Bankruptcy       other pages LMUD2001 Crisis


What LMUD does not want the public to know is that in 2001 the LMUD "management team" purchased 12.1 million dollars worth of power that they didn't need.  This incredibly bad decision led to the 8.7 million loss in 2001 and huge rate increases to the ratepayers. 

LMUD ratepayers paid dearly for this stupidity.  We are still paying. 


KWH member spoke with Mr. Cheskey, of WAPA's Folsom office and Laverne Kyriss from WAPA's corporate office in Colorado.

WAPA initiated a program to allow its customers to purchase additional power. Thirteen WAPA customers took advanatage of this offer. The City of Redding was one and Lassen Municipal Utility District was another.  

Under this program, WAPA scheduled 10 MW's of power to be sold to LMUD from the City of Redding in 2001 for a one year term.  LMUD was to pay WAPA's cost for this power plus a huge surcharge to buy the 10MW's from the City of Redding.  This surcharge covered the costs of enacting the power sale.  NO EXTRA MONEY WAS MADE BY EITHER PARTY. 

WAPA agreed to set up a five year re-payment program.

WAPA claims that they only billed LMUD for one month of the surcharge. LMUD was the only known customer that this error effected. 

$80,000 saved  by Shayla Ashmore

In 2001, the surcharge on LMUD's WAPA power was a known fact by the Controller, Bob Gaumond. The General Manager certainly knew that LMUD was supposed to pay the surcharge.... What part of incompetence do they not understand.  

Bill Stewart, LMUD's controller is NOW REVIEWING CONTRACTS  ??? 

The article written on July 22, 2003 (by Shayla Ashmore from the local advertiser)  entitled "$80,000 saved" certainly lacks credibility.  There was no savings. 

Ms. Twitchell's methodology (which is a word that she overuses) is nothing more than self-serving hyperbole. 

All of this "back slapping" must be pretty embarrassing

Article submitted by KWH member

"Anyone believing that E. Twitchell saved LMUD ratepayers $80,000 better take the course offered by the Federal Trade Commission, "HOW NOT TO BE SWINDLED".

LMUD was underbilled by WAPA in the amount of $1.5 million that included penalties and interest. Now, I want everyone to raise their hands that received an adjustment on their charge account for an amount that was not previously billed that had to pay for penalites and interest.

What no hands???? Imagine that, and you never had to negotiate to eliminate the penalties and interest from your bill. The fact is that LMUD was not billed for an amount they owed and then the amount was adjusted for overbilling the penalties and interest.

There were no savings to LMUD at the conclusion of the transaction.

By incurring a $1.5 million additional liability, is LMUD still in compliance with the debt covenant ratio of the Trust Indenture relating to the LMUD Refunding Revenue Bonds?   Pezzullo, LMUD's auditor claimed that LMUD was under this ratio by $950,000 in December of 2002.   LMUD's debt has only increased since December of 2002.

Now, let us look at the E. Twitchell "METHODOLOGY" in revising the method of WAPA surcharges. The question is whether WAPA will accept E. Twitchell's "methodology" of the surcharge.

Strange that LMUD has received two audit reports since June 2001 and the fact of not being billed for $1.5 million surcharge went undetected.

Al Vazquez's question to E. Twitchell would lead you to believe that the entire blame for the underbilling rests with WAPA and LMUD was not aware of the absence of WAPA's surcharge. 

NOT TRUE !!!  Three (Pezzullo, Gaumond, Baxter) and no more than five persons that have or had responsible positions associated with LMUD were aware of the incident. Because of their lack of integrity and ulterior motives chose to form a conspiracy to not disclose the absence of the WAPA surcharge billing."