Last Updated on July 18, 2016 by cassnetwork
Cass County Communication Network welcomes letters to the editor and guest columns. The following letter to the editor was submitted by Jim Brugh, attorney for the Utility Service Board, on July 18, 2016. The views expressed by the author do not necessarily represent those of Existential Media LLC or its owners, advertisers or sponsors.
Three participants in the June Utility Service Board meeting made legal misstatements: Dan Slusser, Paul Hartman, and Jay King. None of the three are attorneys. Slusser said that the Board would select a power vendor in July. In response to Mayor Kitchell saying that the City, not the Board, was in charge of negotiating rates with a vendor, both Hartman and King said the Board, by law firm Lewis and Kappes, was in charge of that rate negotiation because “that’s the way it’s always been done.”
It is a waste of money for the Board to negotiate a contract. While the Board recommends a vendor and rates, the City alone chooses the vendor. It is the City, not the Board, who defends the rates as reasonable when a consumer litigates.
The Board is the administrative creation of the City Council. Its members are appointed by the Mayor and the Council and are subject to removal. The Board does not dictate ultimate rate decisions to the City or its council, who are elected.
An LMU consumer will tend to trust in a rate-making process which is subject to public scrutiny. Hartman and the Board have maintained secrecy in their process of selecting vendors to bid (it was not a public request for offers), and secrecy in processing the offers (over $48,000 has been paid to Lewis & Kappes so far) without making the contract offers public. This is a violation of State public records law. The only true confidential vendor information is the vendor’s trade secret formula which is a small number of words and numbers, compared to the pile of words that constitute the offers.
The consumer is entitled to know the complete content of each vendor’s offer, except for the trade secret formula which is the basis of the rate offer. The consumer is entitled to know the rate offer and all related contract details.
History teaches a lesson how the consumers lose when LMU operates in secrecy. Hartman’s contract with Duke contained escalation clauses, such as “trackers,” beyond the basic rate. We see the effect of this “tracker” in the recent public notice published 7/8 and 7/16 which advises LMU customers of an increase in wholesale rates.
Hartman, the Board, or any capable consultant should be able to explain how much the Duke contract has cost. All Duke billings should be public records for the consumer. That contract between Duke and Hartman was secret. The consumer paid. Let the public know past, present, and projected future rates. — Jim Brugh