Tennergy On the Move

Tennergy has restarted the task of inticing other West Tennessee Utilities into there web in an attempt to enlarge its market and its influence.

In March of last year Ripley Power & Light began petitioning the Board of Mayor & Aldermen to pass a resolution to form the Ripley Energy Authority. Their purpose as stated is to provide electric and broadband services. Which a great number of us found strange since it was obvious that Ripley Power & Light already provides its ratepayers with electricity and broadband could be provided without forming an energy authority.

A public hearing on the matter was scheduled for April of 2009. Power and Light was anxious in pushing this through before the session ends in Nashville.

So confident of success they were someone developed the Private Act prior to all of the following… and it looked just like the one that was created for JEA, indeed the same attorney wrote the both. Can you imagine the odds!

On April 27th, 2009

SB3956 was not listed on any Senate calendar agenda for May 27. However Senator Mark Norris called it up out of order and moved to suspend the rules for immediate consideration of the Ripley Energy Authority Act. The reason for immediate consideration was to allow adequate time for the referendum question to appear on the August ballot as scheduled in the act. The House Bill was substituted for the companion Senate Bill and the senate passed HB3997 on third and final consideration (32 to 0). Both bodies have now passed the Ripley Energy Authority Act subject to approval by city-wide referendum.Â

  • If everything goes as planned by Ripley Power & Light the following question will appear on the August ballot:
  • approving a Private Act to create an Energy Authority on behalf of the City of Ripley and Ripley Power and Light Company.
  • does not approve a Private Act to create an Energy Authority on behalf of the City of Ripley and Ripley Power and Light Company.
  • A vote will authorize the creation of the Ripley Energy Authority and therefore the transfer of the assets of Ripley Power and Light Company to the Ripley Energy Authority.
  • A vote “AGAINST” does not authorize the creation of the Ripley Energy Authority and therefore keeps Ripley Power and Light Company as a department of the City of Ripley.

Notes from a friend in Ripley; Last night’s public hearing was a repeat of the previous hearing with less people in attendance.  The same questions were asked and the same responses were received. The superintendent of power & light insists that there is no plan at this time to participate in telecommunications and no joint ventures under consideration. He had no information to report concerning JEA’s, Brownsville’s or Bolivar’s joint ventures. According to him, the Power Board’s primary reason for forming an energy authority is to be ready to participate if a favorable joint venture presents itself. As always, he had a lot to say but told us next to nothing.

April 30th, 2009

My friend in Ripleyjust talked with Mayor Pavletic. It appears that resistence is gaining ground. Apparently the aldermen are getting a lot of phone calls from residents and they received Dr. Rizzuto’s Report and The Leaf Chronicle articles sooner that I expected.  Aldermen Hendren and Shelby are now questioning the feasibility of forming an energy authority.

As of this date the proposal is not on the agenda. The mayor said “If they force a vote Monday night, they’ll lose”. If another public hearing is scheduled, both the mayor and I will be most grateful if you would attend the public hearing and field question from the audience.

The City Board will meet on May 4th. They will at that time decided to vote on the authority or schedule another public hearing.

May 4th, 2009

Opposition the the oppose Authority release the following ad.

WAS TENNERGY A DISINTERESTED PARTY?

Alderman Shelby wants to consolidate our utility systems and keeps harping on a recommendation contained in the Tennergy Report. I assume he knows that Tennergy is an energy acquisition corporation established to manage the purchase, transmission and storage of energy, and that the author of the report was Jackie Cruse, Vice President of The Tennergy Corporation. I am not convinced that an officer of an energy acquisition corporation working as a consultant for a potential energy client can be considered a disinterested party capable of issuing an unbiased report. I know that during his temporary management of the gas department Mr. Cruse requested that Tennergy be allowed to hedge gas for Ripley. I also know that Mr. Cruse knew, before he was hired, that Mayor Richard Douglas and the Board of Directors of Ripley Power & Light were extremelyanxious to merge the Ripley utility departments with Mike Allmand managing the combined system. Their plan is documented in an employment agreement dated April 5, 2001.

On June 27, 2001, from his hospital bed, Cecil Hutchison signed a letter of resignation from the gas, water and sewer department. The very next day Mayor Douglas met with the Gas Board and suggested hiring a consulting firm to evaluate Ripley utilities and manage the gas and water department on a temporary basis. Mayor Douglas met with the Gas Board again on July 9. He introduced Jackie Cruse and discussed the possibility of merging with Ripley Power & Light. The board hired Mr. Cruse. The Tennergy Report was dated October 3, 2001; as was planned, discussed and expected, consolidation was recommended. On October 11, 2001, 1:00 P.M., the Power Board met and approved consolidation. On October 11, 2001, 5:00 P.M., the Gas Board met, as was planned and expected, Mike Allmand was hired. On that same day Mr. Allmand requested and received approval to hire Tennergy and other consultants as needed. On June 25, 2002, the Gas Board moved to allowed Mr. Allmand to work with Tennergy for the purchase of gas. On February 13, 2003, the Power Board approved the purchase of 15,000 shares of Tennergy Partners, LLC” Utilicorp at a cost of $225,000. (The comptroller’s office has written at least two letters questioning the investment of public funds in that limited liability corporation.)Â

Now, the question is:

Was Tennergy a disinterested party? I cannot state as fact that Mr. Cruse’s recommendation to consolidate was influenced by his knowledge of the merger proposed by Richard Douglas and the Power Board. Nor can I state as fact that Mr. Cruse’s recommendation was influenced by a conflict of interest created by #1) his desire to add the Ripley Gas Department to Tennergy’s roster of energy clients and/or #2) the possibility that Ripley Power & Light might invest in Tennergy Partners LLC. However, there is room for reasonable doubt. Tennergy had nothing to lose by cooperating with the mayor and the Power Board, but the potential for gain was substantial. For that reason, unlike Mr. Shelby, I cannot with any degree of confidence rely on Tennergy’s recommendation.

Mr. Shelby also relies on the MTAS Report. The Municipal Technical Advisory Service was established by the Tennessee General Assembly in 1949 and is funded by a direct state appropriation and a portion of the local statewide sales tax. Services rendered to municipalities are usually free and the employees certainly qualify as disinterested parties. The MTAS consultants had a clear understanding of our management problems including long-term employment contracts and exorbitant salary scale. However, in some areas the picture shown to MTAS was distorted. For example, some employees were afraid to express negative comments because they feared loss of employment; it was noted that the accounting system was approved by TVA, but the TVA approved Joint Use Study was not mentioned. I am therefore led to believe that MTAS did not have access to that critical piece of information. Had that document been available, I believe MTAS would agree that consolidation governed by the TVA approved Joint Use Study, as interpreted and implemented by Ripley Power & Light, was detrimental to the rate payers of the gas, water & wastewater department and that continued consolidation would have worsened an already bad situation. Before reconsolidation becomes anything more than an embryo in his mind, Alderman Shelby must address the problems concerning the allocation of shared expenses.

Mr. Shelby has criticized the former administration for failure to heed the recommendation of consultants. Is his criticism without merit? I think most gas, water and wastewater consumers will, in a loud and collective voice, answer “YES”.

May 5th, 2009

Mike Allmand(President and CEO of power & light) and the Power Board knew that they did not have the …” majority necessary to pass the resolution forming the energy authority. Alderwoman Lague who is also a member of the Power Board made a motion to extend the timeframe for voting on the resolution. The motion passed 4 to 3. The timeframe is any time between now and January 2010. They’re missing this session of the General Assembly, but they’re not done yet.

From my conversations with some of the opposition in Ripley, Mr. Allmand and several aldermen “were” launching an attempt to consolidate Ripley Power & Light with Ripley Gas, Water & Wastewater. They continued to rely on the flawed 2001 Tennergy report wherein Jackie Cruse recommended consolidation.

This had been tried before under the leadership of Mike Allmand and by all accounts it turned out badly. Ripley finally abolished the Gas Board and terminated Mr. Allmand’s part time employment with the gas, water and wastewater department. Allmand then sued the city for breach of his employment contracts. Mr. Allmand worked for power & light for more than 30 years.

In October 2001 after the Tennergy Report was issued, he was hired by the Gas Board to manage the gas, water & wastewater department. He immediately began consolidating the two utilities. In July 2003 the City Board voted against merging the Gas Board with the Power Board which stopped the final step in Allmand’s consolidation effort. By this time his 2001 employment contract was public knowledge (discovered during a 2003 comptroller audit).

The voters were appalled. So much so that Allmand feared that his father-in-law, Mayor Richard Douglas, and Alderman Billy Poston were going to lose the April 2004 city election. He then sought to protect his jobs:

In October 2003 he negotiated his first employment contract (8 years) with the Gas Board. In December 2003 he renegotiated his 2001 seven-year employment contract with the Power Board.The new contract was for 14 years. Douglas and Poston (Poston was chairman of the Power Board and signed the 2001 and 2003 contracts) lost the election. In November 2005 the new administration terminated Allmand’s employment with the gas department. He then filed suit for $6 million. August 4th, 2009

Power and Light started using their website to support the Energy Authority Plan.

October, 2009

Ripley Power & Light serves about 1300 electric customers in Halls, TN. Eugene Pugh is the mayor of Halls. His daughter, Elizabeth Pugh Lague, (a strong Allmand supporter) was elected alderman in the Ripley 2008 city election and was subsequently appointed to the Power Board. Allmand (and probably Elizabeth) attended a Halls City Board meeting and convinced them to pass a resolution supporting the Ripley Energy Authority Act. In a further attempt to gain support Allmand is scheduled to meet with the Gates City Board on October 26th.

April 4, 2010

Desperation sets in and Ripley City Alderman along with Power and Light Chairman decide that a referendum would be the best way to approach the issue.

April 14, 2010

In a recent email sent to me, I find Mr. Allmand wants the City Board to pass a resolution supporting the Ripley Energy Authority Act contingent upon the outcome of a referendum. The present charter of the City of Ripley was created pursuant to a private act, the legislature may under Article XI Section 9 of the Tennessee Constitution enact a private act authorizing the creation of an energy authority subject to the approval by a majority of the voters in the City of Ripley. In another email City Attorney Crain while discussing this issue used already Tennenrgy partner, Bolivar’s inquiry as to its ability to inact a private act via referendum. Those working in opposition lost support of Alderman Chipman because he is convinced that the voters will vote no to the referendum question. Mayor Pavletic says let the people make the decision. In a call meeting scheduled for April 19, it looks like the City Board will pass the buck to the voters and there is some concern on the part of those in opposition. It is thought that a fraction of the voters understand the issues. Inspection of the proposal is available to the public at no cost, but its 44 pages and the language is difficult to understand. Some are assurd that many voters, if any, will spend enough time at City Hall to study the proposed act and come away with a clear understanding of same. If you want a copy of the proposal to take home and study at leisure, the cost is $6.60. Unemployment is high in Ripley and many struggle to pay bills; it is unlikely many could afford to spend $6.60 for 44 pieces of paper. In other words, there will be an uninformed public voting on a critical issue.

Second to that Power & Light will use rate payer money to get their message out while the opposition is poorly financed. Power & Light can reach more voters through bill stuffers than the opposition can through the newspapers. Allmand will repeatedly tell the voters that as an energy authority, Power & Light will have more flexibility to take advantage of sound business opportunities that will help them keep our rates low. Keeping electric rates low will be the primary concern of the uninformed voter. But those that any working knowledge of the the system understand that those rates are guarteed by law.

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