- Published: Tuesday, 04 January 2011 11:25
The City of Fort Wayne and Indiana Michigan Power (I&M) announced today that they have signed an agreement resolving issues surrounding the conclusion of the 35-year-old City Light lease. The agreement is subject to approval by Fort Wayne City Council and the Indiana Utility Regulatory Commission (IURC).
The agreement, if approved, would end ongoing disputes and litigation between the two parties and confirms I&M as the exclusive electric service provider for Fort Wayne customers. Currently, a lawsuit over the matter is pending in Allen County Superior Court.
Under terms of the agreement, I&M would pay the City a total of $39.2 million over 15 years, with $5 million of that coming as an upfront payment. In exchange, the City relinquishes all claims to serve as the electricity supplier in the Fort Wayne area and transfers the remaining City Light property to I&M.
"Today is a good day for the people of Fort Wayne," said Mayor Tom Henry. "The City of Fort Wayne and I&M have come through many months of intense negotiations, but our mutual commitment to this community kept us focused on finding a positive outcome. This settlement will strengthen Fort Wayne and better position us for economic growth. Not only does it provide an important income stream, it ensures that I&M continues to provide quality service to the area."
"Fort Wayne has been the corporate headquarters for I&M since 1948. This is our home, and we are pleased that we have an agreement that resolves our differences and allows our customers to continue to receive I&M's low-cost, reliable energy," said I&M president Paul Chodak III. "In addition, local business leaders and economic development professionals will continue to have I&M's strong performance record as an asset for attracting and retaining business."
Although the 35-year City Light Lease expired on Feb. 28, 2010, the two parties agreed that I&M would continue providing electric service pending the mediation of their differences. Mediator John Whiteleather, under direction from the court, conducted extensive mediation sessions with I&M and the City to help bring the parties together.
Under the agreement, if approved:
- The City acknowledges that I&M will be the exclusive electric service provider in the Fort Wayne area.
- The City will transfer its electric utility property to I&M.
- I&M will settle the City's claim for damages under the electric service area statute.
- All Lease obligations will end, allowing the City access to the City Light Trust Fund, built up by the City over the 35-year Lease term with a balance of nearly $36 million.
The agreement will be introduced to the City Council at its meeting on Nov. 9. City and I&M officials plan on holding two information sessions/open houses for the public to hear the details of the agreement. Those meeting dates and times will be announced shortly.
A petition seeking IURC approval of the settlement is expected to be filed in early December.