CP&L shares 'the rest of the story'

Editor:

First of all let me say thank you to the Saratoga Sun for the opportunity to review and address the comments made by Mayor Zeiger in his letter to the editor included in this week’s edition of the paper. After reading Mr. Zeiger’s comments and as I began writing my response, a quote from the late Paul Harvey kept coming to mind…something about “The rest of the story”. For the most part, the statements made by Mr. Zeiger in his effort to justify the Town of Saratoga’s (Town) need to charge Carbon Power and Light (Carbon) a franchise fee have some truth to them. Unfortunately…there is actually more to the story.

Yes, Carbon does pay the City of Laramie a 5% franchise fee for the 6 Member-Owners that we serve within the city limits. In 2005, the City of Laramie annexed a portion of Carbon’s service area. Carbon’s power lines extended through that annexed area serving those Member-Owners and then go on to serve our rural Member-Owners beyond that area. For the investor-owned utility serving Laramie, to serve those accounts in the annexed area, a duplication of power lines would have been required. Carbon asked for and was granted a franchise agreement to serve those accounts and because the investor-owned utility serving Laramie is currently paying a franchise fee, Carbon was required to do so as well. Because of the minimal amount of the collected franchise fees (a little over $900 in 2013) Carbon chose to absorb those fees.

If the Town moves forward with charging Carbon the franchise fee, the Mayor points out in his letter that Carbon will pass this fee on to its Member-Owners within the corporate limits of the Town and this is true. However, the $7.00 per month increase that the Mayor referred to and seems to want to trivialize “as to what most of our Member-Owners would experience” was taken from an example in my April 24th letter to the Town, in which I pointed out what an account using 1000 kWh would see. Although some of you might use less than that amount…many of you use considerably more kWh’s…especially our local businesses. If you wish to know what you will pay under s the Town’s proposed fee amount of four percent (4%), simply add that percentage to your bill for kilowatt-hour usage and the facility charge amount to your monthly bill.

Going on…yes, there are not-for-profit Electric Co-ops in Wyoming that are charged franchise fees. Of those few that do, two of the largest in size and revenue absorb a small portion of those fees while the others, pass those fees on to the Member-Owners within the town. As we have already pointed out to the Mayor and the Council…yes, Carbon is a not-for-profit Co-op but, that is not really the point Carbon has tried to make. Being a Rural Electric Cooperative…the people we serve within the city limits are actually “Members and Owners” of the Co-op…why would they want to tax themselves? For 70 years, the Mayor and Council’s predecessors have been able to grasp this concept…what has changed?

I’m really not sure where the Mayor was going with his reference to Carbon’s $27 and $35 facility charge in his letter, so I won’t address that. I do however; question his comment regarding the Wyoming Public Service Commission encouraging municipalities to charge fees to all utilities…why would they say that…especially when it causes an expense to consumers? Regarding this, I have requested that Carbon’s legal counsel address this comment with the Commission.

As the Mayor points out in his letter, in his attempt to bolster the need for the franchise fee, Carbon collected $2.8 million from its Member-Owners within the town of Saratoga…that certainly sounds like a lot doesn’t it? For clarification, that is in fact Carbon’s gross yearly revenue for 2013 for the accounts in Saratoga. That $2.8 million dollar amount is what the franchise fee would have been based on had it been in place during that period. As I previously stated, this was the gross revenue received. However, after paying our wholesale power bill and other expenses…Carbon’s actual net operating revenue collected from the Member-Owners in Saratoga was approximately $83,000. You will note that Carbon’s net operating revenue based on 2013 would have been below what the Mayor calculated for his franchise fee amount ($100,000).

Although I take exception with portions of the Mayors letter, the section of his letter that caused me the most concern was his accusation that Carbon had cost the Town approximately $40,000 and possibly up to $46,000 in damages to the Town’s equipment at the well site north of Saratoga…due to so called power surges during two outages at that location. If in fact this accusation were to be true and based on the size of the monetary amount associated with his accusation…wouldn’t the Town have addressed this prior to the Mayor trying to justify his franchise fee? In fact, after the first storm related outage at that location back in May of 2009, Carbon offered to complete voltage checks (which we do free of charge) at that site in the event that the Town was experiencing a problem. During the most recent storm related outage which occurred on Sunday, February 16, 2014, Carbon wasn’t even contacted by the Town’s electrical contractor until the following Tuesday, February 18th. Based on the type of critical equipment that the Town has installed at the well site, the Town either has in place or should have in place protective devices installed to prevent damage to their equipment in the event that Carbon has an outage. Did this equipment not function properly?

In closing, Carbon understands that Wyoming law allows Municipalities to charge any utility a franchise fee. They can do this even to Carbon’s Member-Owners in Saratoga…without a vote…even though those same Members are owners of the Co-op that serves them. If the Ordinance (Franchise Agreement) is passed with the proposed fee amount, Carbon will have no choice but to collect this fee from those of you residing within the corporate limits of Saratoga.

As Member-Owners of Carbon you have a voice, I would hope that would hold true with the Mayor and the Town Council as well.

Chuck Larsen

General Manager,

Carbon Power and Light.