Council gives OK to utilities’ power agreement

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Cail says some annexed residents will be surprised, disappointed


TELL CITY – The Tell City Common Council gave its unanimous approval Monday to an agreement between the municipality’s electric utility and Southern Indiana Power that will direct who serves homes and businesses in 1,776 acres the city wants to annex.

As the News reported in its Monday issue, the agreement was OK’d by the Tell City Electric Department’s board of directors during a meeting last Thursday. It calls for the two utilities to equally serve future commercial and industrial customers, meaning each will receive half of the revenues as well as foot half of the costs of new lines and transformers.

The city will receive 38 new customers in the annexation area while Southern Indiana Power will continue to provide power to the remainer of its customers in the area.

Mayor Barbara Ewing voiced her support for the agreement during discussion Monday, saying it provided the most economical way for the two utilities to serve the area and to avoid costly litigation.  

If adopted by the electric board and city council, the agreement stipulates Southern Indiana Power will not oppose or support a remonstration by property owners against the annexation effort by the city.

She pointed out that it is not always economically feasible to serve every customer considering the amount of infrastructure that would have to be built.

Part of the deal provides that future residential customers will be served by the utility with the closest existing service.

The agreement gives Tell City exclusive authority to serve the new Perry County Memorial Hospital and future subdivisions in the annexation area. The pact’s provisions will extend to future annexation unless both utilities agree to changes.

Jack Joyce, Tell City’s retired electric department superintendent, posed several questions, among them why there appeared to be a hurry to approve the deal with so little time for public input. He pointed out that news of the electric board’s discussion and vote Thursday made Monday’s News but the Presidents Day holiday meant most papers were not delivered until Tuesday.

Joyce said he didn’t disagree an agreement of some type was needed but said the city risked giving away too much and said the agreement violates the electric board’s fiduciary responsibility to its customers.

“When you’re a utility the most valuable thing you have is territory,” he said. “This action should have been open to public comment, sufficiently noticed in a public meeting. Relegating it to a special meeting hurriedly noticed is not sufficient.”

Joyce said the agreement also creates an “administrative and management nightmare” as far as determining who will serve some areas in the annexation area.

Councilman Chris Cail raised questions of his own, saying residents in the annexation area who received notices from the city expected to be served by Tell City Electric. He said many will be disappointed to learn they won’t see anticipated savings of about $21 each moth in their electric bill.

“I  hope they aren’t too upset,” he said.

The fiscal plan prepared for the annexation effort said residents in the annexation area would save money from the city’s lower electric rate.

Joyce also questioned whether people in the annexation area were given the proper notice and said the agreement conflicts with notices given to homeowners about the city’s plans.

Ewing said the notices sent after the council introduced an annexation notice said the city “anticipated serving” those areas with electricity. She said the fiscal plan was created in good faith but was no guarantee of what areas the electric utility would eventually serve.

Cail didn’t buy the mayor’s answer, saying the word  “anticipated” may mean something legally but not to residents who read about annexation notices from the city or stories in the newspaper.

Joyce agreed, saying average residents were “neither linguists nor lawyers.”

Another councilman, Gerald Yackle, seemed surprised at first to learn there would be people in the newly annexed areas who will stay connected to southern Indiana Power but ended up voting for the agreement.

The city council and department heads were to attend an open-house style  meeting Wednesday designed to offer property owner a chance to talk informally with city  representatives.

 After that, the annexation effort heads to a March 3 public hearing before the city council.