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Dennis Kucinich criticizes consultant’s assessment of Cleveland Public Power: Mark Naymik Reports

The former mayor says the city should reject any suggestion to sell the utility.

CLEVELAND, N.C. — Former Cleveland Mayor Dennis Kucinich said a consultant’s assessment of Cleveland Public Power shows the city is considering selling the municipal-owned utility.

Citing a document published exclusively by 3News on Wednesday, Kucinich said a consultant offered as options for managing the future of the utility privatizing operations or selling it.

“The city cannot place responsibility for the outsourcing and/or sales option on the consultant,” Kucinich said in a statement. “The contract specifically called for a working relationship with the city throughout its term. The city was privately considering a sale as an option, as reported by the consultant. Given public power’s history in Cleveland, this is a serious breach of faith. It is alarming that the administration attempted to conceal this from council and the public.”

Kucinich referred to pages 8 and page 37 of an 80-page document by NewGen Strategies and Solutions, a consultant the city paid more than $1 million to examine the utility and make recommendations about future operations, including possible rate hikes.

Cleveland Mayor Frank Jackson’s administration has refused to share the document, completed in May 2019, and its existence and was out of sight until 3News exposed it last month. Cleveland City Council, the watchdog of the utility and Jackson administration, was not even given a copy. 

The Jackson administration has told council and media outlets the consultant's document is an incomplete briefing, contains trade secrets and recommendations not fully vetted or embraced by the utility department officials. As such, it can’t be shared. 3News published an unredacted copy of the assessment Wednesday. 

The city has never publicly suggested it is considering the sale of the utility. In a recent council utility hearing, administration officials rejected even the idea of allowing the consultant to take the lead in managing the utility, an option also discussed in the the document. 

Kucinich’s two-year mayoral tenure, from 1977-1979, was marked by turmoil and his refusal to sell the city-owned utility as an option to head off default. Kucinich argued at the time the utility should not be sold because it would save customers collectively millions of dollars in in cheaper power rates.

But today, the system charges its residential customers rates that are 10 percent higher than the rates of its competitor, the Cleveland Illuminating Company. The consultant’s assessment, which the city has referred to as briefing document, paints a dire picture of Cleveland Public Power’s financial and operational condition.

Kucinich said he believes the utility is in better shape that it appears in the assessment.

“CPP is sitting on a surplus in excess of $30 million,” he said in a statement. “The city’s rates are already an average of 13% higher than the area’s private utility, yet the city paid $1 million for the current rate study, and plans to spend another $2 million for a second utility rate study, while secretly preparing to push a series of double-digit rate increases adding up to 38% higher. The consultant’s report shows they don’t know how to manage the system, so they’ll consider getting rid of it.”

Kucinich, possibly hinting at campaign for mayor, said he’s prepared to launch a campaign to save the utility.

“As I did more than 44 years ago, I am once again prepared to rally with like-minded citizens in the cause of defending the institution of public power from sale, lease or outsourcing, in the interest in keeping utility rates - - and taxes - - low,” he said. “When public power is protected and strengthened, the economic well-being of ratepayers, taxpayers and businesses is protected and strengthened.”

This post will be updated with a response from Jackson’s office, if and when it responds.