Archive for Tuesday, November 21, 2000

KMEA, BPU suit heard

November 21, 2000

Baldwin City officials could learn today how much weight the city's case against the Board of Public Utilities holds with Franklin County District Court Judge James Smith.

City Administrator Larry Paine said today's hearing, called a motion of summary judgment, is a critical step in the case against BPU.

Baldwin and a group of other cities in the Kansas Municipal Energy Association are suing BPU over prices charged for electricity when the BPU's Nearman generating station was closed because of a fire during summer 1999. The plaintiffs contend they were forced to purchase power at rates well above levels described in contracts with the BPU.

Since the filing of the lawsuit, the BPU has tried to have the case moved from Franklin County through the District Court and Kansas Supreme Court, and has tried to exclude the cities as parties of the case. The case was filed in Franklin County because Ottawa, one of the cities in the case, sustained the most financial damage.

Paine said the judge should decide today what direction the case should take.

"It will tell us if the court is giving credence to either legal position," Paine said.

Paine said the outcome could be a settlement from the BPU, a trial or even the opinion that the position of the involved cities is incorrect.

"I would like for the judge to render an opinion today that says action on the part of the BPU violated the contract, and the next set of hearings will determine what sort of compensation various cities get from that," Paine said.

Paine said the cities have turned down a settlement offer of $42,000. The cities seek damages in excess of $1 million.

In addition to recovering overcharges from the summer of 1999, the lawsuit seeks to prohibit the BPU from using the same pricing formula in future billings.

Baldwin paid up to $2,420 per megawatt-hour for power in late July 1999, compared to the normal price of about $50 per megawatt-hour. Without a reserve fund for such emergencies, Baldwin took out a $300,000 no fund warrant from Baldwin State Bank to pay for the bill.

The expense was passed to Baldwin electric customers, who were billed a surcharge based on usage. The amount was payable in full, or in monthly installments for a year. The average residential customer is paying an $11.50 surcharge per month.

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