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Coaldale contemplates legal action against MEM

Published March 09. 2011 05:00PM

Coaldale Borough Council may be poised to take a Lackawanna County firm that promised big savings on electricity costs to court for failing to fulfill its end of the deal.

Under the plan, Municipal Energy Managers of Moscow said the borough would save $213,346 in street lighting costs over the next 20 years by having them negotiate with PPL for Coaldale to buy the lights. PPL would still own the poles and provide the electricity. MEM would upgrade and maintain the lights for a flat annual fee through 2037.

Coaldale signed on with MEM in February 2009. At the time, it had been leasing its street lights from PPL for $28,000 a year.

But on Tuesday, council agreed to authorize solicitor Michael Greek to contact attorneys from other boroughs that have had problems with the company, including Nesquehoning and Lansford, to discuss taking legal action against MEM.

Coaldale officials say MEM has not made the interest payments it promised to make on $158,460 of a $182,400 loan the borough took out to implement the conversion.

Borough secretary Louise Lill said MEM promised to pay the interest on the $158,460, which comes due twice a year, in December and in June. MEM did not make the December payment, she said, leaving the borough to scramble to pull together the $6,000 payment.

MEM has ignored her telephone calls, letters and e-mail messages, she said. The company has also failed to respond to her messages about faulty street lights.

Company representatives did not immediately return a telephone call seeking comment early Wednesday.

Local municipalities have grown frustrated with MEM. Coaldale Councilman David Yelito, along with officials from Nesquehoning and other boroughs, met with an MEM representative in recent weeks. Yelito said Tuesday they left the meeting with "too many unanswered questions." After some discussion, Councilman Tom Keerans moved to direct Greek to talk with the other solicitors about taking MEM to court.

Municipalities have been losing patience with the company, which has stumbled over its own hurdles. In August, Lansford Borough Council agreed to join with other municipalities in a complaint MEM was to file with the state Public Utilities Commission against PPL.

MEM contended PPL was dragging its feet on the transfer of street lights to the boroughs. The status of that complaint was not clear as of Tuesday.

On Sept. 15, Greek said at a public council meeting that he would write a more-strongly worded letter to MEM after the company failed to respond to numerous letters sent by Lill about the faulty lights. It also had not responded to a previous letter sent by Greek. Lill said at that meeting that she had finally contacted PPL, which fixed the lights.

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