The City of Clinton is taking $166,000 from a fund designed to keep customers’ electric rates stable and will apply it to a first payment toward interest in a lawsuit settlement.
As a member of the electric-cities organization Piedmont Municipal Power Agency, Clinton and others (including Laurens and Newberry) have a portion to pay to Rock Hill and Greer for their agreement to settle a long-standing legal action.
At one point, it looked like PMPA was going to break apart - leaving the cities to “shop around” for electricity - because Rock Hill was dissatisfied with its position as the largest of the electric-cities.
Next year, the fund will be tapped for $250,000. It wasn’t immediately clear at Monday's regular council meeting how much money that would leave in the rate stabilization fund.
Mayor Pro-tem Ronnie Roth said by 2035 Clinton’s share will have been $7.2 Million.
“The people need to know that. A detailed press release needs to be put in the local newspaper and let our electric customers know what has transpired here,” Roth said.
The lawsuit started out as seeking $150 Million, and that was negotiated down to $45 Million. City Manager Tom Brooks said the cities spent all day before an administrative law judge to come to that amount, accepted by all the PMPA member-cities.
Brooks said after 2025, PMPA funds might be able to cover the rest of the amount through “the decommissioning fund.”
Roth said the actual settlement was $55 Million and $10 Million was committed by PMPA from its “working capital”. The rest, $45 Million, has been paid through a bond, and the PMPA member-cities contribute to the bond repayment.
“4.6 Million to $4.7 Million is our portion of the interest on the bond,” Roth said. “There should be no additional cost to our electricity customers.”
“This is a great plan to help us pay for this without affecting customer bills,” Mayor Randy Randall said.
The City has its rate stabilization money invested. Brooks said the interest acquired on that investment should cover the bond payment obligation. He said the city won’t know until later if PMPA’s “decommissioning fund” can meet the future obligation.
The matter came before the council because Brooks, and any future city manager, must bring spending from this fund to the full council for approval. Audited figures have shown it has been tapped before for expenses; and council members have said, if that was done, it without their full knowledge. Council has decided the fund does not need a forensic audit.
Jan. 31 article in The Chronicle:
SETTLEMENT OF LITIGATION AMONG THE PARTICIPANTS OF THE PIEDMONT MUNICIPAL POWER AGENCY
Piedmont Municipal Power Agency (PMPA) announces that the litigation among its participants concerning cost allocation has been settled. The litigation dates to 2019 and stemmed from a disagreement about the allocation of cost among the participants of PMPA’s ownership and operation of the Catawba Nuclear Station Unit 2 located in York County.
Defendants in the case, Greer Commission of Public Works and the City of Rock Hill, asserted they were paying more of the cost of Catawba than they were contractually required. PMPA and the other participants disagreed. After several mediation attempts and a Summary Judgement hearing that provided no resolution, the participants agreed that settling this disagreement and moving on to address larger issues of electric power supply was more important than waiting for a trial.
The settlement consists of Greer CPW and City of Rock Hill receiving a combined cash payment of $55 million, with all disputes and cost allocation claims being dismissed, and the current All Requirements wholesale power rate structure remaining in place through 2028. The $55 million will be paid using a combination of PMPA working capital and debt financing. Debt service on the settlement financing will be paid by all other participants of PMPA excluding Greer CPW and the City of Rock Hill.
PMPA Board Chairman Blake Stone, who represents the City of Abbeville, offered the following statement, “This settlement allows PMPA to move forward in its mission of providing wholesale power supply and other power supply related services to its participants. Electric utilities in our area are facing the challenges of providing reliable, affordable, low carbon energy to their growing customer base. With this litigation now behind us, PMPA can begin the important work of securing our energy future utilizing PMPA’s Catawba Nuclear asset.”
PMPA was created by its ten member utilities and provides wholesale electric services for those communities. Through its member utilities, the agency services over 100,000 electric customers in the upstate of South Carolina.
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