Mayor Steve Bach's call to consider selling the city's electric utility is getting attention from some heavy hitters in the financial consulting business.
In the last month, Bach has heard from international firm Lazard Ltd., and a Texas firm with a link to the famed Hunt oil family, among others, according to records obtained by the Independent through an open-records request.
Bach has not responded to the firms, a city spokeswoman says in an e-mail. But earlier this year he acknowledged having met with Xcel Energy, a Minneapolis-based company that provides power to a good portion of Colorado.
The idea of selling Colorado Springs Utilities' power division — which would require a public vote, according to the city charter — has prompted much debate inside and outside city government. Two weeks ago, developer Steve Schuck hosted a private meeting of local business people to discuss the issue; Schuck says a sale could raise money for other needs, notably stormwater management. Other business people oppose a sale, citing Utilities' low rates as a drawing card for business and industry, such as data centers ("Earning power," News, Sept. 25).
City Council, sitting as the Utilities Board, has directed its Utilities Policy Advisory Committee to research a sale. Whether an outside consultant will be hired to help isn't clear.
Lazard, with offices in 27 countries, proposes to analyze the value of Utilities' electric division, much like it did for city-owned Philadelphia Gas Works in 2011. In that case, Lazard concluded that selling the utility would yield a profit, as well as bring tax payments exceeding the $18 million PGW pays the city annually. In August, the mayor there chose two investment-banking firms — including Lazard — plus five law firms, two lobbying groups, and two public-relations companies to help the city with a potential sale, philly.com reports.
Lazard also analyzed financial matters for Long Island Power Authority. Those proposals, totaling 184 pages, were sent to Bach and are available here.
Lazard has worked for governments at every level, says Lazard employee George Bilicic in an e-mail to Bach. It even served as adviser to the U.S. Treasury Department on the recent initial public offering of General Motors.
Fred Joyce of Burlingame, Calif., a former Springs resident who served on the city's Telecommunications Policy Advisory Committee from 1995 to 2001, pitched the ability of him and his partner, Robert Picchi of Blue Ridge Advisory Services Group, to "assist the city with an insightful evaluation of the current status, and challenges facing the city, regarding the CSU issues currently being discussed." Joyce has consulted for Arizona Public Service, Louisville Gas and Electric, and Qwest, according to his résumé.
Meanwhile, InfraREIT Capital Partners LLC of Dallas told Bach, "Our mandate is to help meet the demand for new infrastructure by investing in utility assets utilizing our innovative REIT Structure." Among its investors are John Hancock, a life insurer that manages $262.2 billion, and Hunt Consolidated, funded by Ray L. Hunt, who forbes.com describes as the son of legendary wildcatter H.L. Hunt and owner of Dallas hotels and office parks, 400,000 acres of ranches across the West, and oil and gas fields worldwide.
Also turning up in the records request were e-mails from a handful of residents expressing concern about a sale, such as Glenn Grose, who shared his belief that an analysis "will reveal the incredible value CSU provides to the community as a municipally-owned utility."