WSTE sues energy firm
Published 4:03 am Wednesday, July 5, 2017
Washington-St. Tammany Electric (WSTE) announced last week that it is heading to court, allegedly to protect its members from paying exorbitant environmental remediation fees.
Coylean Schloegel, the manager of marketing and development for WSTE, said that the dispute centers around the local electric cooperative’s all-requirements contract with its wholesale power supplier, Louisiana Generating LLC, a subsidiary of NRG Energy.
According to WSTE General Manager Charles Hill, Louisiana Generating over the past few years has invested more than $93 million to upgrade and retrofit its power supply facilities located in New Roads. The costs include converting one of its three coal-burning units to gas to remediate environmental conditions existing at the facilities when Louisiana Generating bought the facilities.
Louisiana Generating, a for-profit wholesale power supplier, contends WSTE and the company’s seven other retail co-op customers across the state are responsible for paying the environmental remediation costs.
Hill said WSTE’s position is that Louisiana Generating is responsible for paying these costs that it agreed to pay under a consent decree with the federal government to address past pollution. Louisiana Generating began billing the local cooperative and its other co-op customers for the environmental costs more than a year ago.
Hill said just WSTE’s portion of the charges would total several millions of dollars over the life of the all-requirements contract. The cooperative claims in the lawsuit that its members should not be responsible for paying the additional charges. Hill added that Louisiana Generating’s retail customers already pay environmental costs for other emission control expenses that they agree the power generator is entitled to collect.
David Knox, the senior director of external communications for NRG, said that his company strongly disputes WSTE’s arguments.
“We disagree and will vigorously defend the claims against Louisiana Generating,” he said.
Dr. Francis Cefalu serves as president of the WSTE board, and commented on the lawsuit.
“Our primary responsibility to our members is to keep their cost for electricity as low as possible,” Cefalu said. “Our members have homes and families and businesses and they can’t afford additional and unnecessary increases in their power bill. We’ve fought for decades to make sure our co-op members are treated fairly and pay the lowest rates possible, and that’s what we’re going to continue to do.”
Hill said the non-profit electric cooperative attempted to work with the wholesale power supplier to resolve the issue before filing suit, and remains open to a resolution that protects the interests of the members.
“We’re in favor of cleaner air and a cleaner environment, but we also have to be mindful of the financial welfare of our members,” Hill said. “It gets to the point where it really begins to negatively impact the everyday lives of our members and families right here in our community.”
Cefalu added that NRG is one of the largest power generation companies in the country and should take the cost of environmental remediation out of its annual profit margin.
“This is a giant corporation with very deep pockets,” he said. “It doesn’t make sense to us that the cost of environmental remediation should be borne by those ordinary, everyday folks who can least afford it while a corporate giant continues to rake in profits off the backs of our members. This is a very real case of Wall Street profiting off those who are living and raising families on Main Street.”
Also joining the lawsuit is Claiborne Electric, a non-profit electric cooperative based in Homer.
Claiborne Electric General Manager Mark Brown echoed the comments of Hill and Cefalu.
“We are non-profit, member-owned cooperative organizations, and our members are primarily based in rural areas,” Brown said. “They have enough financial and economic pressure to make ends meet every single day. They can’t afford to be paying more for electricity than they should.”