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Wednesday, July 23, 2014

PILOT is bad idea

Sunday, January 19, 2003

The premise on which the Power Station was developed is to keep the price of power low. This has been done very successfully for the past 20 years, keeping the rate less than 6 cents per kilowatt, which is reflected in our utility bills.

Here are some logistical reasons why it is not acceptable for the PILOT amendment to be passed by the citizens of Sikeston:

1. Loss of power sales due to PILOT charges - The Board of Municipal Utilities has been notified that there is a strong possibility of losing $15 million annually from one of the largest sales contracts if the PILOT amendment is passed. Other contracts would likely follow due to breach of contract suits.

2. Lower bond rating - Those lost revenues from contract sales losses would in all probability change the BMU bond rating to a level unacceptable to the bond holders who are the owners of the Sikeston Power Station. This may result in the insurance company taking over operation.

3. Loss of jobs - Bond holders could be forced to sell or close the facility due to the lack of experience in operating and maintaining a power station. This would result in loss of jobs, not to mention revenue and possibility double or triple Sikeston's utility bills because the power would have to be purchased from another entity with higher rates.

Yes, a quick fix to Sikeston's financial requests would be to tap into gross revenues, but the long-term effect would be to receive 3 percent of nothing. Furthermore, the existing free services that are now being provided by the BMU (namely free power supply to city parks, light and water to municipal buildings, incremental funding to special committees, funding Sikeston's Economic Development payroll and funding the "Land Clearance for Redevelopment Authority") annually would be lost.

I encourage all citizens of the City of Sikeston to learn all the facts and then vote "NO" on the proposed PILOT amendment.

Stan Pace