Quote:
Originally Posted by PhiLaw
Yes, agree with everything here. I will incorporate this into what I said. But I would also add that long term rates will tend to come down (barring other externalities). That infusion of capital for repairs and maintenance will also increase efficiency. I am only worried that there will be so many conditions in this whole process that we will see the initial rate hikes with no benefits long-term.
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I agree. I hope the sale is managed well. The bidding seems to have been managed well so far but I'm not an expert. In the Philadelphia area we've enjoyed some of the lowest energy rates around for quite some time and a lot of that was due to excellent management by PGW. I think the sale of parking in Chicago and the clusterf**k that resulted from that has made cities more careful and responsible in the sale of their assets. Once sold it's gone for good so I'd like to see the city get its value out of it. If conditions are set right there will be a long term profit ceiling that will keep rates reasonable in the future.
It's a shame that the money will go into the pensions, I think, because this is a once in a lifetime amount of money the city could spend on something phenomenal (mass transit in my view, or possibly water infrastructure upgrades) that would continue to return on investment for a long time. But I guess the pensions are pretty effed and correcting that issue could be used to stabilize city finances over the long term which might also lead to economic benefit. People will flip their lids when they see the rates increasing immediately after the sale but people don't know that the rates would have to be raised anyway if the city was going to continue (responsibly) managing the utility. Council will get exactly what it wants which is retirement money for DROP and somebody else to blame for rate hikes.
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