Lamar City Council Goes Hardball with ARPA (Detailed Article on Council Meeting)

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Following a half hour executive session, the Lamar City Council Tuesday night, July 8, took some firm steps with regard to ARPA, Arkansas River Power Authority, and that organization’s options for the Lamar Repowering Project.  The council voted unanimously to direct its two ARPA representatives, Garth Nieschburg and Houssin Hourieh, to vote No on decommissioning the coal fired plant.  The council tabled action to join a group of citizens who are considering a private lawsuit against ARPA pending further legal counsel.  And the council voted No to sign the Syncora organic and power supply agreement which would reaffirm the original contracts with the bond holders.  Each ARPA member can select to sign or ignore the request.  However, if one member votes No, it will impede the pending settlement case between ARPA, the City of Trinidad and Syncora.  The next ARPA board meeting will be held in Las Animas on July 31.  The Lamar City Council will resume discussions on their actions during their regular meeting on July 14.

Craig Johnson, ARPA legal counsel requested time to address the council prior to the first vote, stating that the No vote on reaffirmation could prove costly to ratepayers through additional litigation.  Syncora provides insurance coverage for $110M of the $156M construction bonds, secured to build the coal fired plant.  Johnson asked the council to delay their vote, stating that Syncora had asked each ARPA member to reaffirm the organic contract as a condition of Trinidad receiving a settlement payment of $600,000.  Johnson said the current contract language is only a draft for discussion purposes.  In consideration of Syncora making that payment, the insurer asked there be some form of resolution from all ARPA members on the organic contract.  He added that they were close to reaching an accord with the litigants on final terms of the settle agreement, but the resolution before the Lamar Council isn’t the same language that Syncora requires.  He asked the council to wait until a final wording has been produced.  Johnson also asked for an opportunity for ARPA to discuss public input from the June community meetings the group hosted on the coal plant with council members.

Johnson replied to a question from councilmember, Bev Haggard about reaffirmation votes from other ARPA members.  He stated that to his knowledge, only Las Animas has signed the contract, but again without containing the final language for the settlement.  He said he believed the vote was only to show support for the reaffirmation process.

Councilman Kirk Crespin stated that, “We have an issue with the clause that states we give up any future claims and rights,” referring to the final paragraph that states,  “The city of Lamar hereby releases all claims existing as of the date of this resolution and will take no legal action, at law or equity of any kind or character, nor join in any action as a party plaintiff, against ARPA or Syncora Guarantee, Inc., concerning the organic contract, as amended the power supply agreement, the Lamar Repowering project or the revenue bonds.”  Crespin wanted to know if all the language in the resolution could be amended, to which Johnson said that was his understanding.

Councilman Ron Cook addressed Johnson, saying, “I would disagree with you that you even care about the ratepayers.  I think you’re more interested in protecting ARPA, totally.  Our ratepayers have tried to confront you and have tried to have meetings with you and you say they’re not your customers?  Now that things are getting very warm, you’ve changed your opinion on them.  You’ve asked us to trust you since 2004 and here it is ten years later and look at where we’re at.  Now you want us to reaffirm and let ARPA off the hook for the damage they’ve done to our county and city and five communities.  And when things have gotten tight ARPA shows up and tells us how they’re going to protect us again, and it’s very discouraging.”

Mayor Roger Stagner addressed Johnson adding, ”We have gone back and forth on this about five or six times and the last time we got it back, the language was worse than when we started.”  Haggard remarked, “This vote will tell you that right now, we do not like this language at this point but we can look at some changes in the future. But I can’t agree to this resolution.”  Stagner stated just before the vote that if ARPA brings back some different documentation, we will look at it, but made no promises for a change in the council’s stand.

Just prior to reading the council’s vote on decommissioning the plant, Johnson asked for clarification that a No vote to decommission and sell equipment was permanent, to never approve such action at a future time.  Mayor Stagner commented on the changing schedule for that scenario.  “The first time it was presented to us, it would be decommissioned and everyone would be laid off and you’d start tearing it down right away.  The next meeting you said it wouldn’t be taken down for six months, and then I got a call today that you wouldn’t take it down for about a year.”  He said not all of the questions about this have been answered or the sale of equipment fully explored.  “We have coal storage that could be used for something else.  We’re told the conveyor belts have no value, but we’ve got a new rock pit just outside of town that’s developing and they could be of use.  It doesn’t look like we’ve checked very far into this.  We’re getting the impression that we’re on the high road to get it torn down tomorrow.”

Councilman, Anne-Marie Crampton brought up the issue of the contract from ARPA calling for restoration of the city’s former power plant.  “There haven’t been any answers on how you’re going to make Lamar whole.”  ARPA General Manager, Rick Rigel, told the PCDI board members at their June meeting that there has been some discussion on new technology on the 25Megawatt unit, but no action has been taken on bringing the boiler and turbine up to specifications for operation, and a new application process and permitting would be required.

Lamar City Attorney, Garth Nieschburg, said the council could pass a second resolution which would amend the original one, including a timetable on when to decommission if it became necessary. Haggard added that at this point, the council was directing Nieschburg and Hourieh to vote no at the ARPA board meeting in Las Animas.  The council tabled any action on joining a citizen’s lawsuit against ARPA pending any legal information prior to the July 14 meeting.

Nieschburg said ARPA members can go with a simple majority vote to pass their own resolution which would make this action, ten to Lamar’s two.  He did say a weighted vote could be requested based on a member’s total electric sales from the year before.  If that is allowed, Lamar’s vote would constitute 30% of the membership.  La Junta also carries a 30% weighted vote, which, if combined with Lamar, would constitute a majority vote in the membership.  ARPA President, Bob Freidenberger and La Junta City Manager, Rick Klein attended the meeting as well as Rick Robbins from Colorado Mills, Prowers County Commissioner, Wendy Buxton-Andrade and Lamar City Administrator, John Sutherland.

By Russ Baldwin



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