Utilities Overload

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Utilities Overload

At the demand of Media General, I've pulled all of their material (Bristol Herald Courier) from this website. They maintain no online archive, they let me do it for 10 years. The article Utilities Overload was published Dec. 9, 2004 and I will summarize the article with some comments.

It concerned a women named Ruth Pope. In May 2004 her CATV rate jumped 12 percent, in August her water rate exploded by 22 percent. Bristol, Virginia government gave the utility the power to raise sewer rates 4 percent annually in July 2004. Then she got nailed by a 38 percent rate increase for electricity. She said, "I don’t know what people are going to do, It’ll really hurt me. I’m trying to get a smaller place."

According to press reports, all of this will cost her another $30 a month. She said, "I wish they wouldn’t go up on nothing because medication and everything else is going up already." She is typical of many of the Bristol poor.

BVU president Wes Rosenbalm tries to avoid rate increases. (I saw him really catch it at public hearings.) In this case, they claim it's cost increases, and he still denies cross-subsidizing Optinet, their risky taxpayer funded venture into CATV and Internet. To quote Wes, "In the state of Virginia, cross-subsidization is illegal and we are not involved in it." He pointed out the cable rate increase as proof.

Sprint (Comment: Sprint has bailed out of telephone here turning it over to something called Embarq.) has accused BVU of charging artificially low prices and cross-subsidizing. (In the end, the state hearings, etc. came down in BVU's favor. BVU has not been cross-subsidizing, but has been borrowing off the electric part of the Utility, driving up their debt in the process and spending millions in economic development grants to cover losses.)

The main controversy in the article was not informing the public fast enough and hitting people with so many increases at once. (Comment: after being savaged by the public, the Bristol, VA City Council has taken steps to see this doesn't happen again.) What they also did was give BVU power to raise rates in advance, but in increments. To quote BVU/Bristol VA lawyer Jim Bowie, "As a ratepayer, I think it would be better if you put an inflationary regulator on the rate." (The City lawyer is also BVU's lawyer.)

They went on again to claim, "The people of Bristol Virginia saved $74 million over the last seven years because of (the Cinergy) contract." Bowie went on to claim BVU is a member of the Blue Ridge Power Agency whose "members face rate hikes of between 40 percent and 70 percent in the coming months." (Comment: that $74 million in savings did not go to electric customers. As I understand it one-third went to BVU, one-third to float a City spending spree, and one-third to customers.) Their contract with Cinergy expired Dec. 31 2004. The new rate then would be $71.75 per 1,000 kilowatt hours, it remains below the national average.

Comment: while it true this is below the national average, to quote my page Social Apartheid,

While Sperling (www.bestplaces.net) cares little for working class issues and more for retirement, they do reveal some terrible trends. The national per capita income is $21,658, but only $13,472 or almost 38% below the national average for Bristol, Virginia, while the cost of living is only 16% below the national average. National household income is $44,958, but for Bristol, Tennessee is $33,380 or 26% below the national average, while the cost of living is only 10% below the national average. For Bristol, Virginia household income is 32% below the national average.

Comment: BVU has been blasted for its high levels of debt, between $50 and $70 million, nearly all directly or indirectly caused by Optinet and the new building to house them on Lee Highway. To be fair with BVU, even though where I live I don't get Optinet services in Washington County, VA, my internet provider dropped my rate from $19.95 to $9.95 to match BVU. That does make up for the almost $10 added to my power bill servicing BVU's debt load. Since 2005 and Appalachian Power, they are now going back to TVA as of 2007. Also as of Aug. 2007 there have been none of the promised new jobs created. Lewis Loflin

Travelocity: A warning for region? Travelocity.com got about $10 million in corporate welfare and decides to dump Clintwood, Virginia for India. Congressman Rick Boucher (D VA 9th) calls this a success story and that he deserves full credit. Companies like Sykes and Travelocity are dumping rural America in droves while the local press asked why Congressman Boucher never saw it coming.

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