More trouble for AP&T?
Alameda Power & Telecom may face additional financial problems in the near future, this time on its electric side. Looks like they’re having trouble with bonds issued on the power side of the house which, if not resolved, could cost the utility more than $500,000 a year. According to this staff report, the utility’s debt, which is securitized and sold, failed to sell at auction the last few months, helping to trigger a market disruption. The disruption could force AP&T to pay a higher interest rate for its electric debt, costing the utility an additional $20,000 to $50,000 a month as long as the disruption continues. AP&T’s contract with the financial firm that holds its debt lasts until 2010, unless the utility can find a way out of it. This news comes in addition to the utility’s plan to use $4 million of its reserves next year to pay escalating electricity costs. On a more positive note, it looks like AP&T’s telecom operation will break even for the first time ever, next year. (Maybe this’ll make it easier for them to sell?) The Public Utilities Board, which governs AP&T, meets at 7 p.m. tonight at City Hall.