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Opelousas granted utility rate hearing in Cleco dispute

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By William Johnson

The Louisiana Public Service Commission has agreed to hold a hearing into Opelousas’ ongoing dispute with Cleco, the city’s electricity provider for the past two decades.

Mayor Donald Cravins said the hearing before the board that governs utility rates throughout the state will be Nov. 10.

“They have agreed to allow us to make a presentation and agreed to open an investigation into Cleco’s rate structure,” Cravins said.

Cleco’s current 10-year contract with the city expires in August and the city and the power company have been negotiating a new contract with little success for the past two years.

At the heart of the dispute are the rates for Opelousas customers, who are currently paying some of the highest power bills in the state.

Cleco argues it is charging Opelousas customers the same rates as everyone else, but when numerous special fees such as lease payments and franchise fees are added in, the local rates jump.

For its part, Opelousas is arguing that it is a unique case and needs to get a special rate.

Opelousas used to own its own power system. While the power plant is long gone, the city still technically owns its own power grid, which Cleco leases from the city for about

$2 million a year.

“We are not like other customers,” Cravins said. “I think we have a strong case.”

The city has argued Cleco’s current rates amount to double billing in many instances.

For example, city customers — like all Cleco customers — are charged a distribution rate to pay for the maintenance of the power lines, but Cleco then also bills the city for any repairs to these same lines.

Since Hurricane Katrina, Cleco customers also pay a storm fee to help the utility recover the cost of rebuilding the grid that was badly damaged by that and subsequent storms.

But once again, Cleco not only adds these charges to the bills of Opelousas customers but also bills the city for all storm-related repairs to the city grid.

As a result, Cleco says, if the city should choose to go with another provider, it is owed more than $9 million for its maintenance of the Opelousas system.

A consumer class-action suit, to which the city is not a party, is arguing that these and other alleged double charges have cost Opelousas residents more than $30 million in just the past 10 years.

Robbyn S. Cooper, Cleco’s communications coordinator, said the hearing before the LPSC comes as no surprise. In fact, it is something the company has been seeking as well.

“Cleco has already requested that LPSC review the rates that are charged to Opelousas customers,” Cooper said.

“Last April we filed a petition with the LPSC asking them to declare that Cleco has properly charged Opelousas customers based on the same rates that have been charged to all other Cleco customers,” Cooper said.

Written by demon53

November 3, 2010 at 4:07 pm

Posted in Uncategorized

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