An important vote today for Clinton, Union, Newberry, Laurens

City of Clinton Resolution approved this morning, in part: "In keeping with its desire to best protect and represent the interests of the City, Council finds and determines that the 'Memorandum of Understanding Relating to Piedmont Municipal Power Agency All Requirements Rates January 1, 2029" (the 'MOU') ... shall be authorized, approved, executed and delivered in accordance with the provisions of this Resolution."

MAYOR VOTES NO ON MEMO OF UNDERSTANDING - City of Clinton’s electric future hangs in the balance as Gaffney will makes its decision on withdrawal in Dec. 3.

 

 

Clinton City Council today gave Mayor Bob McLean authority to sign or reject a Memorandum of Understanding designed to keep 7 (formerly 10) member-cities of the PMPA together at least until 2034.

Cities have the right to withdraw from the agency’s supplemental power agreement up until Dec. 31, 2019 - they have to give 10 years notice. Three cities - Rock Hill, Gaffney, Westminster - have said they are withdrawing; Laurens CPW has been give authority by Laurens City Council to withdraw, and Newberry City Council agreed Tuesday night to withdraw if certain conditions are not met.

After a called meeting this morning, 7:30 - 8:30 a.m., McLean said the city does not want to withdraw, but some issues will have to be cleared up - the MOU gives the 7 remaining cities a year to do that, he said. Disbanding of PMPA - which could happen if two more cities withdraw - would mean a $15 million obligation to the City of Clinton, McLean said. Union, also, would be “devastated,” he said - Easley and Gaffney would come out “neutral,” he said.

The issue could be decided tomorrow (Nov. 21). The PMPA Board meets at 10 a.m. in the Greer headquarters, following an Executive Committee meeting at 9. Each of the 7 remaining member-cities could see an electric rate increase from PMPA as the agency goes from 10 to 7 members. 

The arrangement matters because the PMPA rate is a driver in what the cities re-sell the electricity to customers for - Clinton residential customers have complained for three years that this re-sale rate is among the highest in South Carolina.

Rock Hill likely is a large enough city to buy its electricity directly from Duke Energy (and it retains its share in the Catawba Nuclear Reactor). The other 9 cities, however, likely buy too little power on their own to interest Duke in individual contracts. Union is in a unique position, as it buys some of its power from the Lockhart Generating Plant.

 

WLBG - City Council Authorizes CPW Action, If Needed

Wednesday, November 20, 2019

Laurens City Council last night approved a resolution to join with the Commission of Public Works in authorizing action by its management. The resolution approved last evening gives CPW General Manager John Young temporary authority to terminate one of the agreements between Laurens CPW and PMPA, if certain conditions arise. The authority is only through December 31st, 2019.

 

PREVIOUS:

 

7, instead of 10, all-service members

 

City’s electrical supplier

aims for a survival MOU

 

By Vic MacDonald

Editor

 

A Memorandum of Understanding is circulating designed to keep the seven member-cities of the Piedmont Municipal Power Agency -- including Clinton and Laurens -- together in an electricity-supplying arrangement through at least 2034.

It could be the first step in resolving a dispute that has led to a lawsuit and has kept cities at cross-purposes for about a year. The seven city councils of the member-cities will have to sign on before there is an agreement.

If an agreement cannot be reached, PMPA Executive Director Coleman Smoak said Gaffney will turn in that city’s intent to withdraw.

“(Then) we need to give our notice, too,” Clinton City Manager Bill Ed Cannon said. “We just declare bankruptcy and throw the keys in the street.”

Smoak said even if that happened, the 10 member-cities would be obligated to pay $200 million in debt.

“PMPA has to pay this money,” Smoak said.

The PMPA board meets again tomorrow (Nov. 21). The Clinton council met this morning.

The MOU will say that the seven cities will not exercise their right to give a 10-year notice of intent to leave the PMPA full-service agreement. Three cities already have made their declaration to leave - Rock Hill, Greer and Westminster - and they will no longer be full-service members of the agency after 2029 (these cities will remain part of the Catawba Nuclear Agreement that provides the source for electricity that PMPA sells to member-cities, and will have seats on the board).

The arrangement matters because the PMPA rate is a driver in what the cities re-sell the electricity to customers for - Clinton residential customers have complained for three years that this re-sale rate is among the highest in South Carolina.

The decision of Rock Hill, Greer and Westminster to leave threatens to topple PMPA like a house of cards.

The debt is retired in 2034 - so the MOU that Smoak and others drafted outlines a way to keep the seven member-cities together through that time. The PMPA board would have two choices in the interim -- “hold on” with each city paying a little more for power until the debt comes off the books and then see a substantial rate decrease, or refinance the debt (interest rates now are at historic lows) and lower debt payments, allowing for a possible, smaller increase in power costs for the life of the re-fi.

Newberry Mayor Foster Senn said the proposal was to be presented to the council of his city last Tuesday night. 

“There is a lot on these seven (now that Rock Hill, Greer and Westminster have decided to withdraw),” Senn said.

“Since 1980, we have been partners. We all want each other to succeed and do well. Laurens (CPW) got permission recently to file not to continue with the supplemental power agreement - I don’t expect we will do that. We will want a live fax in the PMPA office until Dec. 31, 2019.”

That year-end date is the deadline for member-cities to decide - Stay or Go.

That is, unless all seven sign an agreement not to use their option to withdraw. Once that agreement is established, Smoak said, all the other issues facing PMPA can be negotiated. These include a pending lawsuit by Newberry, Laurens, Easley and Gaffney against Rock Hill, Greer, Clinton, Union, and PMPA itself. Abbeville and Westminster are not parties to the litigation. 

 

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