State commission approves Vidalia bond request
Published 12:00 am Saturday, June 23, 2001
VIDALIA, La. – The State Bond Commission on Thursday approved the Town of Vidalia’s request for permission to borrow $4 million to pay for power it must buy from Louisiana Hydroelectric.
&uot;They approved it with no objections and no additional questions,&uot; said Town Manager Kenneth Davis. &uot;Of course, we had already supplied them with all the information they needed.&uot;
Under its contract with the Louisiana Hydroelectric Partnership, the Town of Vidalia must buy 6 percent of power produced at the partnership’s hydro plant in south Concordia Parish.
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The $4 million loan would fund the purchase of hydro power and help establish a larger reserve fund to cover such purchases during low water times in the future.
The loan can be paid back from town revenues in general. Most of the loan will be paid back using about $2.8 million in royalties and interest the hydro partnership owes the town.
The Mississippi River, from which the hydro plant makes power, dropped to very low levels last year, causing the plant to produce almost no power.
And under the contract between the Hydroelectric Partnership and the town, the partnership can defer paying royalties until the river gets high enough for the plant to once again make a profit.
So starting with the first quarter of 2000, the partnership began deferring those royalties.
Town officials are not yet sure when the hydro partnership is expected to resume paying royalties to the town.
Initially, the town planned to ask for permission to borrow the money with the understanding that the loan would be paid back by March 1.
That was only because the commission, in the past, would automatically let towns &uot;roll over&uot; such debt, giving them an extra year to repay the loan. There was no limit on how many times the repayment time could be extended.
But town officials have since learned that the commission is no longer letting towns carry over debt so easily, Davis said.