May 7, 2007
IT AINT OVER YET AT THE MLGW
The Mayor would like the public to forget about HIS mess at the MLGW and so he fired Joe Lee and Odell Horton Jr. He will take care of them later if he gets reelected. But it is not over and a lot of questions need to be answered. Here is a list.
• What is the final loss in the gas division for 2006? As of November 2006 it was $18 million (a $28 million dollar turnaround from 2005). Who ordered the PGA to be added to the bills during the winter heating season that must now be returned to the ratepayers?
• Why were natural gas prices charged by the MLGW to the ratepayers 26% to 41% higher than the Henry Heb Natural Gas Price Index price? These prices cost the rate payers anywhere from $75 million to $150 million more than the market price of natural gas during this last heating season. Was it a bad guess on futures purchases where MLGW was long on gas futures and most of the smart money was short? Who made the decisions on these purchases?
• An independent public investigation needs to be conducted on the hedging and futures contracts at the MLGW looking at what actually happened and what companies furnished the gas. In an October 7, 2004 statement issued by Joe Lee entitled “First 90 days yields streamlined organization, increases efficiency and collaboration” there was a section titled “Increased Natural Gas Supply Options”. In that section it was stated “ MLGW will soon have access to gas suppliers beyond the Gulf region, as a connection with a third pipeline contractor (ANR) will provide access to supplies from Canada and the Midwest. Texas Gas Transmission and Trunkline, which for many years, have been MLGW’s sole suppliers of natural gas, have each expanded their supply network since last winter, as well, enabling MLGW to draw from resources in the Rocky Mountain region. On October 25, 2005 MLGW issued a News Release containing the following statement “To donate to the “Power of Five” campaign, stop by any First Tennessee Bank location. To kick off the campaign, Panhandle Energy, a natural gas supplier, has donated $250,000. Partners in the “Power of Five” include the City of Memphis; Memphis Light, Gas and Water; and the Women’s Foundation of Greater Memphis.” Was Panhandle Energy a supplier of natural gas during this last winter season?
• The overpayment of PILOT payments (payments in lieu of taxes) by the Gas Division to the City of Memphis amounts to $47 million dollars from 2001 to November 2006. This is in violation of the City Charter and has allowed the City of Memphis to dip into the reserves of the MLGW. This violation of the City Charter needs to be investigated.
• Finally the City Charter and state law states the following. “Any surplus thereafter remaining over and above safe operating margins, shall be devoted solely to rate reduction.” The MLGW is supposed to be operated as a non profit operation. However in the past the MLGW continues to pile up cash, particularly in the electric division to the tune of $53 million in 2004 and $66 million in 2005. At the end of 2005 the total current assets for the three divisions were $369 million versus total current liabilities of $208 million for a net of $161 million, up from $120 million in 2004.
The MLGW has a lot of explaining to do before the Mayor and the City Council can say that everything is fixed and all we have to do is get a new President at the MLGW.
IT AINT OVER YET AT THE MLGW
The Mayor would like the public to forget about HIS mess at the MLGW and so he fired Joe Lee and Odell Horton Jr. He will take care of them later if he gets reelected. But it is not over and a lot of questions need to be answered. Here is a list.
• What is the final loss in the gas division for 2006? As of November 2006 it was $18 million (a $28 million dollar turnaround from 2005). Who ordered the PGA to be added to the bills during the winter heating season that must now be returned to the ratepayers?
• Why were natural gas prices charged by the MLGW to the ratepayers 26% to 41% higher than the Henry Heb Natural Gas Price Index price? These prices cost the rate payers anywhere from $75 million to $150 million more than the market price of natural gas during this last heating season. Was it a bad guess on futures purchases where MLGW was long on gas futures and most of the smart money was short? Who made the decisions on these purchases?
• An independent public investigation needs to be conducted on the hedging and futures contracts at the MLGW looking at what actually happened and what companies furnished the gas. In an October 7, 2004 statement issued by Joe Lee entitled “First 90 days yields streamlined organization, increases efficiency and collaboration” there was a section titled “Increased Natural Gas Supply Options”. In that section it was stated “ MLGW will soon have access to gas suppliers beyond the Gulf region, as a connection with a third pipeline contractor (ANR) will provide access to supplies from Canada and the Midwest. Texas Gas Transmission and Trunkline, which for many years, have been MLGW’s sole suppliers of natural gas, have each expanded their supply network since last winter, as well, enabling MLGW to draw from resources in the Rocky Mountain region. On October 25, 2005 MLGW issued a News Release containing the following statement “To donate to the “Power of Five” campaign, stop by any First Tennessee Bank location. To kick off the campaign, Panhandle Energy, a natural gas supplier, has donated $250,000. Partners in the “Power of Five” include the City of Memphis; Memphis Light, Gas and Water; and the Women’s Foundation of Greater Memphis.” Was Panhandle Energy a supplier of natural gas during this last winter season?
• The overpayment of PILOT payments (payments in lieu of taxes) by the Gas Division to the City of Memphis amounts to $47 million dollars from 2001 to November 2006. This is in violation of the City Charter and has allowed the City of Memphis to dip into the reserves of the MLGW. This violation of the City Charter needs to be investigated.
• Finally the City Charter and state law states the following. “Any surplus thereafter remaining over and above safe operating margins, shall be devoted solely to rate reduction.” The MLGW is supposed to be operated as a non profit operation. However in the past the MLGW continues to pile up cash, particularly in the electric division to the tune of $53 million in 2004 and $66 million in 2005. At the end of 2005 the total current assets for the three divisions were $369 million versus total current liabilities of $208 million for a net of $161 million, up from $120 million in 2004.
The MLGW has a lot of explaining to do before the Mayor and the City Council can say that everything is fixed and all we have to do is get a new President at the MLGW.
posted by watchdog at
7:22 PM
2 Comments:
Please make sure the press know this and can do a follow up story to let the people know!
By
Anonymous, at 3:55 PM
This is just as much Willie's mess as Joseph Lee's. Joseph Lee was an incompetant Financial Director with the city. So what did Willie do? He moved him from the city & more than doubled his salary.
Then Joseph Lee ran off or fired everyone who knew anything about anything. Now there's nothing but a bunch of accountants running the show who know absolutely nothing about the product they sell or the service they provide. But they can count!....or can they?
A manager, salesman or a service rep who does not know his product, will never be any good at his job. A manager has to know when to buy and how much. They don't know their product. They don't know enough about what they are selling. They are selling a product that requires maintenance and construction costs, which means they have to include cost of running equipment, supply costs, and labor costs.
The problem is ignorance in management. There is nobody running the place who knows anything about the utility!
The mayor & the council both have a lot of explaining to do.
By
Angel, at 2:26 PM
Post a Comment
<< Home