April 23, 2007
REMEMBER LARRY, CURLY AND MO? WELL NOW WE HAVE WILLIE, EDMUND AND JOE!
The recent announcement by the MLGW is more than a little strange and requires a full explanation. Consider the following points.
• First, they manage to lose $18 million dollars with a monopoly that can charge customers whatever they want to, regardless of what they pay for the gas, through the PGA, purchase gas adjustment.
• Next, they buy gas for inventory to store in two caves and charge the customers for the gas through the PGA even though they did not use the gas. They overcharged the customers during the winter heating season when many were struggling to pay their utility bills.
• Then, after the auditors came in they say, SORRY, we made a mistake and collected your $15 million plus dollars, held it for 8 months, earned interest on it but now we will return it.
• Finally, worst of all, they paid anywhere from 26% to 41% ($75 million to $150 million) above market price for the gas that they sold to the ratepayers.
It is not like they have never bought gas before and stored it. The November 2006 interim financial statement of the MLGW states on page 47 (note E) the following statement. “Prior to December 2005, during a refill month, MLGW recognized revenue collected from customers related to the costs of refill. However, gas cost was reduced by the cost of refill, and an inventory asset was recognized. During a withdrawal months, there was no recognition of revenue related to the sale of gas withdrawn from LNG, but gas cost was recognized and the value of inventory was reduced. To match sales revenue and gas costs, an adjustment was made to decrease retained earning. An adjustment was also made to increase liability in other accounts payable, accrued expenses, and deferrals by $7,202,584.37.”
No rebate was made to the customers. What is different this time? Well the auditors have finished their work and the final audited statement is in the hands of the MLGW management. Last year, the auditors signed off on April 4, 2006. The public needs to have a copy of the statement made available to determine what happened in 2006 that was different from 2005 and prior years. Also an independent examination needs to be made of the MLGW gas purchasing operation, futures and hedging contracts to determine why the MLGW paid so much above the market price of gas. We can no longer afford the incompetent management of the MLGW.
REMEMBER LARRY, CURLY AND MO? WELL NOW WE HAVE WILLIE, EDMUND AND JOE!
The recent announcement by the MLGW is more than a little strange and requires a full explanation. Consider the following points.
• First, they manage to lose $18 million dollars with a monopoly that can charge customers whatever they want to, regardless of what they pay for the gas, through the PGA, purchase gas adjustment.
• Next, they buy gas for inventory to store in two caves and charge the customers for the gas through the PGA even though they did not use the gas. They overcharged the customers during the winter heating season when many were struggling to pay their utility bills.
• Then, after the auditors came in they say, SORRY, we made a mistake and collected your $15 million plus dollars, held it for 8 months, earned interest on it but now we will return it.
• Finally, worst of all, they paid anywhere from 26% to 41% ($75 million to $150 million) above market price for the gas that they sold to the ratepayers.
It is not like they have never bought gas before and stored it. The November 2006 interim financial statement of the MLGW states on page 47 (note E) the following statement. “Prior to December 2005, during a refill month, MLGW recognized revenue collected from customers related to the costs of refill. However, gas cost was reduced by the cost of refill, and an inventory asset was recognized. During a withdrawal months, there was no recognition of revenue related to the sale of gas withdrawn from LNG, but gas cost was recognized and the value of inventory was reduced. To match sales revenue and gas costs, an adjustment was made to decrease retained earning. An adjustment was also made to increase liability in other accounts payable, accrued expenses, and deferrals by $7,202,584.37.”
No rebate was made to the customers. What is different this time? Well the auditors have finished their work and the final audited statement is in the hands of the MLGW management. Last year, the auditors signed off on April 4, 2006. The public needs to have a copy of the statement made available to determine what happened in 2006 that was different from 2005 and prior years. Also an independent examination needs to be made of the MLGW gas purchasing operation, futures and hedging contracts to determine why the MLGW paid so much above the market price of gas. We can no longer afford the incompetent management of the MLGW.
posted by watchdog at
9:56 AM
1 Comments:
Great site for the cronic uninformed public...too bad more Memphians don't take interest in what goes on.Me..I got sick of it and gave up.. probably the best job the city had to offer after 15 years.Vicious is the only word I can describe the political climate of the city ( and the local media)I came back too after being gone for 8 years in the service prior to my employment.Well I'm gone again...sure miss what the city once was.
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Blazestop, at 10:32 PM
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