Category Archives: Utilities

Opinion: Puerto Rico suffers amid disaster capitalism

Source: Amy Goodman and Denis Moynihan, Press Connects, November 5, 2017

There are people coming to the island, though: the disaster capitalists. As eloquently articulated by journalist Naomi Klein in her book “The Shock Doctrine: The Rise of Disaster Capitalism,” disasters both natural and human-made are increasingly being exploited by for-profit corporations and so-called free-market ideologues to reshape vast swaths of impacted societies, undermining social-welfare systems, privatizing public utilities, busting unions and making obscene profits rebuilding. Post-hurricane Puerto Rico is shaping up to be a textbook case of the shock doctrine.

… Case in point is the $300 million, no-bid contract awarded to Whitefish Energy to rebuild the island’s power grid. … As we spoke, news broke that Gov. Rossello had called for the cancellation of the contract. Jaramillo demanded not only that, but also the firing of the head of PREPA, who signed the contract, and a full criminal investigation into all those responsible for it. Like Mayor Cruz, Jaramillo is working to incorporate solar power into the rebuilt power grid, without privatizing the grid in the process. In the meantime, Fortune 500 Fluor Corp. has also received a $200 million contract to work on the power grid. As Whitefish eventually heads back to Montana, there are two things you can be sure of: More disaster capitalists will be lining up to take its place, and the proud, resilient population of Puerto Rico, growing intolerant of the delays and the corruption, will be increasingly vigilant, while building momentum for renewable alternatives to the fossil-fuel power grid that has failed them.

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The Puerto Rico Power Scandal Expands
Source: Vann R. Newkirk II, The Atlantic, November 3, 2017
 
A second federal contract with a company hired to rebuild Puerto Rico’s all but collapsed power grid is coming under scrutiny, drawing the attention of federal investigators and even members of Congress even as most of the hurricane-ravaged island remains without power. The news of a second faulty contract is also raising questions about the contracting process for the island’s government-owned power company, the  Puerto Rican Electric Power Authority (PREPA).  Puerto Rico’s crumbling, aging electrical grid was at the heart of the island’s crippling debt and infrastructure problems even before Hurricanes Irma and Maria slammed into it over a month ago. But now, in the wake of recent scandals over contractors hired to fix that very grid, some experts expect the timeline for full recovery to last well into next year. …

FBI Is Probing Puerto Rico Power Contract
Source: Andrew Scurria, Wall Street Journal, October 30, 2017
 
The Federal Bureau of Investigation is investigating a decision by Puerto Rico’s power authority to award a $300 million contract to a tiny Montana energy firm to rebuild electrical infrastructure damaged in Hurricane Maria, according to people familiar with the matter.  Agents from the FBI’s San Juan field office are looking into circumstances surrounding the deal that the public power monopoly known as Prepa signed with Whitefish Energy Holdings LLC, according to the people familiar with the matter.  Puerto Rico Gov. Ricardo Rosselló canceled the contract Sunday, saying it had become a distraction from the U.S. territory’s efforts to restore the devastated grid. Only 30% of the island’s power customers have had electricity restored. …

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Trump boosts disaster aid for Puerto Rico rebuild

Source: Roberta Rampton, Reuters, November 2, 2017
 
U.S. President Donald Trump on Thursday agreed to expand the use of disaster aid to help rebuild Puerto Rico’s power grid and other infrastructure wrecked by Hurricane Maria, the White House said. In a unique agreement recognizing both the massive devastation on the island and its dire financial problems, aid from the Federal Emergency Management Agency (FEMA) for infrastructure projects will be released in a faster, more flexible way than is typical after disasters, a senior White House official told Reuters.  The plan, agreed to with Puerto Rico Governor Ricardo Rossello, will also provide for third-party advisers to estimate how much money is requires for big-ticket projects, and how it is spent – a provision aimed at protecting taxpayer dollars in what is expected to be a massive, long-term effort to rebuild the island. …

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Puerto Rico Lays Out Energy Future With Tesla, Privatization
Source: Jonathan Levin, Bloomberg, October 22, 2017

A Puerto Rican official who has been in talks with Tesla Inc. said the island is serious about transforming its energy infrastructure after it was leveled by Category 4 Hurricane Maria, despite questions about how such an overhaul would be funded.  Speaking in a telephone interview Sunday, Department of Economic Development and Commerce Secretary Manuel Laboy said Puerto Rico’s government understands its skeptics: The island’s finances are shot and its electricity system is in tatters. But he said the U.S. territory has a historic opportunity to use federal funds to modernize an aging and weak power grid.  At the core of the argument is the government’s belief that funding related to the Federal Emergency Management Agency, or FEMA, can be used to build a new system, not just repair the old one, so that it won’t be susceptible to collapse when the next storm hits. Laboy said Governor Ricardo Rossello’s government is prepared to make its case. …

Puerto Rico taps public private partnerships to boost economy
Source: Robert Slavin, Bond Buyer, October 19 2017

…The island government said Monday that it’s working on six public private partnership projects that would lead to $300 million to $400 million of investment in projects ranging from a hydroelectric dam to student housing.  Puerto Rico will seek requests for qualifications for three of the projects and it is already working with companies on the other three. If the projects go forward, they would boost an economy that has been struggling with long-term economic decline compounded by the impacts of two major hurricanes in the last two months….

Elon Musk Is Not the Hero Puerto Rico Needs
Source: Kate Aronoff, In These Times, October 11, 2017

… According to a tweet from the governor late last week, the two are now in talks about bringing renewable energy from Musk’s Tesla and SolarCity operations to the island, whose long-embattled public utility—the Puerto Rico Electric Power Authority (PREPA)—was decimated by Hurricane Maria. … On the one hand, the talks can be seen as a positive development: More than 80 percent of the island remains without power, and the storm could be a once-in-a-lifetime opportunity for Puerto Rico to get back online and become a leader in the transition away from fossil fuels. But the budding friendship between Rossello and Musk is also taking place in the context of a massive attempt to privatize Puerto Rico’s electric utility. Musk’s companies could deliver tangible improvements to Puerto Rico’s grid, but they could also prime the pump for a corporate takeover of the United States’ largest public power provider, putting decisions like who gets power and how much it costs into the hands of corporate shareholders. …

Puerto Rico Faces Restart on Financial Plan After Maria
Source: Heather Gillers and Andrew Scurria, Wall Street Journal, September 26, 2017

It took months to put together a financial overhaul plan for Puerto Rico. Now officials may have to start over following Hurricane Maria. The federal board supervising Puerto Rico’s bankruptcy plans to meet Friday and is likely to discuss possible changes to a commonwealth fiscal plan it approved in March, according to a person familiar with the matter. The conversations could affect the severity of write downs on Puerto Rico’s $73 billion in debt.

… Reconstructing Puerto Rico’s power grid may prove particularly costly because of financial difficulties at its struggling electric utility. … Congress is starting to debate how best to rebuild Prepa. Setting up a reliable power system will require expensive modernization using federal dollars. Prepa is a flashpoint in Puerto Rico’s financial crisis because power rates are a drag on family incomes and company budgets. The oversight board has said it wants to privatize power generation to lower costs and transition Prepa to a regulated utility model. Creditors are skeptical of privatization, concerned that by selling off assets Prepa would lose the revenue streams backing its debt. But raising power rates to repay creditors is politically toxic in Puerto Rico, where the cost of importing fuel from oil tankers has driven power prices higher than in any U.S. state but Hawaii. …

Puerto Rico’s bondholders worried after Hurricane Maria turns out lights
Source: Francine McKenna, MarketWatch, September 21, 2017

If Puerto Rico is without power for months after Hurricane Maria, as authorities now warn, many investors in the $9 billion of Puerto Rico’s outstanding electric utility bonds risk never seeing their money. … The plight of Prepa bondholders—Prepa is Puerto Rico’s main supplier of electricity—was grim even before Irma. … Prepa’s bonds, $9 billion worth, are revenue bonds whose funding stream is based on collecting customer fees. Even before Hurricane Maria knocked power out for good, bondholders were worried that Prepa would deliberately force some plants offline, jeopardizing the collateral, creating justification for a privatization plan that could leave current bondholders high and dry. Proponents argue that a brand new electric authority, free of debt, would be a huge boon to the Puerto Rican economy. …

Hurricane Irma Unleashes the Forces of Privatization in Puerto Rico
Source: Kate Aronoff, Angel Manuel Soto, and Averie Timm, The Intercept, September 12, 2017

For struggling governments around the world, privatizing utilities has come to be seen as a kind of get-rich-quick scheme, offering an upfront infusion of cash to underfunded municipalities. Given Prepa’s size and that of its debt — $9 billion — it has been a long-standing target for privatizers, even before Congress passed the Puerto Rico Oversight, Management, and Economic Stability Act last year to help rein in Puerto Rico’s mounting debt crisis. The blackout following Irma just added fuel to the fire. Days before Irma hit, Rosselló emphasized that privatization is firmly on the table, telling the New York Times that Irma “can become an opportunity or another liability.” …

Irma Grazes Puerto Rico but Lays Bare an Infrastructure Problem
Source: Luis Ferré-Sadurní, New York Times, September 10, 2017

As government workers cleared roads obstructed by uprooted trees and repaired toppled electricity lines, residents of Puerto Rico felt some relief that the eye wall of Hurricane Irma had skirted the island on its recent rampage through the Caribbean.  But while the commonwealth had largely been spared the 185-mile-an-hour gusts that had flattened its smaller island neighbors, hundreds of residents still lost their homes, at least three people died and almost 70 percent of households were plunged into darkness. The storm knocked out Puerto Rico’s fragile power grid, exposing the island’s decrepit infrastructure and raising questions about its future viability amid a worsening economic crisis.

… How a commonwealth going through a decade-long recession will be able to pay for much-needed upgrades is the key question. One option is to turn to the private sector, local economists say. Private investments, Mr. Rosselló said, could be accelerated under a provision of a contentious new law called Promesa, which placed the island’s finances under the oversight of a federal board. The provision could expedite and facilitate the process for private investment in electric, highway and water projects. … But the idea of privatizing public utilities is a divisive one on the island. The electrical workers’ union fears that the government purposely let Prepa deteriorate over time to justify privatizing it. …

Puerto Rico wasn’t ready for Hurricane Irma. We couldn’t possibly be.
Source: Carla Minet, Washington Post, September 7, 2017

On the surface, Puerto Rico was as ready as it could be for Hurricane Irma. Government agencies and Gov. Ricardo Rosselló have been taking a proactive, hands-on approach. President Trump has declared a state of emergency, which will generate emergency funds from the federal government. Refugees from the northeastern corner of the island, where Irma’s Category 5 winds already reached Wednesday afternoon, were arriving in shelters. … But Irma — a storm the likes of which we haven’t seen here in decades — is heading for an island whose resources to truly prepare for an emergency are already in grave doubt. … Now Irma may be used as a new rationale for the strategy of privatizing the public service by the Fiscal Control Board, whose members have publicly declared support for selling off the utility. The agency announced that 44 percent of the population — 692,350 clients — were already without electricity service by Wednesday afternoon. …

Government labor strife is latest test for fractured Puerto Rico
Source: Nick Brown, Reuters, August 30, 2017

Puerto Rico’s already frail economy faces a fresh test this week, as the bankrupt U.S. territory’s financial overseers try to force a defiant governor to furlough public workers, the single biggest block of employees on the island. An escalating power struggle between the democratically elected Governor Ricardo Rossello and the federally appointed oversight panel culminated on Monday when the board sued Rossello, saying he had no authority to reject pension cuts and furloughs ordered by the board. The measures are set to begin Sept 1. A competing lawsuit from the American Federation of State, County and Municipal Employees (AFSCME), which represents 12,000 Puerto Rican workers, argues the exact opposite – that the measures violate the U.S. Constitution, and should be halted. At least six unions are staging protests on Wednesday to oppose the austerity, featuring a midday march to the board’s San Juan offices. … Noting a Rossello initiative to privatize some public assets, Eiler said “the unions’ cooperation is imperative” for public-private partnerships. …

Hedge Fund Sues to Have Puerto Rico’s Bankruptcy Case Thrown Out
Source: Mary Williams Walsh, New York Times, August 7, 2017

A hedge fund sued on Monday to have Puerto Rico’s bankruptcy case thrown out, arguing that the federal oversight board guiding the island’s financial affairs was unconstitutionally established.  In a lawsuit filed in United States District Court in San Juan, the hedge fund, Aurelius Capital, cited the “appointments clause” of the United States Constitution, which calls for all principal officers of the federal government to be appointed by the president, and then confirmed by the Senate.  That did not happen when the seven members of the Financial Oversight and Management Board for Puerto Rico were selected, Aurelius said in its motion to dismiss the bankruptcy-like proceedings. …

Puerto Rico Teachers’ Union-AFT Join Forces Amid Debt Woes
Source: Jaclyn Diaz, Daily Labor Report, August 4, 2017 (subscription required)

The economic devastation in Puerto Rico has pushed the American Federation of Teachers to lend a hand to the island’s educators. Asociación de Maestros de Puerto Rico will continue to represent the 40,000 plus Puerto Rican educators. It signed a three-year affiliation agreement with the 1.6 million-member AFT to help it combat the island’s economic challenges, the two unions announced Aug. 3. … AFT and AMPR will work together to fight austerity measures and privatization on the island, Randi Weingarten, AFT president, told Bloomberg BNA Aug. 4. AFT will lend resources to help AMPR train teachers for the future and to bring in legal assistance to fight the fiscal plan adopted by the Puerto Rican government, she said. …

Is Congress’ plan to save Puerto Rico working?
Source: Edwin Melendez, San Francisco Chronicle, July 31, 2017

A year ago, Congress cobbled together a plan to try to save Puerto Rico from its US$123 billion debt and pension crisis without costing American taxpayers a penny.  The law, signed by former President Barack Obama on June 30, 2016, effectively steered Puerto Rico into bankruptcy-like proceedings in federal court to prevent a massive default, while saddling the commmonwealth with an oversight board to ensure it put its fiscal house in order.  Though the vote was bipartisan, critics called it a “Band-Aid” that would do little to solve Puerto Rico’s core problems: unsustainable debt that has kept the country mired in recession for almost a dozen years. …

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.

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. …

Puerto Rico board extends budget deadline by two weeks
Source: Robert Slavin, Bond Buyer, May 9, 2017 (Subscription Required)

The Puerto Rico Oversight Board extended the deadline for Puerto Rico Gov. Ricardo Rosselló to submit a fiscal year 2018 budget by two weeks.  Board chairman José Carrión III told Rosselló that the board had originally set May 8 as the deadline for either the board approving the governor’s budget or notifying the governor of violations and providing a description of corrective actions. “We have received a working draft of the proposed budget and are reviewing the submission and its completeness,” Carrión wrote Monday. “The board will provide the governor an additional 14 days to amend and improve the submission before it approves it or identifies violations.” …

Puerto Rico unveils energy PPPs amid economic turmoil
Source: David Casallas, BNamericas, May 5, 2017

Puerto Rico’s embattled government released a list of priority project proposals for this year, among them energy sector initiatives that would be carried out through public-private partnerships (PPP). The projects envision natural gas use at power utility AEE’s residual fuel oil fired-plants Costa Sur (990MW) and Palo Seco (602MW) which would cost US$150mn-265mn and US$200mn-360mn, respectively. Information from the Puerto Rico Public-Private Partnerships Authority also reveals that AEE seeks partners to develop renewable energy projects, including photovoltaic and wind, for between US$100mn and US$700mn. …

Puerto Rico Declares a Form of Bankruptcy
Source: Mary Williams Walsh, New York Times, May 3, 2017

With its creditors at its heels and its coffers depleted, Puerto Rico sought what is essentially bankruptcy relief in federal court on Wednesday, the first time in history that an American state or territory had taken the extraordinary measure.  The action sent Puerto Rico, whose approximately $123 billion in debt and pension obligations far exceeds the $18 billion bankruptcy filed by Detroit in 2013, to uncharted ground.  While the court proceedings could eventually make the island solvent for the first time in decades, the more immediate repercussions will likely be grim: Government workers will forgo pension money, public health and infrastructure projects will go wanting, and the “brain drain” the island has been suffering as professionals move to the mainland could intensify. …

Puerto Rico faces bank closure, privatizations
Source: Danica Coto, Associated Press, April 28, 2017

Puerto Ricans will be facing a water rate increase, privatization of government operations and the closure of a bank that once oversaw the island’s debt transactions, officials said Friday as they worked on measures to offset an economic crisis.  Some of the changes were outlined in new fiscal plans presented to a federal control board overseeing the island’s finances. The plans for four heavily indebted Puerto Rico agencies will be amended in upcoming weeks, although officials noted that the water rate increase will start in January and that the Government Development Bank will be liquidated within a decade.  The board recently approved an overall fiscal plan for the central government that contains several austerity measures. …

Puerto Rico pushes to privatize operation of public services
Source: Danica Coto, Associated Press, April 20, 2017

Puerto Rico is ready to sign dozens of new deals to privatize the operation of public services as government funds dwindle amid a decade-long recession, the island’s governor told some 800 investors attending a two-day financial summit Thursday.  Gov. Ricardo Rossello said public-private partnerships could create up to 100,000 new jobs and generate some $5 billion in the next three years for a U.S. territory mired in economic crisis and its government facing a $70 billion public debt load that it is struggling to restructure.

AFSCME Pres. Lee Saunders on Puerto Rico Fiscal Plan
Source: AFSCME Press Release, March 13, 2017

AFSCME Pres. Lee Saunders issued the following statement on the oversight board’s approval of a fiscal plan for Puerto Rico:  “The plan approved by the Oversight Board will have devastating consequences for the people of Puerto Rico, especially its most vulnerable citizens. The plan adopts an austerity approach that will slash services, cut pensions and create yet more economic hardship for Puerto Ricans. The winners are wealthy investors who stand to gain from the mass privatization of the services that remain. These actions are the foreseeable result of an anti-democratic law adopted by the last Congress. The people of Puerto Rico have been forgotten; we call on the federal government to act quickly to restore services and pensions.”

Board to Puerto Rico: Cut Pension System, Impose Furloughs
Source: Danica Coto, Associated Press, March 13, 2017

A federal control board on Monday said Puerto Rico’s government needs to cut its public pension system by 10 percent, furlough tens of thousands of its workers and eliminate Christmas bonuses if it cannot generate other types of savings amid a nearly decade-long recession. The seven-member board created by Congress last year to oversee the U.S. territory’s finances voted unanimously to add those measures to a 10-year fiscal plan presented by the island’s governor that the panel approved Monday. The measures will be implemented if the government fails to find other ways to cut spending and increase revenue. Board members said the spending cuts will be necessary so the government will have enough funds to pay for essential services such as education, health and public safety. … The plan drafted by the government and approved by the board also will cap some Medicaid benefits, effectively raise property taxes and scrap some infrastructure projects while possibly turning ferries, ports and parking lots over to private companies. It will freeze salaries until 2020, seeks to privatize the generation of power and increase motor vehicle license fees by 10 percent. …

Puerto Rico governor wants fewer austerity measures
Source: Danica Coto, Associated Press, March 1, 2017

Puerto Rico’s governor submitted an austerity plan made public on Wednesday that would cut deeply into the U.S. territory’s budget while avoiding some of the most painful measures recommended by a federal control board that is overseeing the island’s effort to confront a debt crisis that has led to repeated defaults. Gov. Ricardo Rossello’s plan would cap some Medicaid benefits, effectively raise property taxes and collect a tax on internet purchases. It would also scrap some infrastructure projects and could turn ferries, ports and parking lots over to private companies. But it would fall short of the board’s recommendation of a 30 percent cut in payroll costs and 10 percent reduction in the government pension system, which is on track to run out of money next year. …

Council urges Univ. of Memphis to decline state outsourcing contract

Source: Michelle Corbet, Memphis Business Journal, September 20, 2017

With the University of Memphis’ next Board of Trustees meeting set for early October, members of the Memphis City Council are asking that the group think twice before opting into the state’s facilities management contract. It’s no secret the University of Memphis plans to opt into the state’s property management contract, said Councilman Martavius Jones, who sponsored a resolution Sept. 19 urging local universities and their administrators to do the opposite. In May, the State of Tennessee entered into a contract with Chicago-based JLL to privatize maintenance, security, janitorial and landscaping services for state-owned public colleges and universities. “Based on my experience on the school board, the quality of the service, the cleanliness and the general morale suffered [when outsourced],” said Jones, who served on the Memphis City Schools Board from 2006 to 2013. …

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Does Outsourcing Some State Jobs Save TN Taxpayers Money?
Source: Local Memphis, August 31, 2017
 
Many Tennessee lawmakers hope to see if outsourcing some state jobs actually saves taxpayers money. It’s been a controversial topic since Governor Bill Haslam began implementing the idea a few years ago.  Questions about outsourcing are always the same. Does it save money and is there accountability?  “There’s… people concerned about state jobs all over Tennessee,” said one protester.  Many state lawmakers have heard and seen the protests about the ongoing outsourcing of state jobs. That’s why a majority of legislators from both parties signed a letter of concern earlier this year to Governor Haslam. The Governor has defended outsourcing state jobs in some areas, especially on state college campuses. …

UT campus workers protest Gov. Haslam’s outsourcing plan
Source: WBIR, August 28, 2017

University of Tennessee Knoxville staff, faculty and students joined local business leaders, state representatives and faith leaders in a demonstration Monday to call on university officials to “opt-out” of Gov. Bill Haslam’s outsourcing plan. The demonstration was organized by United Campus Workers. Last week, a bill to introduce oversight in outsourcing was heard in summer study in the General Assembly. If the university were to “opt-in”, United Campus Workers believe as many as 10,000 facilities jobs, including hundreds in Knoxville, would be outsourced. Those who oppose the plan fear it will result in job loss, loss of oversight and accountability, reduced services and negative consequences for local businesses which provide services to campuses. …

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Report: Gov. Henry McMaster considering Santee Cooper sale to help pay for nuclear project

Source: David Wren, The Post and Courier, August 8, 2017

Gov. Henry McMaster is reportedly considering selling state-owned electric utility Santee Cooper as a way to pay for at least one of two nuclear reactors at the V.C. Summer Nuclear Station near Jenkinsville. The Wall Street Journal reported Monday that McMaster is “pursuing several options” to raise the money needed to finish the project, which Santee Cooper and South Carolina Electric & Gas abandoned last week in the face of rising costs and the bankruptcy of lead contractor Westinghouse Electric. …

Congress must continue to block Trump plan to sell BPA

Source: Union-Bulletin Editorial Board, August 8, 2017

Late last month the U.S. House Budget Committee approved a budget resolution that rejects privatizing the transmission assets of the Bonneville Power Administration proposed by the Trump administration. A great move. The sooner this lousy proposal is dead the better it will be for Pacific Northwest residents who pay power bills — pretty much all of us. … President Donald Trump is calling for turning over the transmission network of power lines and substations owned by the Bonneville Power Administration, a federal agency that distributes most of hydropower from the Columbia and Snake rivers’ dams, to private companies. As Trump sees it, this would lower costs to taxpayers and improve efficiency. But in reality it would result in far higher rates for consumers. And putting the high-voltage grid in the hands of private investors — perhaps foreign investors — would create national security concerns. …

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Down the Mighty Columbia River, Where a Power Struggle Looms
Source: Kirk Johnson, New York Times, July 28, 2017

To ride down the Columbia River as the John Day Dam’s wall of concrete slowly fills the view from a tugboat is to see what the country’s largest network of energy-producing dams created through five decades of 20th-century ambition, investment and hubris. … Now, the Trump administration has proposed rethinking the entire system, with a plan to sell the transmission network of wires and substations owned by the Bonneville Power Administration, a federal agency that distributes most of the Columbia basin’s output, to private buyers. The idea is part of a package of proposals that would transform much of the infrastructure in the United States to a mixture of public and private partnerships, lowering costs to taxpayers and improving efficiency, administration officials said. Assets of two other big public power operators, based in Colorado and Oklahoma, would be sold, too, if Congress approves the measure.

Debates about government and its role in land and environmental policy are always highly charged. But perhaps nowhere could the proposed changes have a more significant impact than along the great river of the West — fourth largest by volume in North America, more than 10 times that of the Hudson. Privatization would transform a government service that requires equal standards across a vast territory — from large cities to tiny hamlets — into a private operation seeking maximum returns to investors. …

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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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. …