ANGEL FIRE — Copies of checks dating back to May 2012 show that Kit Carson Electric Cooperative made at least four of its latest franchise-fee payments to the village of Angel Fire late.
Per a July 2010 franchise agreement, Kit Carson is required to pay the village 4 percent of the co-op’s gross revenues from electrical operations within the municipality in exchange for operating there.
Kit Carson must pay the village quarterly for terms that end on the last day of March, June, September and December, the agreement states.
The contract states that “(p)ayments shall be made 30 days after the end of the quarter, accompanied by a statement of account.” However, copies of checks the Sangre de Cristo Chronicle obtained through a request for public records show that Kit Carson made each of its last four payments nine to 94 days after the deadline.
The co-op paid the village $41,118.59 in fees for October through December 2011 in a check dated May 3, 2012; $49,859.45 in fees for January through March 2012 in a check dated May 24, 2012; $27,382.09 in fees for April through June 2012 in a check dated Oct. 17, 2012; and $24,712.12 in fees for July through September 2012 in a check dated Nov. 8, 2012.
On April 9, Angel Fire Manager M. Jay Mitchell told Sangre de Cristo Chronicle the late franchise payments are partly to blame for the village’s debt to Kit Carson. Municipal documents dated March 18 show that the village’s outstanding balance with Kit Carson included $48,359.82 in unpaid service charges and $3,412.71 in late fees for a total debt of $51,772.53.
“If your payment’s late to us, we’re late getting back because it’s the same revenues we use,” Mitchell said in the April 9 interview.
But Kit Carson CEO Luis Reyes said he does not see a link between the village’s electricity bills and Kit Carson’s franchise payments.
“The late fees come from rate tariffs that are filed with the Public Regulation Commission. Those are approved by the state of New Mexico. That has no tie to the franchise whatsoever,” he said. “... We’re assessing the bills and the circumstances behind the bills, but I’m not tying bills to franchises because they’re not directly or even indirectly related to each other.”
Reyes said Kit Carson has not paid any late fees to the village as a result of the co-op’s past-due franchise payments.
“There’s not anything in the agreement that allows for that,” he said. “... You have to remember where the franchise money comes from. It comes from the ratepayers in our jurisdiction. So if they assessed a late fee, it just gets assessed back to the people in that jurisdiction. That just doesn’t make good business sense.”
The franchise agreement establishes legal remedies if either party fails to meet its obligations under the contract. It states that the non-defaulting party shall give the defaulting party written notice of the default, and the defaulting party has 30 days from receipt of the notice to correct the problem.
“If the defaulting Party fails to cure the breach within thirty (30) days of receipt of written notice of default, and unless otherwise agreed to by the Parties, the non-defaulting Party will have a breach of contract claim and remedy against the defaulting Party in addition to any other remedy provided by law, provided that no remedy which would have the effect of amending the specific provisions of this Ordinance shall become effective without such action that would be necessary to formally amend the Ordinance,” the agreement states.
On April 19, Mitchell told the Chronicle that the village has not filed a notice of default but is working with Kit Carson to resolve the issues in other ways.
“I’m in discussions with Luis and have been since Nov. 8,” he said, adding that he believed news coverage of the financial issues between the village and Kit Carson would hinder his efforts. “I really don’t appreciate the paper getting involved in my business right now on it, because all it’s doing is disrupting things.”
Reyes said Kit Carson would continue working with the village, and he believes the two entities have a “strong relationship.” He said Angel Fire officials have supported Kit Carson’s current broadband project and efforts to prevent rate increases from the co-op’s wholesale provider, Tri-State Generation and Transmission.