AUBURN — The president of Metal Technologies Inc. is not the first local industry leader to complain about Auburn’s electricity rates.
MTI President Matt Fetter spoke to the Auburn Common Council on Tuesday at City Hall.
“This is the worst electricity rate we have,” Fetter said about charges to the Metal Technologies foundry on Auburn Drive. Based in Auburn, MTI operates plants in six U.S. cities and Mexico.
Texas-based Scot Industries also operates a factory on Auburn Drive. Its president, Steven Wilmeth, has been engaged in a legal battle over Auburn’s power rates for more than two years.
“Scot Auburn has the highest electric charges that Scot Industries pays anywhere in the United States,” Wilmeth wrote in an email to a city employee on April 10, 2018.
“I echo everything Matt said,” Wilmeth said in an email Wednesday after reading Fetter’s comments.
“The electric charges in Auburn are a minimum 20% higher than any of the 12 Scot locations. The electric charges are a major part of our costs. We are now studying self-generation at the Auburn location. It is a real possibility,” Wilmeth added.
In his 2018 email, Wilmeth wrote, “When I selected Auburn as a location for this plant, I was led to believe that the charges were going to be less than 50% of what we are being charged. My understanding turned out to be incorrect. It is an expensive error in need of repair.
“We have to do something. These high charges threaten the existence of our Auburn facility. Scot Industries is not the only Auburn company concerned about these charges.”
Wilmeth’s 2018 email came on the same day he asked to see the city’s contract with American Electric Power, which sells power to Auburn’s city-owned Auburn Electric utility. Wilmeth also requested the city’s bills from American Electric Power for the previous three months.
On May 1, 2018, the city released a heavily redacted copy of its contract with AEP and denied Wilmeth’s request for the billing statements.
Ten days later, Wilmeth filed a complaint with Indiana Public Access Counselor Luke H. Britt, seeking an opinion that Auburn should release the documents Wilmeth requested.
In its answer, the city responded that it had complied with Indiana’s Access to Public Records Act by giving Wilmeth the redacted documents. City attorney W. Erik Weber contended that the redacted portions of those documents are legally protected trade secrets.
In June 2018, Britt issued his advisory opinion, saying Auburn should give Wilmeth the AEP contract and monthly bills “with much more precise redactions.”
Britt wrote, “The public has the right to scrutinize a contract and decide whether their public officials are being good stewards of public resources and getting a benefit from the bargain.” He added, “No confidentiality or non-disclosure clause can bargain away the public’s right to know.”
When the city did not release the documents with fewer redactions, Wilmeth sued the city in DeKalb Superior Court I on Jan. 29, 2019. The case still is in progress.
In its first response to his 2018 request, the city gave Wilmeth a copy of an agreement dated July 13, 2009, for AEP’s Indiana Michigan Power Co. to provide the city’s full requirements for electricity.
The agreement says the contract begins June 1, 2013, and blacks out the date on which the agreement ends. At Tuesday’s council meeting, Councilman Mike Watson said the city’s contract with AEP runs for 18 more years. No one contradicted him.
In the document the city provided to Wilmeth, a section titled “monthly rates and billing” covers five pages that are entirely blacked out. An appendix titled “cost of service formulas” covers 18 pages that are nearly all blacked out.
In his June 2018 opinion, Britt said the Public Access Counselor’s office “has rarely, if ever, encountered a public contract redacted to the extent the City has redacted its agreement.”
In his brief filed with Britt, Weber argued that the city withheld only the parts of the contract that contain confidential trade secrets.
The Carmel law firm of Coots, Henke & Wheeler is defending Auburn against Wilmeth’s lawsuit. In a motion filed Jan. 30, 2020, the Carmel firm argued that “release of the redacted information would provide a competitive advantage to competitors” of Indiana Michigan Power.
The motion added, “Release of the unredacted agreement would cause substantial competitive harm” to Indiana Michigan Power by revealing how the company prices its services.
“We’re defending the case. we feel good about our defense and how we’ve handled the matter,” Weber said last week. “We’re working with Scot Industries on their concerns … we value them. We’re going to do anything we can to work with everybody on any concerns they have.”
At Tuesday’s council meeting, Fetter said Garrett and other communities with city-owned electric companies have saved money by switching from Indiana Michigan Power to other providers. Garrett has contracted with Wolverine Power Cooperative in Cadillac, Michigan, to supply electricity to the city from June 1, 2019, through May 31, 2025.
Auburn Mayor Mike Ley said Garrett’s electricity rates are now 30% lower than Auburn’s. Ley said Auburn has hired experts who are “digging deep” into the city’s power rates. He promised a report soon.
Fetter warned that Auburn companies with multiple locations will look at electricity rates when making decisions about future expansions or cutbacks.
Ley said Auburn recently lost a potential new industry solely because of electricity rates.
“In the long term, all products must sell for something more than their cost,” Wilmeth wrote Wednesday in an email to The Star. “Products priced below cost will disappear from the market. Products that are priced above the competitive market will also disappear from the market, but in a different manner. This includes electricity and their users.”