Letters detail light lease debate

FORT WAYNE, Ind., (WANE) --- - Indiana Michigan Power has launched an aggressive campaign that fires back against the city's plan to find a new utilities operator. It comes in the form of a letter sent directly to customers now that I&M's lease is almost up.

Both sides have yet to reach a deal, and now, the debate over who has the "right to serve" the customers is heating up.

"We really did think it was important that customers knew the issue. There's a lot of stake," said Indiana Michigan Power Communications Director Susanne Moorman Rowe.

The letter gives a brief history of the current light lease talks and about what would change if I&M is replaced. It also touches on how the change could affect consumers and their wallets.

"Writing a letter to the customers was the best way to make sure they had the information before them," explained Moorman Rowe.

The city leased its electric utility to I&M back in 1974. The lease expires February 28, 2010.

When the lease began, I&M took over the roughly 30,000 customers the city was serving.

Since then, the utility company says it's made about $86 million dollars in upgrades. The city would have to reimburse that money if both sides cannot reach a deal on a new lease.

Moorman Rowe says, "I&M was granted the right to serve the customers in the Fort Wayne area in 1980, so we do believe by by virtue of that law that we are the service provider and we've been doing a good job."

Negotiations between both sides apparently broke down earlier this summer. In June , Mayor Henry announced he's opening the bidding process to find a new utilities operator.

It's not clear what caused the breakdown in negotiating a new lease, other than the fact that a "fair price" hasn't been reached.

Moorman Rowe tells NewsChannel 15 the company's even made three offers to buy out the lease. The city hasn't accepted any of them.

I & M says if a deal can't be reached, costs could go up for customers.

City officials declined interview requests about the subject Tuesday, but Kumar Menon, Director of City Utilities released this statement:

"When the City is prepared with its next steps, we look forward to talking with you about the City’s electric utility, a valuable asset that belongs to the citizens of Fort Wayne; the lease situation with I&M and where things are on this important issue."