The city of East Point recently won a lawsuit battle that has been going on for three years against a group of residents over electricity and billing in the city.
According to city officials, in 2016, a group of electric customers filed a class action lawsuit against the City of East Point alleging that the electric rates charged by the City since 2010 were “illegal taxes” and violated the Constitution. They also claimed that they were entitled to a credit on their electric bills from the funds the city received through the Municipal Competitive Trust that was set-up by the Municipal Electric Authority of Georgia, the city’s wholesale electric provider.
The Court ruled that the city only charges electric customers the reasonably estimated costs of providing electric services to them, and that the electric rates charged by the city, since 2010, are legal. The Court also ruled that the plaintiffs do not have a right to the money in the MCT and do not have a right to the money distributed from the MCT to the City. Specifically, the Court ruled that it is undisputed that the MCT subaccounts, in the City’s budget, were not funded by the City’s electric customers. The Court further stated that the electric customers were not injured and did not pay increased electric rates from 2009-2018 due to the mechanism used by MEAG to distribute the funds from the investment of the trust to the city and other beneficiaries. MEAG created the MCT, for the city of East Point and 48 other municipalities, using funds it had previously invested and cash funded bond reserve accounts it had previously created. The purpose of this trust was to help the city and other participants accumulate funds that would grow through investment and could then be used to mitigate the costs of possible electric deregulation in Georgia, according to officials.
City officials state that since 2008, East Point has spent approximately $17,751,173 in MCT funds to further enhance and increase services to residents. The list of MCT funded projects include, but are not limited to, the following: equipment for the 50 Worst Properties program, road repairs, vehicles for both the police and fire departments, park improvements, sidewalk installation and repairs, stormwater, communication and IT equipment upgrades, and improvement of buildings.
East Point has remained in news headlines over electricity for the past decade. Notably, in 2011, former East Point Mayor Earnestine Pittman joined a class action lawsuit filed against her own city over increased utility bills.