Menasha Utilities-WPPI Sale Leaseback Approved

by preferred on February 15, 2010

The PSC Chairman called this a ‘unique and unfortunate situation.” In 2004, Menasha undertook a project to refurbish its existing unused coal-fired electric generating plant to produce steam which it proposed to supply to several nearby industries. As it evolved, the city experienced substantial cost overruns and failed to contract with enough steam-host industries for the full output of the plant. As a result, the city defaulted on steam revenue bonds and risks defaulting on general obligation bonds. Several of the revenue bond holders have sued the city in federal court in Indiana.
WPPI is involved in this matter because Menasha is one of its largest members and the fallout of consequences to Menasha would have serious consequences to the financial integrity of WPPI and its other members.
The Commission approved the Menasha-WPPI request for Menasha to sell its electric distribution system and related facilities to WPPI at net book value; sell its ownership shares in ATC; lease back the electric system facilities from WPPI to continue its obligations as an electric public utility; raise its rates for electric service (by less than 2 percent) to cover its ongoing costs of the electric utility on a cash-flow basis; and use the proceeds from the sale of facilities and ATC ownership shares to meet a substantial portion of its debt requirements.

Docket 05-EI-149

The way Backup Should Be FREE!

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