The City of Coleman, Texas, signed a contract in February 2006 with AEP. This contract is holding this small central Texas city hostage on extremely high electrical rates which are not competitive in the market, and furthermore, has been and is continuing to be very damaging to being able to develop new business opportunities for this struggling city and causing existing businesses to fail.
Also, families of Coleman are leaving this small struggling city due to the high electrical rates. This contract should have never been executed. It’s a death sentence for this small struggling city.
The current rate, which is locked in for years to come, is listed in the contract portion of the document that is public, at a rate as follows:
I have tried on numerous occasions to contact the original signature of AEP executive, Mr. Greg B. Hall, with no response to my request. I have also contacted Mr. Brian X. Tierney, Executive VP and CFO for AEP and thus far, no response. I have also called Mr. Nicholas K. Akins, Chairman and CEO, on two occasions, and his phone goes un-answered at his corporate office.
Seriously, I question what is going on with a company that signs such and outrageous agreement with a struggling central Texas city, with no regard for its future growth and sustainability in the business community. I’m outraged that my calls have gone unanswered and furthermore, it angers me that these executives are ignoring my calls concerning this matter. What is being hidden here to the public?
I feel there is a substantial need for outside investigation as to how this contract was conceived in the first place. Why is there such secrecy about this contract? This is a large publically traded utility company (AEP) which has signed an egregious agreement with a very small struggling central Texas city. Is there someone of several folks that received a financial incentive to sign such an engagement? Something is rotten here and I intend to get to the bottom of it.
I will hold those involved accountable! I need some answers as I will continue digging for this information. This information needs to be public, not private. AEP needs to cough up the details, and at a minimum, re-negotiate the rates for the City of Coleman, Texas to be competitive, or release the contract for another utility to take over its requirements and operations immediately before further harm results from such non-competitive rates.
A more alarming question to the executives of AEP is “How many other cities likewise to Coleman, Texas are you holding hostage? I this part of your business strategy to increase your profits and the expense of small struggling cities across the US?”
Bottom-line, Coleman is dying due to this contract. I am gathering signatures on a petition to force the release of this information. Cooperation from AEP would be most helpful. I will keep this message board posted with my results and findings.
Michael Lagow, concerned citizen for the City of Coleman, Texas.
Sentiment: Strong Sell
Is AEP that "hard up" for $$$? Coleman, Tx has approximately 3.700 customers for your electricity. The reason we use the term "held hostage" could not be put any other way! a contract that was signed several years ago, and is o be held up for another four years (currently) was amended, most recently, in 2012. this amendment included that its' terms be kept SECRET from the citizens of our city??? Even our current Mayor had to sign a contract of CONFIDENTIALITY to be allowed to see the contract with AEP! We do know that the city is being help by AEP to purchase a certain amount of electricity from AEP, whether we use/need it or not! And with many of our businesses having had to close their doors because of the high electric rates, and our only TWO industrial companies having to do the same, PLUS the large number of people who have taken every opportunity to leave our town, again, for the same reason... we just don't NEED MUCH of what we are having to pay AEP for! AND THEN... when our city was provided a news article about an elderly couple 84 & 79) in South Carolina who had gone 65 days without electricity, OWED TO AEP, because their late son had passed away many years previously owing a $500 bill to AEP, and it had recently wound up in the name of his step- mother (long story)... well, it scared many of us to death!! SHAMELESS!
Sentiment: Strong Sell
OMG!!! enough already, this topic is so old and who really cares now, if you don't like it, check other towns to live in, or better yet,, look at other utilities and their costs, some go up (inflation) and some go down due to savings made by the companies
Sentiment: Strong Buy
My Dear Mr. Cunningham: Though there aren't many of us left, THE PEOPLE OF COLEMAN, TX are who really care now. Many were born here, have lived here all their lives, retired here and will die and be buried here. And thankfully, we will no longer need your services out at the grave yard!! I'm not sure what you feel is so DIFFERENT about US that no one should CARE?? How dare you suggest that what is primarily a "retirement community" just PACK UP AND RELOCATE!! And we HAVE checked out other utilities and their costs, and ours in considerably HIGHER than most. To the point of seeming ridiculous. Discount us, as you will, but I must say - WHOEVER YOU ARE - that you must be the sorriest excuse for a human being I've encountered lately. Just wanted you to know that....
You are not giving the whole story, what is the kw-hr charge if that is real low the demand charge may not be bad. Their paying for all the towns that get electricity below market. Where I live there is no demand charge we just pay by the Kw-hr. Demand charges are good though because they penalize people who use excessive amounts of peak electricity since you have to build peaking plants and run expensive NG units to provide the power. Texas has a lot of wind generation that can't respond to peak loads so the demand charges there should be high. IMHO
Sentiment: Strong Buy
yeah well .. lookin DEEPER into hostage things, it appears "rmla", id born June 1 2014 .. "doodie" & "nancy" id's born June 2 2014 .. and "ray" id born June 3rd
All just upset with local electric rates .. oh btw, 4 id's = One Person :-o
Sentiment: Strong Buy
To Concerned Citizens of Coleman posting here:
I have strong relations with several news media companies. I have a few strong allies with investigative reports through the Fox network and CNN. I would suggest that if we can't get anywhere with transparency on this matter, that we take our concerns to the news media. I would also suggest a social media campaign on Twitter and Facebook. AEP has a media department and it would be easy to escalate a campaign to gain tremendous public exposure on this matter.
Sentiment: Strong Sell
I became Mayor of Coleman in May, 2013 -- upon the premise that "transparency" would be the new paradigm of my administration. When I requested the newest contract with AEP from the city, I was told that I had to sign a confidentially agreement in order to see the 2012 contract that had been negotiated by the previous mayor, city manager, city attorney and an "outside the city" person. I did sign the confidentially agreement, so now the only thing the citizens of Coleman have as a reference about the AEP contract is the 2007 contract, which was released under an open records request. After spending many of the city's dollars on lawyers, we are still in the same condition --- with high rates that are hidden from the citizens of Coleman who pay all of the fees, rates and taxes in Coleman. Because my hands are tied with obeying the agreement I signed, I am appealing to the citizens of Coleman to take this avenue and voice their opinion in this manner through the PR group that has agreed to help.
Sentiment: Strong Sell
In May, 2013 I did some Internet research on the City of Coleman attorney. At that time this is what I found:
Her former firm had a practice with a statement that, in my opinion, clarified a conflict with her dealing with anything doing with the AEP contract. The statement was as follows:
"ENERGY In the mid-1920's, a principal in the firm founded what was later to become West Texas Utilities Company (WTU), and the firm has performed general utility-related legal work including operations, risk management, fuel procurement and regulatory work for WTU and other regulated utilities since that time. The firm has also expanded into areas of non-regulated utility business, including independent power production (exempt wholesale generation, as well as qualifying facility cogeneration projects). The firm has also provided representation in renewable energy projects, particularly wind farm facilities."
Now some may say it gave her insight to our problems and anyone would want to hire a lawyer with a background in the very field that the city is having problems . However, as I progressed through the site I found a list of clients. The first listing of clients was under "Energy/Wind Energy/Financing". The top 4 clients listed were AEP Texas Central Company, AEP Texas North Company,
American Electric Power Co., Inc., and AEP Service Corporation.
Now granted the attorney recused herself from negotiations BUT she did not recuse herself from answering FOIA questions and replies and requests to the A/G's office. In fact, to the best of my knowledge, she authored the letters to the AG's office to deny the FOI's requested by citizens of the the City of Coleman.
Now, the lawyer is with another firm "after the fact" but, in my opinion, should have then and even now recuse herself from anything to do with AEP.
According to past statements, any monies the city collects from inflated basic fees go to payment of congestion charges; but they’re loathe to let us see how much those congestion charges cost or how they’re calculated.
AEP says the nondisclosure clause protects their ability to negotiate contracts with other cities: apparently, they’re afraid of being forced to bankruptcy if everybody knew what a good deal they’ve given the city of Coleman. Coleman, on the other hand, is apparently afraid that if they let their citizens know what a good deal they got, AEP’ll sue them ... all the while they’re moaning about excessive congestion charges. Sounds like a deal to me!
The city manager is Paul Catoe. He was hired June 30 of 2011 and was in place when the last re-negotiation took place; but not when that allegedly-nonexistent 2010 amendment was negotiated. The city manager in 2010 was Larry Weiss.
It seems to me that if AEP could be made to see that they’re perhaps unfairly being blamed for the predicament of Coleman, they might wise up and concede the confidentiality clause to prove they’re not responsible.
Whatever else may have happened, a whole lot of #$%$-covering has taken place since 2007.
Sentiment: Strong Sell
In June of 2011, I asked the city of Coleman to give me a copy of the 2007 AEP contract. They refused and I petitioned the attorney general’s office. On September 27 of that year, the office of the Attorney General of Texas ordered the city to send me a copy of the contract.
During ensuing months, as the contract became the focal point of political campaigns for mayor and city council, it was revealed that an amendment might have been made in 2010. In reply to both my request and the request of one other citizen, the city denied that such an amendment existed; so, again, petitions to the A/G were filed.
This time, on July 17 of 2013, the A/G’s office denied my petition. In so doing, it not only denied access to the amendment: it also denied access to the 2007 contract itself, the very contract it had earlier ordered the city to provide to me. It’s a wonder they didn’t ask me to return it.
It’s AEP's position that information in their contract with the city would, if it became public knowledge, harm their ability to negotiate competitively with other cities. I have a tough time believing that any AEP negotiation would hinge on information contained in a contract with a town the size of Coleman!
The ineptness of past city administrations, obduracy of AEP and ambivalent rulings of the A/G’s office would be fodder for comedy had not their impacts been so disastrous. But Coleman’s citizens are forced to pay increasingly outrageous rates for electricity and our main street is blighted by deteriorating buildings abandoned by businesses that couldn’t afford to continue to operate. And the chances of attracting new businesses to replace the lost ones is little to zilch.
Thank you for taking the initiative in a matter that has seemed, to this point, insoluble. If you can convince AEP to come out of the shadows that it’s in their best interest to look at the Coleman contract with a fresh set of eyeballs … there may be some hope for our little town.
Sentiment: Strong Sell
May I ask why you folks don't call the governor of texas? this is something he should be aware of, some companies do tend to have predatory practices, seems AEP is one of them. I live in NJ and I can go to any utility company and get any information I want and they have to provide it to me right away. I love texas and I am sorry you guys are having such a hard time to this company.
As a resident of Coleman County and a property owner within the City of Coleman, I am well aware of the ongoing problems faced by ALL the residents of Coleman. When it no longer became feasible for the City of Coleman to produce and provide their own electricity (yes, the city owned their own light plant and had always produced its own electricity), the council did the right thing in "shopping around". However, their advisor and "friend" was AEP. While I knew, personally, that no one should ever commit to a 10 year plan, many thought a firm number on an unknown energy problem was better than nothing. The ever changing energy price could have gone up as well as go down, but not knowing anything about electricity costs, the city fathers bought from their friends and, literally in my opinion, got screwed! Several groups and individuals have tried to approach AEP with solutions. Some might have been successful, but there is another contract and, as gossip goes, no one knows what it says because it has a signed confidentiality agreement. Who does that to their taxpayers? Regardless of all the FOI requests, the city refuses to share that particular contract with the taxpayers of the city. It makes you wonder what is really in that "secret" contract....let's just hope the contract has NOT been extended.
Yes, the ongoing utility costs are damaging to any business new or old. Yes, people have moved and businesses have closed. If you can just pay your utility bill AND keep your doors open, you are a successful business in Coleman! The whole situation is costing our small rural community from growing and/or thriving. Certainly property owners have to choose: Do I upgrade and/or improve my property or do I pay my electric bill? I am sure we all know the answer to that question! Therefore, the city has an abundance of dilapidated and neglected property where owners have just moved on.
While we all hope something improves, morale continues at its lowest!
From what I understand, the City fathers were not well informed as to the mechanics of the proposal. Typical of a small struggling city. This contract should have never been signed in the first place. The contract also forced the demolition of the only existing power plant that the City of Coleman had in its possession. Therefore, once the contract was in place in 1996 and the demolition of the existing power plant was completed, Coleman had no choice but to be locked and loaded with AEP. AEP set it up this way to force Coleman into a long-term contract at outrageous rates, with no regard for continued economic development. This contract is causing Coleman its future. This little town is dying as it can not attract new business due to these outrageous rates. They have lost numerous families and businesses. I will keep digging for information on this deal. There is something rotten in the way this deal was put together. Someone, or some company, must have received a heavy incentive for allowing this deal to be consummated. Its criminal in my opinion! How many other small cities are being affected likewise to the Coleman contract? Does AEP operate their business this way for their own gain at the expense of small townships like Coleman? This has to be stopped!!! AEP needs to stand up and be accountable and realize what their outrageous, non-competitive rates are doing to a small city! They are killing this city month-by-month!!! Despicable!!!!