OPELOUSAS — The Board of Aldermen unanimously approved a 10-year contract extension Thursday with Cleco Power, allowing the company to continue providing electricity within the city’s corporate limits.
According to the contract, Cleco has agreed to pay the city $1.2 million for signing the contract, and $170,000 a month for operating and franchise agreement fees.
Cleco paid the city $142,500 monthly in operational and agreement fees under the previous 10-year contract.
However, the agreement does not reduce the costs paid by utility consumers to Cleco, something which some aldermen said should be considered during the early stages of contract negotiations.
Cleco district manager Marty Smith told the board that the rates the company charges customers for electrical consumption have declined in past months.
Smith estimated Cleco is charging its Opelousas users 10 cents for each kilowatt hour. Smith said electricity bills are determined by what it costs the company to purchase fuel.
The city and Cleco began contract renewal negotiations late in 2009.
Cleco’s current contract with the city was scheduled to expire Aug.11.
Mayor Donald Cravins, Sr. said he isn’t pleased with the terms of the extension.
“When someone asked me (on Thursday) whether I was happy about this, I told them unequivocally, ‘No.’ This is just the best deal we could get at the present time,” Cravins said.
Frank Trosclair, an Opelousas attorney who negotiated the final terms of the contract on behalf of the city, said the agreement is better than the previous contract the city signed in 2001 with Cleco.
“I think the city was able to do as much as it was able to do with what we had to work with,“ Trosclair said.
The contract requires the company to improve reporting procedures for maintenance work performed on power lines; create a recovery fund to pay for storm damages; and to provide detailed reports on customer usage.
Trosclair said the contract does not address allegations the city has made over the past several years that Cleco erroneously billed it $9 million for repairs the company claims it made to the electric lines owned by the city, and costs for system repairs the company says it paid after storms and hurricanes.
The city has contended that the contract it had with Cleco at the time said the company had to pay those repair costs.
Smith told the board that Cleco will attempt to help the city recoup the costs of previous storm damages.