4. Discuss, in detail, the controversy surrounding the Municipal Power Plant now known as Cleveland Public...

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4. Discuss, in detail, the controversy surrounding the MunicipalPower Plant now known as Cleveland Public Power (CPP). Thediscussion should include the major players involved and theoutcome. (Hint: there was a financial institution involved as wellas several others including elected officials)

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CLEVELAND Ohio Although cityowned Cleveland Public Power still offers lower rates and fees than its privatesector competitor FirstEnergy Corp that margin appears to have shrunken dramatically in the past 20 years according to one city councilmans analysis Councilman Brian Cummins who compared 15 months worth of his own CPP bills and his motherinlaws bills from FirstEnergy found that on average CPPs bills were about 10 percent lower per kilowatt hour than the competition a healthy buffer but a far cry from the 20 percent savings CPP customers consistently enjoyed decades ago In most months between December 2012 and March of this year the bills were only a handful of percentage points apart And during May and August of 2013 FirstEnergys bills had dipped below CPPs by 25 percent and 171 percent respectively Cummins shared his analysis with Northeast Ohio Media Group as City Council prepares to consider two ordinances aimed at resetting CPPs business model and ensuring that it maintains its competitive advantage despite prospects of paying abovemarket rates for power Both ordinances recommended by a cityhired consulting firm are on Mondays Finance Committee agenda and NEOMG will cover the discussion live in the comments beginning at 2 pm The first ordinance would allow CPP to offer commercial customers lower rates as incentives to either sign on or stay with the utility over a longterm contract The piece also would grant CPP the flexibility to help customers budget for spikes in energy costs by spreading payments over the course of a year Public Utilities Director Paul Bender told council members during a council Utilities Committee hearing last week that several of CPPs largest commercial customers have threatened to leave the utility if those spikes are not levelized The second ordinance would authorize CPP to refinance its current debt and save cash that could be spent on a marketing campaign or service expansion program city officials said during the hearing The consultants GDS Associates Inc projected that numerous illadvised investments and power purchases in recent years mean that CPP will pay more than market rate for energy for the See Answer

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