Category Archives: Utilities

This Is How the Trump Administration Will Privatize Our Infrastructure

Source: David Dayen, The Nation, June 20, 2017
 
North Miami Beach’s Norwood water treatment plant is a major source of revenue, serving a region with almost five times as many customers as city residents…. Critics, including plant employees and members of the local Public Utilities Commission, blamed the city for intentional lack of investment and reduced staffing. “It’s on the city workers somehow that the system has fallen into disrepair,” said a spokesman with AFSCME Florida. “If you’re a journalist, and the newspaper is not making money, is that on you?” … As for plant workers, they could lose benefits under CH2M immediately, since the city’s contract with AFSCME expired in 2015. The CH2M contract calls for $2.4 million in annual savings in labor costs starting in year two. And with a fixed fee for operations and maintenance, CH2M can only extract profits and deliver long-term cost savings by cutting corners. …

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North Miami Beach Gives Public Water Utility Serving 180,000 People to Private Firm
Source: Jerry Ianelli, Miami New Times, May 17, 2017
 
None of those facts stopped the North Miami Beach City Commission last night from voting 4 to 2 to outsource its public water utility to global engineering firm CH2M Hill. From here on out, the company will control virtually every operational facet of a water plant that serves more than 180,000 people in North Miami Beach, Aventura, Sunny Isles Beach, and Miami Gardens. … On April 3, the city held a special meeting to begin formal negotiations with CH2M. In the leadup to that meeting, the city’s municipal worker’s union, the American Federation of State, County and Municipal Employees, spoke out against the privatization plan as an attempt at union-busting. The ASFCME warned that privatization deals tend to lead to job or benefits cuts to workers.  Though the final contract guarantees that all city workers who pass a drug test and physical must be rehired by CH2M, the contract does not say what will happen to those workers in the following years. (During that April 3 meeting, multiple city workers accused the government of willfully underfunding the plant to create an excuse to privatize it.) …

North Miami Beach to Vote on Privatizing Its Water System Tomorrow Despite FBI Probe
Source: Jerry Iannelli, Miami New Times, May 15, 2017
 
On April 3, the City of North Miami Beach started negotiating with a global engineering firm to take over the city’s water utility, which services close to 200,000 people in north Dade. Clean-water activists vehemently opposed the move, citing research that water utilities run by private companies tend to get much more expensive over time, and typically provide services at “cheaper” rates by cutting staff or services. … But those facts have not mattered at all to North Miami Beach’s elected officials. Tomorrow, the city commission will vote on whether to hand the utility’s operations over to CH2M Hill Engineering for an annual fee of $18.8 million per year. (The city would retain ownership of the utility, but CH2M would handle the plant’s day-to-day operations. The city will also pay CH2M $19.3 million in the first year to cover startup costs.) …

North Miami Beach Moves Forward With Water-Privatization Deal Despite FBI Probe
Source: Jerry Iannelli, Miami New Times, April 4, 2017

At the beginning of North Miami Beach’s meeting last night about a plan to privatize its water system, City Manager Ana Garcia asked residents to trust the city based on the commission’s track record. That was an odd appeal, considering Mayor George Vallejo is the subject of an ongoing Miami-Dade County criminal probe and the FBI and Miami-Dade County Public Corruption unit have launched investigations into the water negotiations. Despite all of those red flags, commissioners voted 4-2 last night to move forward with the plan after a testy meeting that lasted close to three hours. … The city also did not disclose that an affiliate of the leading company bidding for the project, global engineering firm CH2M Hill, has held a temporary contract to operate portions of the plant since October 17, 2016. The contract raises additional questions as to whether the city’s bidding process has been fair. … The vote authorizes the city to begin negotiating a contract with CH2M, which is angling to take over the full operation of the city’s water plant.

… Per the terms of the city’s request for quotation, the private company is expected to take over full plant operations and take over the contracts of every employee at the utility. The American Federation of State, County and Municipal Employees (AFSCME), a union that represents the utility workers, says roughly 80 employees could be affected. The union warned last week that privatization deals tend to lead to benefit cutbacks and employee layoffs as the new company tries to cut costs. AFSCME does not have an active contract with the city, and union representatives warned last week that, without a contract, a private company could cut benefits and salaries from day one. …

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Judge rules Tennessee must release outsourcing records about Fall Creek Falls purchase

Source: Associated Press, June 29th, 2017

A judge has ruled in favor of a media group that sued the state of Tennessee to release records about its attempt to outsource services at Fall Creek Falls State Park. The Tennessee Coalition for Open Government says Davidson County Chancellor Bill Young on Tuesday ruled that the state must produce records to City Press Communications LLC, parent company of the Nashville Scene and the Nashville Post, and reporter Cari Wade Gervin. …

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Controversial state plan to outsource college jobs moves forward
Source: Adam Tamburin, The Tennessean, May 26, 2017

Tennessee moved forward with a controversial plan to outsource jobs at public colleges Friday when officials finalized a contract with a corporation that already handles a sizable amount of state business.  Under the contract, JLL — which currently manages about 10 percent of state facilities — will oversee the potential expansion of outsourcing at college campuses, state parks and prisons. It is a pivotal moment for the proposed expansion, which has been in the works for two years. …

Fall Creek Falls state park outsourcing push draws no bidders
Source: Associated Press, May 11, 2017
 
A push by Gov. Bill Haslam’s administration to outsource hospitality services at a Tennessee state park has drawn no bidders. Tennessee Department of Environment and Conservation spokeswoman Kim Schofinski says that no one bid on the proposal at Fall Creek Falls State Park, located on the Upper Cumberland Plateau in Van Buren and Bledsoe counties. TDEC planned to award the winning bidder $20 million to raze the park’s inn and build a new one. The Tennessee State Employees Association and park workers opposed it. …

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For Sale: Puerto Rico

Source: Heather Gillers, Wall Street Journal, June 26, 2017 

Puerto Rico has no cash and can’t borrow money anymore. So it is looking to sell itself off in parts. The troubled U.S. territory is preparing to seek bids in coming months from private companies willing to operate or improve seaports, regional airports, water meters, student housing, traffic-fine collections, parking spaces and a passenger ferry, according to a government presentation reviewed by The Wall Street Journal.

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The Bankers Behind Puerto Rico’s Debt Crisis
Source: Michelle Chen, The Nation, June 8, 2017
 
Puerto Rico’s economic crisis has now washed the burden of its colonial legacy onto Washington’s doorstep. Congress has been trying to contain the island’s ballooning debt under the hardline austerity program of the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA). But since the program is governed by a control board run by the same financiers responsible for driving the debt crisis in the first place, the island continues to sink into poverty while its creditors feast on the spoils.  To underscore how Puerto Rico’s revolving door of big finance and politics is underwriting the debt crisis, a report by the AFL-CIO and the community-labor coalition Committee for Better Banks (CBB) traces the career of the head of PROMESA, Carlos M. García, from his role as a head banker of Santander to his current political post overseeing the privatization and pillage of Puerto Rico’s anemic public assets.

Puerto Rico strikes second restructuring deal with bondholders
Source: Hazel Bradford, Pensions & Investments, May 15, 2017
 
Puerto Rico reached a restructuring agreement with bondholders invested in the commonwealth’s Government Development Bank, officials announced Monday in San Juan. … Puerto Rico’s Federal Affairs Administration said in that statement that GDB creditors “have agreed to substantial discounts to the principal,” but did not provide further details on the agreement, which calls for bondholders to exchange claims for one of three tranches of bonds issued by a new municipal entity. The new bonds will have varying principal amounts, interest rates, collateral priority, and other payment terms.  It is the second agreement reached with bondholders and Gov. Ricardo Rosello, following one announced April 6 with holders of bonds issued by the Puerto Rico Electric Power Authority. The PREPA agreement restructures $9 billion in debt by offering them 85 cents on the dollar, and giving PREPA more time to begin making payments. …

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Lexserv to Temporarily Shut Down While City Takes Over Service

Source: WTVQ, May 8, 2017

A temporary shutdown of the LEXserv online and phone bill payment system has been scheduled as Lexington’s Division of Revenue takes over the service from Greater Cincinnati Water Works. Beginning May 15, the city will manage all LEXserv customer service and billing services, eliminating the need for outsourcing. Officials say some of the many benefits include:

  • City will save taxpayer dollars by moving system in-house;
  • Customer service will be handled by LFUCG staff in Lexington, creating jobs;
  • Payments will be mailed to a Lexington address for processing;
  • New web portal for customers to make payments, review billing. …

Ohio State plans to privatize energy with largest investment in university history

Source: Owen Daugherty and Summer Cartwright, The Lantern, March 30, 2017
 
Ohio State has proposed a plan to receive its largest investment in the university’s history by selling its energy to the highest bidder. In accepting the unprecedented proposal, OSU will move forward in a public-private partnership with ENGIE, a French global energy producer and operator, who would control the energy used on campus for the next 50 years. The agreement, which is the first of its stature, includes the largest upfront payment — to the tune of $1.015 billion — between an American university and a global energy partner, OSU officials said. University officials said they ultimately chose the proposal from ENGIE-Axium because it offered the largest upfront payment of the three competitors, in turn committing the most money to the University’s endowment. This continues the trend of OSU privatizing its resources, which began with its CampusParc deal in 2012. The 50-year, $483 million deal was also the largest of its kind. …

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Ohio State CFO will recuse himself from decision in energy privatization plan
Source: Tom Knox, Columbus Business First, March 9, 2017

The chief financial officer at Ohio State University will recuse himself from deciding who will privatize the university’s energy operations. Geoff Chatas will help analyze the financial aspects of the deal but won’t know who the final candidates are – they’ll be masked to avoid the appearance of conflict of interest, said Ohio State President Michael Drake. … The CFO won’t have a say in who will run the university’s energy operations for 50 years because of a choice he made in 2015 when he accepted a job at the parent company of CampusParc, which in 2012 had negotiated a deal with university officials, including Chatas, to privatize OSU’s parking operations. The move raised questions of quid pro quo, which Chatas vehemently denied, but he soon reversed course and stayed at the university. … Ohio State expects to make a choice on energy privatization before the end of the school year. It’s a unique arrangement for a public university: a group of companies would for 50 years operate utility assets that make Ohio State run, including natural gas and chilled and heated water facilities. The winning bidder would have to meet sustainability goals sought by Ohio State. …

OSU moving toward privatizing its power system
Source: Laura A. Bischoff, Dayton Daily News, February 11, 2017

Ohio State University says it is taking the next step toward becoming the largest institution nationwide to hire private companies to manage its energy systems for decades to come. OSU Provost Bruce McPheron gave notice to staff and students on Thursday that the university will formally ask finalists to submit proposals for the massive project. The finalists in the running have not been disclosed. Ohio State administrators will determine by the end of the current semester whether to ask trustees to pull the trigger on it. The university is weighing whether to hire private contractors to take control of critical assets: the utility system that heats, cools and powers more than 400 buildings on main campus. OSU would receive an undetermined amoung of upfront cash and then agree to buy its energy from the vendor. The contractor would be responsible for making energy efficiency upgrades to cut OSU consumption by 25 percent within a decade. …

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Private water system in Haughton faces audit over billing complaints

Source: Melody Brumble, KTBS 3, March 17, 2017

A private water system in Haughton is in hot water over widespread billing complaints. Auditors will comb the books of Country Place Utilities after the Louisiana Public Service Commission decided to investigate the company. Country Place Utilities serves about 300 homes in Country Place subdivision in Haughton. The company provides water directly to residents and has a contract with the Bossier Parish Police Jury to bill for sewer service. … The PSC ordered the audit after residents complained that bills weren’t mailed for months at a time. Customers also complained of irregularities and discrepancies in usage and charges on bills; and the failure of the system’s staff to communicate with customers. Foster Campbell, the public service commissioner for north Louisiana, said the PSC also tried — without success — to resolve the situation by talking to the system’s operators. … The company could even lose the right to operate the water system, Campbell says. Country Place Utilities also is in hot water with the Bossier Parish Police Jury. In October, the police jury sued, claiming the company owes at least $60,000 in unpaid sewer fees. …

McComb Mayor Won’t Try to Privatize Public Works

Source: Associated Press, February 20, 2017

Pike County’s largest city won’t try to privatize its public works department. McComb Mayor Whitney Rawlings tells the Enterprise-Journal that he felt department heads weren’t ready to take the move. … An Alabama company, ClearWater solutions, pitched the idea to the city in January. The company runs public works departments and government utilities in several southern states. Some McComb officials said they were worried about whether employees would see cuts to retirement and other benefits if they became employees of ClearWater. …

Pueblo could follow Boulder’s municipalization lead

Source: Alex Burness, Daily Camera, February 15, 2017

… Pueblo City Council President Steve Nawrocki earlier this week suggested to his colleagues that the city explore possibly breaking free from the incumbent utility, Black Hills, to create its own municipal electric provider. … Boulder’s municipalization push has been attended by increasing controversy in recent months, but city officials have long maintained it’s a worthy pursuit because it’s important to demonstrate local initiative on climate action. Simply by trying to leave the incumbent Xcel Energy, they’ve claimed, the municipalization effort has helped encourage others around the state and country to also attempt to seize local control, then go greener and cheaper on a faster timeline than their incumbent would. … But Nawrocki thinks it’s Black Hills’ increasingly high rates that could make the proposal a success this time around. … The undertaking in Pueblo would be significant, as it has been in Boulder. Voters have the chance to revisit the city’s franchise agreement with Black Hills in 2020, but even with citizen support on Election Day, some officials there believe the city could spend up to about $1 billion buying out the incumbent. … That’s one big reason few have tried, and none have succeeded, in four decades in Colorado. It is possible, though. In this state, 29 towns and cities have their own electric utilities, and nationally there are more than 2,000 municipal electric systems. Many others — including Pueblo, evidently — are keeping close watch on the Boulder saga. …

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PUC wants more info on Boulder County group seeking access to municipalization case
Source: Erica Meltzer, The Daily Camera, August 12, 2015

The Colorado Public Utilities Commission wants to know more about who Leave BoCo Out represents before it decides whether the group can intervene as a party in Boulder’s efforts to take Xcel Energy’s local distribution system for a future municipal energy utility. … Leave BoCo Out is a Colorado nonprofit organization that claims to speak for residents of unincorporated Boulder County whose electrical distribution system Boulder seeks to acquire. Mike Dorsey, president of the group and a Gunbarrel resident, said he’s working with the organization’s attorney to comply with the request. He has emails from roughly 50 county residents supporting intervention. Two years ago, more than 2,000 Gunbarrel residents submitted letters or signed their names to group letters asking the PUC to prevent Boulder from making them customers of a potential municipal utility. … Xcel Energy has asked that Boulder’s request be dismissed because the city’s application doesn’t provide options or analysis that show how the two entities could separate and have their own facilities, and puts off until later too many of the important details.

Local groups seek to intervene in Boulder PUC case
Source: Erica Meltzer, The Daily Camera, August 10, 2015

A group representing Boulder County residents affected by Boulder’s plans for a municipal energy utility, a major mining concern, the University of Colorado and the Boulder Chamber of Commerce are among the entities seeking to formally intervene in the city’s municipalization case before the Colorado Public Utilities Commission. … Parties that filed a request to intervene are: Leave BoCo Out, the Boulder Chamber of Commerce, IBM, the University of Colorado, Climax Molybdenum Company, Poudre Valley Rural Electric Association and Tri-State Generation and Transmission Association. … Boulder spokeswoman Sarah Huntley said the city was surprised by the intervention of the Chamber and the university, but after speaking with representatives of both organizations, city officials are satisfied that the requests are motivated by a desire for more information, not opposition to the city’s plans. Many of the other entities frequently intervene in a variety of PUC cases. Huntley said the city has not made a decision about whether to oppose any of the requests, but the city is not generally opposed to outside groups having access to information.

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Lake Station floats water plant sale plan

Source: Carole Carlson, Post-Tribune, February 10, 2017

Crippled by debt that threatens its future, the city of Lake Station is considering the sale of its water treatment plant to Indiana America Water for $20.7 million. The sale, if approved by the Indiana Utility Regulatory Commission, would enable the city to pay off its debts and provide about a $9.5 million profit, Mayor Christopher Anderson said. The city has been in talks with Indiana American Water for about 14 months. The city council must approve the sale ordinance before the deal can move forward. … The sale would mean the approximate 2,900 residents, whose water comes from wells operated by the city’s utility plant, would begin receiving Lake Michigan water provided by Indiana American through its plant in Gary. … Anderson hopes the deal goes through so the city can begin to rebound from a $1.8 million general fund shortfall his administration inherited. Anderson said the city is staying afloat with temporary loans that are depleting other funds for general fund bills. …

Federal Barriers to Private Capital Investment in U.S. Infrastructure

Source: Robert Poole and Austill Stuart, Reason Foundation, January 26, 2017

The incoming Trump administration has proposed a $1 trillion program to foster private investment in aging public-sector infrastructure. Eligible projects would involve infrastructure that has, or could have, robust user-fee revenue streams. Large-scale public-private partnerships (P3s) would finance, redesign, rebuild and modernize, operate and maintain aging and/or under-sized airport, highway, seaport, water-supply and waste-treatment facilities. These projects would be financed via equity investment (20% to 30%) and long- term revenue bond financing (70% to 80%). Global infrastructure investment funds, U.S investment banks and large pension funds are eager to invest in such P3 projects in the United States. But to date, the opportunities to do such projects have been far greater in Asia, Australia, Canada, Europe and Latin America than here in the land of free enterprise. Part of this is due to the institutional inertia of many state and local governments that are slow to adopt new ways of doing business. But another major factor is federal obstacles to this kind of private capital investment in state and local infrastructure. … There is no lack of candidate projects. … This report identifies the principal federal barriers. …