Saturday, February 23, 2013

Walker's (WI - ALECer) No Bid State Power Plant Sales Pending????

Just like ALEC – if you wait long enough the nastiness will start to emerge.
Scottie Walker has had other things to deal with the past two years.
And just like ALEC - What was old for Scottie is now new again.

NOW – he is digging back to those first couple of pieces of nasty legislation that he introduced after taking oath of office.  

As reported in a tweet site I follow:
But the award for the wildest funding scheme may go to renowned highway spender Governor Scott Walker in Wisconsin, who wants to raise $6 billion for the state’s roads by selling 37 publicly owned power plants. The Milwaukee Journal-Sentinel reported this week on Walker’s bizarre plan keep the highway money flowing, and send the bill to utility customers:

The move could also have the unexpected effect of linking the prices paid by some utility customers to the financing of the state’s road system. Bonds for the road work would go through even if the state property was not ultimately sold.

What are these projects that are so tremendously important the state’s assets must be sold to pay for them?

That’s not the point – the point is that Walker is ALEC educated/brainswashed.
In 2002 – one of ALEC’s prescriptions for state legislatures was
Turn Capital Assets into Financial Assets: Sell or Lease Government Assets and Enterprises
What kind of money are we talking here?
Really – bundles of money???

Walker put these into his 2011 budget as NO-BID sales, under the jurisdiction of the Department of Administration NOT the Public Service Commission review

Direct quotes from pages 6 and 24 of Scott Walker’s Senate Bill #11 – February 11, 2011
Currently, this state owns and operates numerous heating, cooling, and power plants that were constructed by the state to provide heating, cooling, and power to state facilities. The Department of Administration (DOA) determines the method of operation of these plants and may delegate this authority to any other state agency that has managing authority for a plant. This bill permits DOA to sell or contract for the operation of any such plant.

16.896 Sale or contractual operation of state−owned heating, cooling, and power plants. (1) Notwithstanding ss. 13.48 (14) (am) and 16.705 (1), the department may sell any state−owned heating, cooling, and power plant or may contract with a private entity for the operation of any such plant, with or without solicitation of bids, for any amount that the department determines to be in the best interest of the state.

And just two weeks later in 2011 the Journal Sentinel wrote this:

Under the budget-repair bill passed by the Assembly on Friday, no bids would be required for the state to sell up to 37 heating and cooling plants across the state.

The bill would empower the secretary of the state Department of Administration to sell the plants, which primarily serve University of Wisconsin campuses, including those in Madison and Milwaukee, as well as state prisons and other facilities.

In a change from a similar proposal that Republican lawmakers sought six years ago, the bill stripped a requirement that the Public Service Commission review whether the sale is in the public interest.

And they aren’t worth $6 Billion Dollars
The Fiscal Bureau analyzed the facilities in 2005, the last time the proposal was before the Legislature, and estimated the total value of all the plants at $235.9 million, offset by $83.9 million in debt.

"These plants are probably all fully depreciated plants, and that's not the time to sell," he said.

I wonder how much roadwork $159 million  - will build.
Less than $159 million when you condier they are two years older now.
Maybe a new driveway for the governors mansion.

Jeff Plale, a former Democratic state senator who was hired by the Walker administration to run the Division of State Facilities, said he didn't think a bidding process is appropriate for the sale of the heating plants. "A bid implies that there is a value in the physical asset," he said.

It's difficult to tell what kind of price they could fetch, particularly because of environmental liabilities. Several of the old coal plants are in potential violation of the Clean Air Act because they lack modern pollution controls, Plale said.

"Selling off the public's assets in a no-bid process? That's irresponsible," Hulsey said.

In a news conference this week, Walker declined to address the no-bid aspect of the bill, but insisted the state wouldn't rush into a deal.
And they didn’t – it took two more years for him to bring this up.

BUT – there was a problem then – that is a problem now

A Wisconsin utility leader and the head of a utility watchdog group both questioned why any private company would be interested in the plants.

"They'd be lucky to get one bid," said Charlie Higley, executive director of the Citizens' Utility Board, a utility customer group. "But the governor's policy is still wrong. No bid is not good."

And after the sale - utilities would cost more
Higley said he believes the state would be hard-pressed to find a lower-cost option than running the plants itself, because its borrowing costs are lower than a private company's, and it doesn't need to earn a profit on its investment.

"Any private company is going to want to earn a return on that investment, and the only way they would end up doing that is to charge higher prices for the steam or the electricity, and that means higher costs for Wisconsin," Higley said.

We all know Walker is mentally challenged from drinking too much ALEC cool-ade.
Let’s hope the citizens of Wisconsin are not.

Because if this goes as badly as predicted two years ago
Not only will the state not own their power plants
they won't have the money to improve their roads either.

The policies of the American Legislative Exchange council - destroying our states - one ALEC "model legislation" at a time.

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