The Key West citizen. [volume] (Key West, Fla.) 1879-current, 1941-08-25
CLARIFIES ISSUE or
BUYING ELECTRIC CO.

Editor, The Citizen:
The editorial which appeared il
The Citizen, Thursday, Angus
81, concerning the purchase of tn
Key West Electric Company b,
the REA, does not present com
| plete view of the picture, from tn,
city's standpoint
/ The statement that the Nuveer
deal would give the City Council
full authority to run the plant il
erroneous. The plant under the
Nuveen deal would be operated
during the term of the bond issue
by an engineering firm, selected
by the council. Amy question in
volving operations or financial af-
fairs, is determined by either the
engineering firm or the trustees
for the bond holders. The City
Council can request changes. but
the approval of these changes
rests entirely with the operating
engineering firm or the trustees
for the bond holders. 1t differs
in no wise from that of the REA,
The statement that with coun-
Gil operating the plant, there is no
promise. and scant likelihood. that
rates viii be reduced The Nu-
yeen Company has stated that the
earnings of the Key West Electric
Company. over the past six years,
have been too high, and a reduc-
ton in rates could have been
made. In fact, the Nuveen Com
pany has stated that in accord
ance with the well known prin-
cipal of rate reduction stimulat-
ing consumption, the Nuveen
Company has definitely stated
that the first effect Of the pur-
chase by them. would be rate
reduction The REA proposal of
i 50 per cent rate reduction is
purely q guess
THE City Council to operate
the plant at all would require
technical and legal advice Tor
which il would find il necessary
to paw rates similar to the rates
imposed upon the local firm by its
parent concern True. but the
same condition applies in the
event the REA acquires the plant,
but il IS not true that this service
win be performed without charge,
by the REA; the charge for this
technical and legal service on the
part OF the REA VIII be included in
the rate for electricity to the con-
sumner just the same as it is at
present
III is true that at the end of
the bond issue, the plant would
become the property of the Co
operative, where il would fore
ever remain Under the Nuveen
plan, the property comes into the
physical possession of the City
Of Key West. and any surplus
earnings can be made available
To the City for its use.
The REA is a government
agency, and funds in unlimited
quality are available to il. 1t is
understood that they are pre-
pared to offer up to one million
dollars; an analysis of the capi-
tai set-up Of the Key West
Electric Company would indicate
D value considerably less than
million dollars. The Nuveen
Company wiz nominate to the
City Council several Of the larg-
est electrical and contracting
fsrns 81 the United States, to
arrive at fair value of the Key
West Electric Company the pos
sibilities are that they will ar
rive az a closer true value Of
toe KEY West Electric Company
thar the REA. under any cir
the controlling val
We 81 which the plant viii
hands is Of more inpor-
sance 10 the Guveen Company
than 70 tie REA. and 4 Is this
vailae WHICH VIII determine the
value 81 the bond i6Sae
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