WWL>Topics>>The Think Tank 1210pm, Purchase of Cleco

The Think Tank 1210pm, Purchase of Cleco

Feb 19, 2016|

What would you think if your utility company was the target of a takeover by a foreign-owned investment group? Most utility companies are monopolies in their areas. No choice for the consumers. Now imagine a company leveraging a buyout which would mean a large debt that would be passed on to the consumers. Could you afford to help finance the cost of a buyout on top of your utility payments? This hours guest: Darren Olagues - President of CLECO Power Casey DeMoss - Alliance for Affordable Energy

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Automatically Generated Transcript (may not be 100% accurate)

And welcome end to these third and final hour of I think tank Friday stopped glad to have you with us as always our fault lines remain open for years telephone calls that final four. 260187. We also have an instant text board that comes in here in the studio. I just one rule of simple rule please do not text and drive we actually detect responsibly. If you're going to be driving use a designated text if you texting using designated driver. We also have a ready opinion poll question up for each hour. The one that we have now is so on the last topic we talked about. And now that more review maybe have a better understand because I certainly did not about protest votes by leaving ballots blank. Would you ever cast a protest vote believing a ballot blank in which you go out to. I'll vote in gnome one of the issues of one of the Canada says running on election you choose to leave it blank in protest it's actually counted as an undervote. Didn't realize that would you do that 58% saying no they would not. They gonna go in and vote they get a vote for some that some 42%. Saying yes. I'd this hour we cannot change topics but it does involve saint Tammany parish with who were just talking about that that issue for term limits but it also encompasses a a greater portion of Louisiana we're talking about we eco. Possibility of a buyout of clinical central. Louisiana electric company I believe is with the acronym is. Here to talk about more as the president of legal par Daryn only get status. In incorrectly you are and you get an elderly and guarantee an element here than up and are now my name either. Darren if you would Ellis prompted the sale of legal. I'm look not said this many times that we did not real quick. I we. At the public company you know we ought we often like Michael copy most companies. Abbott outlook. What we think about our growth possibilities. And industry challenges that are banned openly in the public company think about our stock price. Is the border can be. As we did that. And we. You know film. Perspective about the possibility I'll grow up. We also had an incoming interest in the company. And I can go into why a that the trend in the industry about acquisition. Of regional utility likely go the week we did get incoming interest in the company. And like any public company we have a fiduciary duty to our shareholders. To consider. What we think we can accomplish sort of in our standalone bit against what could get it through the price that was offered. And that was the first test on the will we looked and basically saying who we think we can accomplish on our own. First is what we think the value that's being offered. But look make no mistake in the public utility. We have a very unique role in the community we spoke to our employees. And our customers and the communities that you are partners in where they wanted to community. Until wasn't just about price. We thought about. What to do this would look like after closing it would put just about Christ the only check that we. It would it is the right thing parole the other testicle. So we then went through a process to make sure we had the right there the voters which we think we do hear that. We have the right and the commitment to our customers to leave that to our community. And ultimately. Put together a package that we saw a week ago at an independent company. Committed to the community is committed to Louisiana and yet it was a big price that being paid by the acquiring company. But we think when you package altogether it is right now com or optical. Who is the potential buyer and it what stages of transaction is your deal done or distill and. Well who would that mean they often get attached to worry. An investment group go to their their pale or an aggregate or investment dollars color of money manager people think of it grow pearl. As well a couple of other court one court at the Canadian. Fund and one is John Hancock insurance company building that we. Primary owners of the company. Well we're in the process that we are people in the crime we have received all the regulatory approval needed including. Cheryl. And all the remaining approval and like getting a lot of air time the is that there is they'd vote scheduled next Wednesday. Or connection. Which is sort of the final vote needed to Sudan couscous to closing the panic expect. Sometime in late march. So we are at the end of the public service commission rightfully so they can mayberry or look at the seventeen month. We think it they have cause of the deal could get better and stronger for the communities and employees. We think you know the deal. The terms of the final deal and that are being put in front of them week. We think it is a great deal one that in the public and on all get a group. All what is an incumbent upon cleat goes to prove on meet criteria set by going to Louisiana public service commission on an and the grand army. Yeah they're they're they're concept called the it basically it is theory. Consideration. Designed to determine whether. Whether there is. Harm that is being done to our customers and therefore is in the public interest or not. Me in the sense that it is a very broad concept. The commission a lot to latitude to consider not just about our customers and think about. Community who are you cool you can go wide. Latter should explain to consider. And so what it would be an incumbent upon us is to make sure that we put a deal on the table when there. Clear. That a term picture that utility could go power is not formed. In their for the customers. It would not be. I come back at the communities are equally all been considered so we have to get a list of 77 commitment. One of which includes a 125 million dollar rate credit back to our customers over the next fifteen years. In the 77 commitments are designed to basically address the actor. And we think that we not only. Just not that there's there's not only no arm to customers into the communities and obstacle but what we think are significant and. A seat. Down if you stay lunatic a break Q we come back immediately following our interview I'm gonna have someone on represented from the you know the alliance for affordable energy and issue you familiar with them in kind of guy I haven't spoke to a but I kind of have a list of the things they're gonna bring up an unlikely you'd address those we come Africa I'm going to arrive back would talk with Darren legacy president of eco parish are cyclical power. About a potential buyer out of this Louisiana power company and be right back you listen to the think tank Friday's. Now walking back in Friday think tag W with Hewitt talking about the job possible buyout of Kelly go. One of the largest power companies and oldest in the state of Louisiana with us to talk about this is down on the latest the president of the eco power. I'd terrorism mentions. And immediately following are interview we're gonna have represented from the alliance for affordable energy to come on. And basically what you described was that the sale is too satisfied that the shareholders in all the stakeholders involved. And as a firewall Louisiana public service commission has to grant a permit for this transaction to happen. But here's what the two affordable energy you know alliances saying the reality is. And I'll take these one at a time for you they say that the customers will see significant rate increases and still get the same service. Yeah the meat and we just be very clear and under the alliance well there there there have been a part of that process. Beaten. They or you know having opposing voices in regulatory Crockett is welcome good. That being that. The alliance is clearly ignoring. The the public's orbit the work at the public trust commission had done in ensuring. Unequivocally. That there will be no increase in customer rates as a result back there. In fact I mentioned earlier there's 125 million dollar record. We've agreed to give. Plus another eighteen million dollars others savings were all under forty million dollars savings over the next fifteen years that we agreed to give. To the customer. So this idea that this is gonna cause. The customers are called an increase that rate at the result that the transaction. Is just simply not true now where the where the basis. I think not to speak to them that they. Widely sort of crop this issue. Is that bit dead as part of that the acquisition. The donor organ and borrow money and not a common thing. That borrow that that borrowed money will not be sitting with inquiry go our it will be in legal terms green prince away from the quick so our. And have no ability to come back to the coast. They are making the argument that well that might beat case it. We don't know occult gonna come back account a what are the public service commission to step in at the turning up looked at that great beat. And agree that there is absolutely no chance. But it can come back onto the customer so you know I'm on this point Donna wood that it will be no increase cost rate as a result back. In fact it will be reduction. Pride they also say that in a basing this on what they've seen in past transactions and cards similar to the one that will involve actually go. They say astronomical waiting period that the jobs are outsourced creating increases in joblessness and unemployment in towns relied upon the utility companies. As an economic driver for their communities and I can tell you I'm not likely go custom of the basically right across the road. There are legal because we often laughed because sometimes their lights will be on a model be awful by terrorism that anyone connect deep. Well is different companies that any rate I've got a lot of personal friends who have no work simply go. Both in management and also lower level positions and involved in their phone number of years and they aren't good today and certainly would be a loss to the community to lose those jobs what is what is with that. Recruitment it would very proud of our reliability record. But on the jobs issue midget. Major address because one of the things that we commit. Is committed to keep head count basically where it is right now 12100 odd people. Or at least five years and which often bring the question would be to a five to. Go. He let me address that and somewhat of a broader context. One of the big banner. Of this transaction and the transaction would do is we're not being bought by another big key in the within the union in. And then be subjected it to job reduction. What we're simply going public company to a private company. Still headquartered in on do we still serving the English or in the same way that we always. We don't have the ability to give it more people. The commission public service commission would have the ability to reduce our rate to try to do something like that. Do the job commitment. Yes we've agreed five years but look. We were even 12100 people run the company for the next ten years the next fifteen years this site you will start. Headcount. After five years because you can benefit the annual. Asia not really understanding how that regulated the networks we started the current head. We would help. Me reduce call and then we would get that back to the customers so it's that the panel that we constantly look at. But I would you know pretty right now we needle 12100 people to continue to keep a light on in Mexico utility. Indeed quicker that we that everybody expects to be. And I don't expect an accountant took her. Now they also alleged that the revenue. And again the judge in this on past transaction would be funneled out of the state coffers and shipped overseas and I guess that. Meaning that because the ownership lies in areas outside of the United States and foreign interest that the money would be going there and would not contribute back into the the ripple effect and stay in the community. Look a true interest thanks so you know that that is born that worry is often considered an Australian company. Mentioned a Canadian and on and and I think they're. Sound good around the water cooler look these guys that care about what we you know. To pull money out and not in that back in communities. Which is. Certainly not the case. And one more I can point to make it on its interest in you have to know who want quick now which a lot to pension fund. Headquartered all around world that we won't quicker now. By the way they agreed to sell it to failed companies with little ironic. Took took took it to ignore the current ownership. And and and and and believe that they all are. They are the only one Google should dial the Greeks come. We're gonna go back to Britain to the new law. Look the that the people that are managing the company and capital will Q animated company. Will be people in the media. Our our management it will continue to be. We have committed to. Way that we you know board members. Our commitment to Louisiana is greater now that it is our spa. Good idea that there are going to be sucking money out of what we have is simply topic. Today we issued dividend to our shareholders. Which go all around the world tomorrow we will continue to do the same thing. What people should be concerned about it that we will continue to communities. And that make ensure that we safe reliable power cost competitive rates. And out of the commitment we made the commission. The commitment I'm making right now that something that we're gonna continue to do so yeah I feel good about the new ownership group and their. Well I'm thinking that most the residents to customers are going to put a lot of faith in the public service commission's decision is just somewhere people can go online and take a look at the what the commission has done so far as far as sending the regulations in criteria for a the sale to go through. Yeah to me there's too quick to warn you do week in a public commission web site. I would docket or their sort of proceeding with the ball at the public filing court along with. You can also go to our web site. Would settle into it as a number also public document gonna go have gone longer. This proceeding as well. Just a few days ago the administrative law it's sort of one on bulk regulatory milestone in this process prior to the public service commission vote. That judge came out with her opinion. Which we can lead the road map toward a cool next week but it probably the most lipstick view of the transaction. It's someone want to go in in fine and that is on our web site in the culture which clips. Daryn one last question the the the alliance for affordable energy also asserts that the clique those CEO is gonna get a 25 million dollar bonus. If this acquisition is successful now while that may sound very extravagant I don't know what's involved in any mayor and every nickel of it first of all is it true. And what is involved in him and why wouldn't be such a bomb large bonus to make the center. But it did clear to. Where by the number at their current CEO. Will not receive 25 million dollars the kind. They that number has been distorted in the hole bunch. I'd rather not get into exactly what the with that amount is what is fraction of what this transaction goes through or not. At the with the current field will be. So is it in it could attribute it to night what are cooler. Can talk about what is simply not the case and that it. Should. With a lot and make it whatever the number we have agreed that our customers. Would not there and he expect associate district and actually what the government can't. Act the or anything of that nature. Assi Darren thanks so much has been at a time clearing up some of these issues really prevented our. Thank you I'd Daryn all legacy of president of legal now we come back after the news will be joined by Casey DeMar also for the alliance for affordable energy to talk about. There are answers to some of parents stay this will be right practice. Welcome back into the think tank though we're awaiting us to talk with our next guest from the alliance for affordable energy Casey did moss denying there was a meeting that was held in Madison bill. From the town hall meeting last night. To discuss. And get local input about the clinical takeover of which the alliance for affordable energy is opposed to borrow a lot of the reasons if you would just tuned in for the news. We had the president of clinical power on to address some of their concerns as forest. Customers singing. Significant rate increases while not getting any better service. Also about because this will be some foreign interest that. Jobs would be outsourced in the on the would be some. Loss of employment is some of the towns that rely on the utility companies does his economic drive initially communities and I can tell you that. Nikko employs so quite a few people in my neighborhood him. The good jobs do well paying jobs in the although you know you concerned about that happening. As Darren legacy is the president he says that you know they can't operate with a minute lesson with they've got now anyway so that was pretty much guaranteed employment. As far as who those people along with a come from well that could be up for discussion also on going to be checking into. Louisiana public service commission's website and trying to get some information from them on on exactly what the criteria ism if they will actually hold it. Their feet to the firing honoring some of these things that were expressed to us. And there is. A decision that's gonna come down by a vote on this of the Louisiana public services is the last. A nails so to speak in the coffin. Of look legal being owned by its current ownership that is scheduled for Wednesday February 24 and has very soon. We did try to reach out to Eric's command and Louisiana public service commission of vote was unable to get ahold of him to. Get his opinion on this too and I think that would have been valuable Mario gonna take a quick break and we'll be right back after this and hopefully we'll get talked with them. Our guest a case in the Mars if not will open a phone lines do you what do you think about. A buyouts of our company's good thing bad thing for the companies and what about the consumers Bible for. 2601878. Got some techs come in and I'll share those with you and 87878. And Estes. And welcome back to the Friday edition of the think tank. We're talking about does the possible buyout of cleat goes there's going to be a vote taken next Wednesday February 24. But the Louisiana public service commission on marital lakers who was the I mean basically the president of political power company here in Louisiana said that this is the final step in getting it through. An organization that is sending out some concerns and warnings about that zeal lines for affordable energy. And Casey to moss now joins us Casey thanks a meaningless. Thank you for having me honored. If you would Casey tell us a little bit about lines in Portland. Yet there where accurately in the nonprofit organization. We are consumer protection group advocating on behalf. Utility customers. Are making it there affordable environmentally responsible energy helping. And that healing can afford that he'd like bill adopted in that it near the power plant aren't old ex stripper. Very good there was a meeting held in Madison bill last night regarding this asking for a local community input would you or anyone from your organization tennis there NTELOS. What the discussion was like what went on. Act and act and do it right are the hole and Aaron. It predicted the and there are a lot of people that credit you who began to line. You'll pew here the day. And don't think that. Enid quick and police are being. And not treated very well I'd hire. Aaron you know cricket with a great company is very financially or. And commission. Treated again with a lot of respect. The people that month the company at at least you know program. Company until the Ian very little friendly oriented very teeny intent. On hill. Lately came on board then people say the whole feeling of the company shifted. And what we know now is that William and retired for he transactional. In the at that they won't just how cool and the leader accused in the works for years. And we believe it's because. The board at creek. I've been looking for her you know to walk away. Attempt by Ian. In fact a portable petroleum and Tierra. I clip of the panel will luckily on the fifteen million dollars. And the shareholders will walk away with the Al 435. Dollars. And what apparent goal that cut tailored. Eight collects two dollars per month for the next fifteen years. Well I asked dom. Ms. stone only gets about that wanted to and it listed as 25 million dollar bonus for the CEO when he said that information was totally inaccurate. It was a much smaller number than that but that I guess that. Knows their business. Now I did bring up some of the other concerns that you had to him and I'll tell you what his answers war. I'm not only once someone is about a para buyout of the company the first person would be effective I think they would be would be the customers what about there rates going to have a you know for the the amount of money that was adoptive you know to buy the company out. And he said that basically there will be no changes in the rates at it was a 125 million dollars of rate credits go back into it. Plus another eighteen million making a 143 million dollars put back in two and over the next few years. Which would prevent any rate increases from taken place. Well let me paint and then that I wasn't allowed to par you are eating it. That the alliance partners you were under attack order and could not. Legally. Communicate this Jerry couldn't be helped that a proper and decades. That accompany inquiry. Panel wants to double. Dare Ernie from the capitol in eight to pull her. So right now we ever had about cheap clean nine billion dollars a year in earnings and when that five point eight. And they are saying that it can read re. They're not where. And I'll show going spew. Hate Al. If they're not able to make all of it billions of dollars in these capital expenditures. At the net they neared an account Bullard. They themselves didn't. And they during the flight attendant and other utilities that they are just in America. And companies that. At acquiring. Period held accountable. Loading the debt. In. The company. We know that inquiry and came to shallow creek and it took ten years. This position that. They're saying that not every race background. Well either they would have to raise rates or cut back expenses to increase the net earnings in the profits or a combination of both both of which he said would not happen. And that those would be guaranteed by the Louisiana public service commission's oversight is that true. Well actually borrow and they have been scaring them achieve that in there and quality. Two way that the commission did she respond should that with Tea Party path to a collector quality cricket and which meant that the commission in January acceptable. I guarantee. That cricket current employees with job. And that had Carter would stay and kind. At that it's something that and the car race that has been claiming they were going she can net you. That they wouldn't make these changes for five years. After that there's no commitment. True. He in Harry tool president elect. That that guy and I think he's that good guide to the bickering and the board. Not an arc and not had the best interest at their picture in Bahrain. Until woody sideways that. They were at Q. So do I need to take a break anyway so you get to yeah. And we'll be right back to pick it up writing New Orleans and off illicit or the think tank Fridays now good afternoon from the big 870. WW. And welcome back into the think tank on allow this is Casey to moss spokesperson for the alliance for affordable energy would talk about the potential buyout of legal one of the oldest and largest. Companies in Louisiana. Casey don't need to be intimidated you know we only 238 states and all over the nation by line. Up. That. Just to refresh peak oil off to those who just tuning in now we're talking about this potential buyout which is gonna come down to a vote by Louisiana public service commission. Which clinical says won't guarantee that there will be no changes in employment because they've got a five year guarantee. Plus they got a 1212100 people that they desperately need to. Accomplish their mission they also say that a total of 143 million dollars in rate credits packed in for the next fifteen years will prevent. And increases which of course all the customers would be. Opposed to a concerned about and rightly so because tonight giving any better service. This is not liking normal buyout of any private business because basically electric power companies all monopolies and they are regulated. By governmental agencies which is only right because you'll have a choice to call somebody else likely echo what somebody else's electricity. Either got to provide Jerome power on goal with though. All that being said. Give you the Mike for the rest of the time Casey what should you tell people have to make their own decision whether this is a good thing or bad thing and they. Do or don't like it who should they let that that there opinion BR. You act acting attorney at the alliance partner like a legal thing to release the panic and forward. Another thing that we are allowed to believe that we are now is the hacked it. McCarty is and in preparing at that they try. Their customers. Are they in general and and then not. Paid their taxes. Keep it they that they hot patent apple. And that is about at 630 million dollars each year we attacked attacked issue. And retain years. 300 million dollars. They are offering me credit at a 125. Even just looking at the tax issue. Customers are paying more lower than what they're getting. Now if you stand to look at the 88 K back and debt. And the car went to pick on to the company and Oakley. Which right now they dairy company very well rated that the credit pre. And that amounted dead calculated. Is about 121000 dollars. Her Cutler. Half would be paid back. The party take that would copy lean and a couple more cage. Which really entered the first after a certain number of years. Lean look at the have to restructure that debt. Whitney did this this restructuring that. Their Puget Sound Washington State. They re section 300 and they tacked on and ignorant and hate that directly. To their racquet back. You'd get to patent. Even the kind of financial scheme. That a private equity firm is great at its scientific and that we is here can and without public monopoly Chile as he said. You are hacked into customers'. And in fact been higher value. We go in there and clean. And they're accurate. There would be a creek if there weren't. These great athletes. And their correctly note. The cooler and CN. Trying to take that badly that they did not create. And take it for an. And given kicking the Friday are a publicly traded. Comfortable. Into private hands there will no longer be. Public shareholders. There's a lot of change here and the issues there. That we agrees with recognition. That. We don't know what they're there they also. Intended to treat beaten new shell companies layer upon layer currently and a shell company on the filed in Delaware. It says some eighty people are saying. Eat meat kick it and then enormous amount of effort to keep these peak hill under wraps. Hello and luckily we were able to get beat eat out to the public and I would say at these Ito or disturbing. To you. Please contact your commissioner. And vote on Wednesday. Next week at separate force. Their public service commission regular meeting. Didn't say that the true. I said. There's no going. I would highly encourage people. If you Chinese people are considering that we do you. That you made recapture commissioners he can find out more information about an hour. As ever or to report. And he kind went say it Debbie Debbie Debbie dot com all our energy dot port. EL Albert I had also in the GW. Black K the number four and honor. She lied to act and actually and it Alcatel our community pool. About it Casey thanks so much for criminal was really appreciated. It. We UB better next time and look forward. And thank you. I'd that's gonna wrap up this Friday think tank I'll be back in let me down sixteen hours 5 AM for the outdoors show hunting and fishing in ball what a great look and weather weekend we got. Hope you'll enjoy it so unit.