Looks like Goldman Sachs is coming for your utilities.

[dixiegrrrrl]

This plays out like 6 degrees of separation from Goldman.
Here's the story. Hang in there for some background, it is worth the
read.

My power company, Ala. Power, switched all of the state over to
computerized power meters, which will be read in a central office.

No more meter readers." they left from attrition" Ala Power told me when I called.
Never mind the side story that in states where this has happened, people's bills went UP and many complaints have been made.

Ala. Power, like BP. contracts services out. The electric meter switching, and central reading,is done by a company called Specialized Technical Services, Inc. (TEAMSTS), based in Kentucky.
Their website brags of servicing 12 million meters across the South.

TEAMSTS was just bought out by Navigation Capital Partners,(NCP)
a Private equity firm," which will invest up to $30 million to develop a new business unit aimed at modernizing the country’s aging electricity infrastructure."
http://atlanta.bizjournals.com/atlanta/stories/2010/07/19/story3.html

Sounds innocuous, right?

But here's the kicker: where the money to "invest" came from.

Navigation Capital Partners (NCP) is an Atlanta-based private equity firm that makes growth and buyout investments in middle market niche manufacturing, distribution and business services companies across the United States. The managers of NCP formerly founded and managed Mellon Ventures, the private equity investment partnership of Mellon Financial Corporation. With the backing of Goldman Sachs Vintage Funds, NCP acquired the private equity portfolio of Mellon Ventures in December 2006. NCP currently manages approximately $375 million of invested and committed capital.
link: http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsId=20091210006115&newsLang=en

NCP is not just in electricity.
They are buying liquid gas, propane, etc, service companies, and they just bought a company which offers debit cards, or, as the nice official writing tells it,
" a company offering comprehensive prepaid/debit solutions for corporate America, self-banked and under-banked consumers. Solutions include payroll, general-purpose reloadable, performance, incentive, reward and gift."

What does this mean?

" the increased acceptance of alternative banking solutions such as the use of prepaid/debit solutions in place of checks or cash."

So how does a private equity firm make money buying up YOUR electric services, and going into prepaid/debit cards?

Obviously the consumer is going to pay more for both.

[jwirr]

1. We are among the few who still have our own well and septic. That

leaves us vulnerable with energy. What else am I forgetting?

[customerserviceguy]

3. Information

TV, telephone, and Internet services. You can't grow your own with them.

[customerserviceguy]

2. May I offer another look at this?

For starters, Mellon is not buying the electric services, only the contracts of the firms who do the electronic monitoring.

It's efficient to use computerized methods of reading utility meters. It's way cheaper to have them read without somebody having to stomp into the dark basement, or get bit by the dog, and besides, June Cleaver is no longer making Wally and the Beav's beds in high heels and pearls, just waiting for the doorbell to ring to let the meter reader in during the business day.

As for debit/prepaid cards, handling cash is an expensive, outmoded way of doing business. It needs to be secured, counted, its purchases accounted for, etc. Having electronic point-of-purchase means of paying keeps cashiers from having tills that are over or short, reduces the incentive for robbery (increasing safety for cashiers and customers) and makes accounting a snap.

Why wouldn't a firm who hopes to do business in the 21st Century want a part of that?

[dixiegrrrrl]

6. The downside of the move to debit cards for the "unbanked"

is that the use of the card is limited to a just few ATM withdrawls per month, there is a fee for withdrawals. By 2013 all Soc. Sec. checks will be either via debit card or direct deposit, no other options.
Private equity firms would not be buying into a future of a cashless society unless there was a profit for them, said profit coming out of the pockets of the people who use the cards.

I am more than aware that Mellon is not buying the electric companies.
However, each step in the contracting process of providing the service increases the cost of the service.
So instead of Ala. Power providing the staff to read the central meter, TEAMSTS will do it, get paid, their owner, NCP, will expect to make money from TEAMSTS, and when the customer complains to Ala. Power, they say it is not their problem, it is the contractor, said contractor is not under any state utility rules like a power company is. A lesson we have already learned from the problems in Iraq, when no one seemed accountable for anything.
Overall, the pattern of private, for profit, companies running our
energy and financial services, legally accountable to no one, is
not a happy thought, no matter how many tellers the bank can lay off to save overhead.
That " expensive outmoded way of doing business",
as you call it, keep a quite a few people employed in our area. which already has an unemployment rate of over 20%.
And that way of doing business kept money IN our local economy, not sending it to a thrice removed Kentucky private equity firm.

[undergroundpanther]

4. Iwish

I could afford solar panels on my house.maybe get off the grid before they do this grab,I would LOVE to tell all the over-wealthy control freak pigs, the bankers,corporations and goldman sacks among others a big Fuck YOU!

[pscot]

5. I don't think the Australians want to sell

n/t

[Enthusiast]

7. This is the threat

of corporate government realized.

[underpants]

8. After what JP Morgan did to Birmingham?

The whole Tiabbi article is here
Looting Main Street

http://www.rollingstone.com/politics/news/12697/64833




Summary

The timeline is as follows: Sewer system spews crap into Cahaba River in Alabama. Environmentalists lobby and the EPA clamps down on Jefferson County. Jefferson County in turn decides to overhaul the entire sewer system. Politics and corruption take the price from $250 million to over $3 billion. JPMorgan artfully becomes the lead player in the deal, using its political connections. Debt becomes too much for county. County then goes back to JP Morgan and enters into several swap agreements which end up costing them more than they originally owed. JP Morgan and wheeler-dealer Bill Blount get busted by SEC and pay big fines to settle.

Read more: http://www.businessinsider.com/matt-taibbi-jpmorgan-alabama-2010-4#ixzz0ubf8tTp5



Now that you've got the gist of it, here are some choice points from Taibbi's piece, which is appropriately titled "Looting Main Street":

Birmingham, Alabama resident Lisa Pack had to talk other laid-off coworkers out of suicide. "I'd be on the phone sometimes until two in the morning," she says. "I had to talk more than one person out of suicide. For some of the men supporting families, it was so hard — foreclosure, bankruptcy. I'd go to bed at night, and I'd be in tears."
Total cost: more than $3 billion due to pay-to-play contracts and political padding.
Synthetic interest rate swaps to ease debt repayment ended up costing the county a lot of money. It just ended up postponing the problem rather than actually dealing with it. County officials wanted to make sure they weren't tarnished in the next election year.
A wheeler-dealer named Bill Blount took bribes to allow deals to be pushed through. Compensation from this fiasco netted him about $3 million. Says one JP Morgan banker who worked with Blount: "It's a lot of money, but in the end, it's worth it on a billion-dollar deal."
JP Morgan paid Goldman Sachs $3 million just to "back the fuck off" so they could be the sole firm in the county doing business, an apparent violation of pro-competition laws. Blount took in $300k from that deal.
Everyone was in on the bribery and illegality of these deals. A bunch of investment banks including Lehman and Bear, contractors, politicians, city planners.
Advisor on deals was a firm called CDR Financial Products, which came under hot water for signing off on shitty financial products and being a "big-league version of Bill Blount."
Jefferson County at one point had more swap deals than New York City and had done at least 23 of them.
When Jefferson County defaulted on its swap payments, JP Morgan canceled the deal and charged a termination fee of $647 million. The SEC ultimately canceled the fee after charging JPM with fraud. Blount has since been found guilty of bribing officials and is now in jail.

[dixiegrrrrl]

9. Local guys go to jail. the real thieves pay a small fine.

Which is probably tax deductible at that.
and the band plays on.

[amborin]

10. K&R