|Cobb County District Attorney’s Office reviewing Cobb EMC Forensic Audit
June 24, 2015
Yesterday articles in The Macon Telegraph and the Atlanta Journal Constitution covered the recently released Cobb EMC forensic audit. The Journal Constitution placed it as the lead article in yesterday’s paper.
The Atlanta paper’s article is behind a paid firewall and can’t be linked to here. However, the coverage points to a tangled web of favoritism that Brown used to move money from Cobb EMC to private businesses where he and Plant Washington developer Dean Alford had direct interests. The article includes the audit’s findings that Alford received $18Million from Cobb EMC and Cobb Energy when he worked there.
The article quotes Don Geary with the Cobb County District Attorney’s office saying, “We are very interested in everything in that report. We are continuing to investigate.”
The article also includes this from attorney David Cohen, who represented a small group of Cobb EMC members in a lawsuit against their own co-op, “We knew it was bad, but it appears from the report to be much worse than any of us expected.”
Date: June 22, 2015
A forensic audit covering the time that Dwight Brown led Cobb EMC and Cobb Energy shines a bright light on some of the financial questions that surfaced before and after coal-fired Plant Washington was announced 8.5 years ago. Cobb EMC – like Washington EMC – was one of the original co-operatives that formed Power4Georgians, and has since been released from further obligations. Cobb Energy was a for profit company established in 1998 under Brown’s directive.
The audit includes some big numbers for Brown and his friends. The auditors report that Brown and his wife Mary Ellen, received over $20 Million in benefits from Cobb EMC and Cobb Energy.
Brown’s private business partner and Vice-President at Cobb Energy, Dean Alford, tallied $18 million.
In addition to personally benefiting, companies led by Alford also received windfalls. Allied Utility Network obtained $5.9 million in funds syphoned from Cobb EMC. Although the bookkeeping isn’t precise, it appears that Allied Energy Services may have also received around $4 million. In addition to monetary benefits, Allied Energy secured a no-bid contract to develop coal-fired Plant Washington, even though the auditors found that “neither Alford nor Allied had any experience building or developing a coal-fired power plant, and witnesses indicated he was hired on the basis of a recommendation by Dwight Brown.”
There’s a lot of information to digest in the 150+ page executive summary of the audit that was requested by Cobb EMC Board members elected after Brown and Alford, along with others, were ousted from the electric co-op almost four years ago. However, what the audit does make clear is that another proposed coal plant was a “‘decoy’ designed as a subterfuge to keep land prices lower in Washington County.”
The audit concludes with this statement, “This report has clearly demonstrated that how the former CEO made business and accounting decisions from which he and his friends profited. There was no effective compliance and ethics program and no oversight on the part of the Board of either entity, Cobb Energy or Cobb EMC to stop the activities perpetuated by the former CEO.”
The audit clarifies many questions about financial and management decisions made at the co-op, but it also raises many new ones. Co-op members whose money has been connected to Cobb EMC and Alford’s proposed coal plant – now have renewed interest in whether additional legal charges and actions may result.
A forensic audit is a type of financial audit that is conducted concerning possible fraud or misconduct. A copy of the audit, performed by Fellows LaBriola LLP and CliftonLarsonAllen LLP, can be found here: http://faceinfo.org
Environmental Champion leaving GreenLaw
Coupled with solar power friendly legislation passed by the Georgia General Assembly and signed by Governor Nathan Deal, solar power continues to decrease in cost and contribute to clean and renewable energy production in Georgia. Politico covered the shift from coal as a cheap power source last week.
EPA Issues First-ever Coal Ash Rule to Protect Public Health and the Environment
The U.S. Environmental Protection Agency (EPA) took a significant step forward Friday when it finalized long-delayed standards for coal ash. The new regulations establish some safeguards to detect and prevent releases of toxic waste from the nation’s more than 1400 coal ash waste dumps, most of which are currently leaking into water sources.
Unsafe disposal of coal ash has contaminated more than 200 rivers, lakes, streams and sources of underground drinking water in 37 states. Several coal ash waste ponds in Georgia are considered to be at high risk for dam failure and/or leaking into nearby water resources including Plant Branch in Milledgville. Coal ash dump sites also omit dangerous quantities of toxic dust into the air that can harm neighboring communities.
Both the Ogeechee and Oconee River basins are already stressed and mercury-laden, and coal-fired Plant Washington will store tons of the toxic waste, including mercury, directly above our groundwater resources, and just 1/4 mile from Williamson Swamp Creek. The tons of coal ash waste, riddled with heavy metals, that Plant Washington will create will be stored in an open landfill on a liner that the Georgia Environmental Protection Agency says will only last approximately 30 years.
Local citizens have been asking what will happen to the waste when the liner degrades. The heavy metals in coal ash waste never go away. They contaminate fish, wildlife and water quality when they come into contact with soil and water. Washington EMC Board members have already spent $1Million of the co-op member’s money on Plant Washington despite the ongoing concerns that member’s have raised about the dangers of coal ash waste being stored in our community.
The EPA’s new rule leaves critical gaps in protection of health and the environment.
EPA overlooked the science in deciding not to designate coal ash as hazardous waste despite the many deadly toxins and carcinogens it contains.The rule leaves enforcement of the regulations entirely to individual states, if they choose, or to citizens. Consequently the rule cannot guarantee that communities are protected, particularly in states that are unwilling or unable to require utilities to abide by the federal guidelines. By law, EPA cannot enforce these rules, nor are they able to play an oversight role. In addition, the regulations don’t include federal oversight of dam safety nor require states to adopt state programs to permit dump sites and protect local communities. The rules for coal ash remain less stringent than the federal rules applicable to ordinary household waste.
The public interest groups that sued the EPA over its failure to regulate coal ash, are planning to keep up the fight for critical public health and environmental protection.
Coal ash regulations were proposed in 2010 following the largest toxic waste spill in U.S. history in Kingston, Tenn., when one billion gallons of coal ash sludge destroyed 300 acres and dozens of homes. But pressure from the power industry and coal ash users forced the EPA to delay finalizing the proposed rule.
In 2012, ten public interest groups, including FACE partners the Southern Alliance for Clean Energy and the Sierra Club, along with an Indian tribe sued the EPA in federal court to obtain a court-ordered deadline. In 2013, a consent decree was lodged in federal court that set December 19, 2014 as the deadline for the EPA’s final rule.
Plant Washington’s developer has yet to announce power purchase agreements for its long delayed project, significant funding for the multi-billion dollar project, its ability to meet critical emission requirements, as well as its ability to meet other permit stipulations.
Friday’s announcement, while not as rigorous as health professionals, faith leaders, elected officials, and environmentalists had urged, is still an important step towards protecting the health of our families in addition to our natural resources.
Friday’s coal ash regulation announcement does not make Plant Washington’s future any more certain or financially viable.
Georgia EMCs sign up for cheap solar power
Last night CBS 60 Minutes aired an interview with Duke Energy CEO Lynn Good about the coal ash spill in the Dan River earlier this year. The public now knows that every coal ash pond Duke Energy has in North Carolina, a total of 14, are leaking toxins into rivers and ground water that the public, farmers, and wildlife rely on for fresh water.
On December 19 the EPA will announce coal ash waste classifications that could determine whether coal ash waste is treated as the dangerous substance it is. Currently this heavy metal laden waste isn’t classified as being as dangerous as the household garbage all of us throw away each week.
This link from Earthjustice attorney Lisa Evans has several additional points on the dangers of coal ash waste and what Duke Energy isn’t telling the public. The window on the coal ash waste classification announcement is about to close. Use the information in the Earthjustice article, pick up the phone today, and make a call today in support of clean water for everyone, including our fellow citizens in North Carolina.
Georgia is fastest growing solar power producer
There have been lots of naysayers about Georgia’s ability to be competitive in the solar energy market. News reports this month are putting that falsehood to rest. From Utility Dive:
Plant Washington’s future looks grim
An Associated Press article in the Raleigh News and Observer covered Plant Washington over the weekend, painting a dim picture of the long lingering proposed coal plant. The article points to the low price of natural gas and a shift away from coal by major energy suppliers including the Southern Company. The article points to a lack of funding and contracts with customers as huge obstacles that have not been overcome since the plant was announced almost eight years ago. The EPA will announce a final rule for new sources of carbon emissions in January. Plant Washington’s developer has not demonstrated to the EPA that it is in fact an existing source of carbon pollution. Local citizens Mike and Laura McAbee told the reporter, Ray Henry, that he would rather pay more for electricity if it came from cleaner energy sources. Mr McAbee told the reporter,“I just don’t want them to push things down people’s throats because someone wants to make a buck.”
Kemper Coal Plant Costs Rise by Another $496M November 2, 2014
The Mississippi based Kemper Coal Plant, owned by the Southern Company, continues to get more expensive by the day, and the plant still isn’t online. This plant was first estimated to cost $2.8B, and should have been providing power to customers last year, according to the Atlanta Journal Constitution. The price tag tops out at $6.1B now, with cost overruns expected to be $20-$30M per month if there are further delays. The start date keeps moving further into the future, with a date now pushed to the spring of 2016. Mississippi Power customers are already toting an 18 percent rate increase on this plant, and the AJC report that Mississippi Power anticipates requesting an additional 4 percent increase in the future. GA Water Coalition Announces Dirty Dozen 2014 October 22, 2014 Earlier today he Georgia Water Coalition (GWC) announced the Dirty Dozen 2014, a list of threatened water resources in our state.. FACE is a member of the GWC, working to protect both the Oconee and Ogeechee Rivers from Plant Washington emissions and water table drawdowns. This year marks the fourth Dirty Dozen list, and the first time that rivers in our area are not on the list! The GWC has decided that the future for Plant Washington is so abysmal that the threat is no longer pressing for either river. Not landing on the the list does not mean that river enthusiasts and advocates should assume that our work is over. FACE and our partners remain engaged and involved in the work to make sure that Plant Washington does not become a reality. FACE members and supporters have worked hard for almost seven years to protect our already fragile and mercury laden rivers from additional pollution. Our work is not done but as the Dirty Dozen list shows today, it has been most effective in protecting the Oconee and Ogeechee Rivers in Middle Georgia.
Solar Back-up for Grid Failures September 17, 2014
Sandersville residents lost their water supply during last winter’s ice storm when the City didn’t have sufficient power to run the municipal water wells. Could a solar based bypass working off the grid solve that problem? Other communities and providers are building microgrids to avoid problems when the larger grid goes down. FACE Annual Meeting set for October 6 September 4, 2014 FACE will hold our Annual Meeting on Monday, October 6, 2014 at 7:00 pm at Minton Springs AME Church on the Mayview Road. Members and the public are encouraged to attend. We have made significant progress towards defeating Plant Washington in additional to other work that will protect the health of our families and natural resources.
From Hwy 15 South
Heading south on Hwy 15 from Sparta, turn left onto Hwy 102 (towards Mitchell and Hamburg Sate Park). If you pass a convenience store on your left and post office on the right you have just missed it.
Drive on Hwy 102 until reaching a 4 way intersection. Turn right onto S. Spart-Davisboro Rd
Continue down Sparta-Davisboro Rd for 4.5 miles.
Turn right onto the Mayview Rd. Drive ½ mile and the church will be on the right
From Hwy 15 North
Travel through Sandersville and cross the Fall Line Freeway (the Days Inn will be on your left). At the top of the hill as the road curves turn right onto the Mayview Rd. Continue on the Mayview Rd for 5.9 miles. The church will be on your left as you begin down a hill.
Turn left at the traffic light intersection with Hwy 15. (The Days Inn will be on your right as you approach the intersection). Follow the directions for Hwy 15 North
We’re already on the hook for Plant Washington August 11, 2014 Dear Editor, Washington Timberland LLC —Dean Alford’s corporation — occupied some prime real estate in the legals section of last week’s Sandersville Progress for unpaid property taxes. Over six years ago Dean Alford announced that Plant Washington would almost double Washington County’s tax base, as Washington EMC, Industrial Development Authority, and business leaders nodded in agreement.
That’s not how is has worked out at all.
Alford’s company doesn’t seem to have the cash on-hand to cover less than $10,000 in property taxes it owes Washington County. If you believe Power4Georgians’ estimates that the plant will cost $2.1 billion, this means the developer already can’t cover .00048 percent of the costs.
Alford has promised over and over again that Washington County won’t be on the hook if his coal plant goes belly up. Washington Timberland’s tax situation puts us a lot closer to dangling on Plant Washington’s string.
We’ve got roads to maintain, children to educate, and law enforcement officers to pay. The coal plant developer who came in from out of town wearing a really nice suit made big promises to us. The note has come due and he’s not holding up his part of the deal.
We’re learning an expensive lesson from Plant Washington. Shame on us if we throw good money after bad. It is time to cut our losses and walk away from Dean Alford’s coal plant.
Katherine Cummings Washington County taxpayer Washington EMC owner/member
This letter to the editors was sent to the Sandersville Progress and WaCo Spotlight. Coal ash and ball fields don’t mix August 7, 2014 School officials in North Carolina’s Brunswick County have closed a baseball field after learning coal ash waste was just beneath the surface. Cogentrix, a coal-fired power plant, spread the toxin filled waste over the field.Frank Holleman, an attorney with the Southern Environmental Law Center (which also represents FACE), told the StarNews that utility companies were “very liberal” in allowing coal ash waste to be moved off power plant sites. State regulators said the field was safe, despite the fact that household garbage has stricter regulations than coal ash waste. Court battles have been waged over the lack of regulations concerning this carcinogen filled waste, and a determination by the EPA will be announced in December. School officials decided independently that student health would be compromised on the field. A pile of coal ash waste sits next to the field too. FACE President to EPA: Kids deserve clean air July 30, 2014 Yesterday four FACE leaders spoke at the EPA’s public comment session on control carbon pollution. Hundred of citizens, including elected officials, faith leaders, physicians, retired military personnel, fire fighters, and children spoke and rallied for limits on carbon emissions from power plants and other industrial sites. Today’s Macon Telegraph quotes FACE President Larry Warthen urging the EPA to adopt strong carbon limits because children deserve cleaners air. Warthen told the EPA panel, “No child should have limited access to enjoy the great outdoors and do the normal things that kids do without an inhaler.” Carbon pollution contributes to poor air quality, which impacts anyone with asthma and respiratory illnesses. Lyle Lansdell told the EPA that she and other farmers are struggling to grow the food we need because carbon is contributing to extreme weather conditions. Record high temperatures in May last year followed by almost seven times the normal rainfall in June wrecked havoc on both her crops and livestock. Lansdell said we have been “short-sighted” in regards to climate impacting emissions. At last count almost 6 Million people have submitted comments asking the EPA to require strong carbon emission standards. Tell the EPA you want the proposed carbon pollution standards to be adopted. FACE members speaking up today for clean air! July 29, 2014
Larry Warthen (left) spoke to the EPA in Atlanta today urging for strong carbon control standards for existing power plants. The man to his right is a retired Marine Lt. Colonel who said climate change threatens national security. FACE partner Amelia Shenstone of Southern Alliance for Clean Energy (left), FACE Secretary Paula Swint, Jennette Gayer of Environment Georgia, and FACE member John Swint, right, have worked together for clean air for over six years. Lyle Lansdell attended the very first meeting of concerned citizens who soon became FACE. She now runs a small organic farm in Sandersville which is on the National Historic Register. Lyle was a public health researcher before retiring. The man seated to her left is the Alabama Attorney General, “Big Luther” Strange. He was there to argue against the proposed carbon rule and in favor of dirty air and climate change.EPA Clean Air Hearing next Tuesday! Don’t miss the fun! July 25, 2014 The Environmental Protection Agency will listen to citizens during a public comment session next Tuesday, July 29 and Wednesday, July 30. The meeting has been moved to the Omni Hotel across from Centennial Olympic Park. If you want to submit comments electronically (and easily) use this link. Please share this link and share with your friends, family (commenting is a great way to teach children and grandchildren about participating in the democratic process), and neighbors. Support our road trip to speak up for clean air! This Tuesday FACE members and supporters 18 children and adults from Swainsboro and Washington County will van-pool together to ask the EPA to adopt the proposed carbon rule for existing sources of pollution. We have raised half of the costs of our gas and parking expenses, but would appreciate your support. We still to need to raise $120 dollars by Tuesday. Your support in any amount helps FACE continue to work for clean air and water and health families. FACE is a 501 (c) (3) nonprofit and donations are tax deductible. Donation via PaypalGeorgia has 4th highest power rates in the country July 15, 2014An article in the Atlanta Business Chronicle reports that Georgia ranks fourth in the country for high energy costs. Electric power rates for Georgia Power customers must be approved by the state’s Public Service Commission. Customers have an opportunity to share their ideas and concerns with the Commission before rates are set. The Commission also approves Power Purchase Agreements for Georgia Southern. Members of Washington EMC (and the majority of EMCS in our state) are not allowed to comment on power rates before they are set. If co-op member/owners raise objections to the rates they only place to voice those is with the EMC Boar which set the rates. The Public Service Commission has no oversight on our power bills. The Washington EMC Board does not require competitive bids for Power Purchase Contracts even though those contracts can span 15-30 years.“The Most Costly Thing We Can Do Is Nothing” June 2, 2014 Environmental Protection Agency Director Gina McCarthy announced proposed rules to reduce carbon pollution in the United States by 30 percent in 2030, saying, “The most costly thing we can do is nothing.” McCathy pointed out that 1 in 10 children have asthma, and reducing carbon emissions we will improve the health of our nation’s children. The proposed rules are built on comments sent in from industries, business owners, and thousands of citizens. The rules will require states to “chart their path” to reducing carbon emissioins by 30 percent, based on 2005 emissions. That level is equivalent to eliminating 2/3 of the current car and truck emissions, and is twice the amount of carbon released by coal plants in 2012. McCarthy went on to note that states can work together, as some are already, or create new partnerships to meet the proposed levels. She said “the plan doesn’t prescribe, it propels a mix and match” design created by the states. She added this plan will allow entrepeneurs and investors more options to be involved in the future of power generation of our country. McCarthy said, “Our clean energy revolution is already unfolding in front of us.” To those who say energy bills will soar as a result of reigning in carbon emissions, the EPA Director said, “They are wrong. I’ll say it again, they are wrong.” Electric co-ops were recognized during today’s announcement. McCarthy said that many are already investing in and using renewable energy resources to better serve their customers. McCarthy said “You know who you are.” Under the proposed rules the average power bill will go down eight percent (8%) by 2030. She said skeptics will use “the sky is falling” in response to the new rules, adding that many will point to the polar vortex as a reason not to act. Jobs will be created across the country in all types of energy production and related fields, jobs that “can’t be shipped overseas,” McCarthy said. “We are making a downpayment on a more efficient energy system.” The EPA will hold public comment sessions across the country in the coming weeks. There will be a session in Atlanta on July 29. You may comment in writing now. FACE will be making plans and sharing them here and on our Facebook page about how you can attend the July 29 comment session, share your concerns, and help protect the health and pocketbooks of our community from Plant Washington and other carbon polluters.
Local citizens learn more about the risks of Plant Washington For immediate release: May 23, 2014 Contact: Katherine Cummings, FACE, 478.232.8010 County Commissioners Horace Daniel and Edward Burton joined approximately 75 citizens for a community meeting at New Light Fellowship Church in Warthen hosted by GreenLaw and the Fall-line Alliance for a Clean Environment (FACE) last week. Greenlaw attorneys MaKara Rumley and Ashten Bailey shared information from national organizations like the American Lung Association, NAACP, and census records to help local citizens understand more about how Plant Washington was proposed for our community, the health impacts of coal, and the alternatives to generating electricity by burning coal. Citizens learned that:
“Plant Washington won’t be good for the health of Washington County families, water and air, or wallets,” said MaKara Rumley, GreenLaw attorney, ”Let’s learn from other states’ mistakes, who got in over their heads with coal plants, rather than make such expensive –and unneeded – mistakes ourselves.” Local citizens learned that ratepayers in Ohio are going to ask their state Attorney General to investigate the contracts that their community leaders committed them to for power from Prairie State Energy Campus (PSEC). According to a report by the Institute for Energy Economics and Financial Analysis, The building of the coal-fired PSEC saw cost overruns pushing the final price tag to $5Billion, and the cost to produce electricity is 40 to 100 percent higher than on the open market. “We don’t want to follow in the footsteps of North Dakota, where citizens are paying for a new coal plant that has been built, but has never been able to afford to operate.” FACE Executive Director Katherine Cummings said, “We should be telling our elected officials and EMC board members to avoid a similar financial burden here in Washington County. There are cleaner – and cheaper – options on the table today.” Last Tuesday, the state Public Service Commission approved a Georgia Power deal to buy electricity from an Oklahoma wind-powered facility. Georgia Power will buy enough electricity generated by wind in Oklahoma to light 50,000 homes in our state, at a price that puts downward pressure on rates. GreenLaw attorneys said that Plant Washington won’t be good for the health of our families, our water and air, or our wallets. They encouraged everyone there to tell their elected officials and EMC Board members that Plant Washington isn’t good for Washington County. It isn’t too late to Say No to Plant Washington. #####################
|In the News
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