered to the general public on some kind of lottery system to avoid the appearance of impropriety. This may demonstrate ineptitude but hardly high crimes and corruption for $90 a co-conspirator.

GeeGuy said...

So you're arguing that it is de minimus?

Allan said...

I don't think the actual cost savings to the pilot program participants is that big a deal, but it stinks like yesterday's fish to find out that the people who throw so many roadblocks up in front of the public's right to know about a public venture are profiting in any way. Whatever happened to avoiding even the appearance of impropriety?

Anonymous said...

It's about time these corupt SOB's are taken down!!!

Anonymous said...

Wolfpack, pull your head out of your ass. Who cares if its "de minimus" or not, its wrong. The City is lying, telling lies to cover other lies, and treating this stuff like its their money, and their own deal. This is an outrage. Wake up and smell the corruption. The stench is nauseating.

Anonymous said...

Wolfpack, I guess you keep your shoplifting under $90 per year because it is below your threshold of corruption and crimes? Like being only a little pregnant vs. 9 months. It is not the amount - it is the intent!

I have followed your posts for sometime and viewed you as intelligent and a voice of reason and balance - IN THE PAST. You have zero credibility from this point forward.....

Anonymous said...

I plan on cheating the city out of $90 dollars this year because its not a big deal. It will be my own little pilot plan.

Lets see now how will I exact this fee? Ideas people? $90 in parking tickets in the trash? How about it oh great legal mind wolfpack?

WolfPack said...

Geeguy- I was just trying to make the point that nobody is exactly enriching themselves here. The claims of corruption by posters are just silly. Ineptness and corruption are two different charges. As with other things done under the current manager a reasonable action is done in an unnecessary manner that raises questions. The way some posters are reflexively calling every city action criminal is a bit nutty (sorry LK). I assumed the point of your post was that this is another example of half-assness not that you had proof of city officials lining their pockets as many have interpreted it.

Hutch said...

Wolfpack... Neither Inept or Corrupt are qualities I look for in an elected official.

Anonymous said...

I think it's half-assed AND corrupt. They don't even cheat competently.

GeeGuy said...

Wolfpack, to be honest, I am not sure what to think.

You make the point that it is not a great deal of money. Fair enough. Tell that to a little old lady on a fixed income who pays full rate for her power and pays city taxes.

Another point, too, is that we don't really know if it is just a few bucks. Sure, it's a few bucks if you take the raw cost of the power and the raw sales price to the "Pilot Program." But this venture is losing significant money. If you somehow matched all the expenses with the power sold, we might find that these people are saving significant sums over what it is costing the taxpayers.

And, finally, I think my real point is this: they don't own it. See, this all started with my requesting documents regarding the city's "new customers." What is overlooked in all of this (at least for now) is that they are refusing to provide this information to the public.

Sure, they go to the Tribune and say whatever the heck they want. But when we ask for the supporting documents they tell us we can't see them.

They don't own it.

Then we find out their selling our power to themselves and a few of their best friends at below cost?

I'm trying not to get all breathless about this deal, but it just seems wrong to me.

big sky husker said...

I'll be curious if the idiots at the Tribune pick this story up.

Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

Who owns Lunber Yard Supply?

GeeGuy said...

Anonymous posted the following:

Someone explain to me what part of the city code of ethics a specific dollar amount come into play.

I deleted the second portion. Let's keep it PG, especially with the involvement of the CMR Debate Team.

mary jolley said...

One of the customers First Interstate Bank - won business a No Bid General Obligation Bond deal. Way higher interest rate than the pool bond.

And the staff did not ask for the additional $500,000 thousand mentioned they
just spent it?

From Commission meeting minutes:
On October 18, 2005, the City Commission authorized staff to negotiate and award the sale of bonds. Staff negotiated with First Interstate Bank and awarded the sale based on a twenty year term, and a rate of 6.79 percent for 5 years. The rate thereafter would be based on the spread between this rate and the five year constant maturity rate determined at the time of closing. This sale was based on interest only payments for the first two years, and a balloon payment at year five. There was a penalty for early redemption. It was anticipated that an additional financing request would occur in FY 2007 for the remaining $500,000 for a total of $2 million in interim financing.
PS
This was a "private negotiated sale", I think it is against State Law. We have a Charter form of Government and must follow state law dealing with Finance. The bidding process was overlooked. I hope the new city manager reads the law.
Pss
Dear Lawyers forgive me for offering a layman's observation.

And another thing,
Veolia Water a Private Company and another customer of ECP got a $100,000 loan from the city. I don't know why.

Anonymous said...

Just for the record, wolfpup, I called no one "criminal" in this thread. In fact, I rarely use the word criminal. I prefer corrupt. And yes, I do indeed believe that corruption is rampant not only in city offices, but also in the p.d. You must have me confused with another poster.

LK

Anonymous said...

By God can you people not leave these brave visionary leaders alone? Look at the gigantic risk they are taking for us all by being the guinea pigs.

For crying out loud, this is electricity here. They are risking a possible blackout during weekend football games or facing no hot coffee in the morning. My God, the humanity, these folks are leading from the front!

They would never do anything to risk our well being without trying it out first. A small price to pay for brave leaders.

Thank you Johnny Kilowatt Lawton for all you have done for the city.

Anonymous said...

Mary Jolley said:

"And another thing,
Veolia Water a Private Company and another customer of ECP got a $100,000 loan from the city."


Documentation please, otherwise its just hearsay and bad gossip.

Anonymous said...

Everytime I get depressed about the obvious abuse of authority and lack of the law applying to my local government, I come here and find that others are just as.... interesting.

Thank You, Geeguy, for keeping up the fight. Maybe, just maybe, we can do something to stop this kind of abuse by shining a VERY bright light on it.

Moorcat

Anonymous said...

Perhaps "shining a VERY bright light on it" isn't enough.

mary jolley said...

Veolia Water Documentation
Information comes from the City's Comprhensive Annual Financial Report, I think or it might aslo be in the latest budget report.
Go to the City Web Site, there is a little rectangular box on the left hand side of the home page type in Veolia Water and see what pops up. Oh, you have to click on search.
While you are at it Type in Repeal Ord.2861 and see what pops up. There will be one and only one document fround in that search. If you look up just about any other Ord. Or Res. There will be from 6 to as many as 10 hits. These will include Staff Reports, Work Sessions, Agenda Reports, a couple Public Hearings. Hey I got other things to do today. so please do a little work yourself.

Anonymous said...

Candidate Jolley said,"Hey I got other things to do today. so please do a little work yourself."

You brought up the subject.

Is this going to be your attitude if you get elected when a constituent calls you on an proposterous claim?

Almost sounds like another Dona.

GeeGuy said...

Oh, come on, Anonymous. That's a cheap shot. She actually told you how to find the information, didn't she?

Anonymous said...

I asked for a citation.


Veolia needs loans from the City about like Greg needs a loan from larry kiedrowski.

Anonymous said...

Geeguy, Holy Hal has a new friend that adores you......

bramble

Joined: 07 Apr 2007
Posts: 66

PostPosted: Sat Oct 13, 2007 2:38 pm Post subject:
I hope the Tribune continues to keep its reporters on this story. The Tribune is the only outlet that tries to cover this story fairly. The TV and radio stations are ignoring it, and there's a right wing -- I'm talking right of Mussolini -- blog out there that is ignoring the true facts and fabricating its own. This distortion is lapped up by community whack jobs, such as Redneck Hippie, aka Larry Krajl of Central Catholic, who don't want reporting that covers both sides of the story, such as the tribune is doing.

The blog I refer to is run by a local attorney who has ownership interest in local casinos. He believes the city's sign ordinance and other zoning policies hurt casinos, so he is trying to get even with Lawton by distorting the Highwood Power Plant facts.

Keep those reporters on this story!

Anonymous said...

It's kinda fun to speculate just WHO these bozos are that write this stuff. Oh sure, they're too cowardly to use their real names. SO, that just leaves a WHOLE LOT to the imagination. My guess is that they work for the city. (Lotten, donna, city council members? I dunno) Kinda pathetic really, when you think about it. The biggest issue to hit GF in a looong time is the coal plant, and these cowards are afraid to go on record with their real names! They don't DESERVE to part of the same democracy as the rest of us! Wonder if they fly those little American flags off both sides of their cars like my neighbor does? They'd be better off just flying a nice little YELLOW one!........or maybe white. SURRENDER MONKEYS! (check your Constitutionally guaranteed rights at the door when you enter primadonna's whore house! Sorry, but I can't do that, even WITH a bouncer named Chief Dorky!) But seriously, what do they have against vigorous debate? Why do they hate freedom?I don't get it.


LK

Anonymous said...

Anonymous...1:24 PM, October 13, 2007

When a constituent calls Mary Jolley on an alledged "proposterous claim" then my question is:

Why did you, a constituent, post no documentation to prove Ms. Jolley wrong?

It seems you are the preposterous one to not correct an error IF you have any fact(s) at hand.

No Offense.