By Joshua Benton
Blade Staff Writer
In the continuing saga of a possible municipal electric company, one Toledo councilman wants to get the federal government involved.
Peter Gerken, who has been the council’s strongest proponent of a city utility to compete with Toledo Edison Co., is asking the U.S. Department of Justice to investigate whether Edison has broken anti-trust laws by threatening to withhold promised cash if the city gets into the power business.
“I want to see if First Energy [Edison’s corporate parent] is breaking the law in its threats to council members,” he said.
Mr. Gerken and other municipal-power supporters say Edison’s high rates have scared off businesses that might have located in Toledo. He favors creating a city utility to provide electricity for a small area of East Toledo where Steel Dynamics, Inc., is considering building a minimill.
On April 20, Toledo Edison President James Murray threatened to withhold $7.4 million in economic development funding between now and 2002 if the city forms its own utility. “We don’t give money to competitors,” he said at the time.
Mr. Gerken said such comments might violate anti-trust law restricting the actions of monopolies.
“In our case, economic threats are just as real to us as threats of physical violence,” he reasoned.
He said he would write to the Justice Department and the Ohio attorney general’s office, asking them to investigate whether Edison’s threat constitutes a restraint of trade. And his letter will ask if the threat violates a 1978 law that specifically allows cities like Toledo to form their own utilities.
Edison spokesman Richard Wilkins said he could not comment on Mr. Gerken’s action until he saw the letter. He said the agreements with Edison clearly say that founding a municipal utility would end the current funding.
“We would provide funds for certain things like economic development, and in return for that, the city would not form a municipal electric company,” Mr. Wilkins said, giving his interpretation of the agreement.
City attorneys disagree, saying the deal would only be invalidated if the city provides electric service, not just creates the utility that could eventually do it.
Council has three utility-related ordinances on its agenda, including one to create the municipal service. Council President Peter Ujvagi again asked for action on the three to be delayed until the next meeting, as negotiations with Steel Dynamics continue.
“We’re going to have to make up our mind on this eventually,” Mr. Gerken said.
In other action, council:
* Agreed to a deal with Lucas County to share up to 25 beds a night at the Corrections Center of Northwest Ohio, the regional jail at Stryker. The city regularly overuses its allotted bed space at the jail and must pay a higher rate to use excess beds. The deal will let the city’s overflow criminals use county beds at a cheaper rate.
* Continued a debate over the procedures the city must use to award contracts. Councilman Gene Zmuda has argued that city departments should take bids on projects before bringing the best bid to the council and asking for the appropriation of funds. Many times, though, city officials ask for the money before taking the bids, sometimes allowing contractors to know what the city expects to spend and not allowing lawmakers to approve the final deal.
The dispute centered on an ordinance to allocate $60,000 to rebuild two electric motors for the city’s department of water reclamation. No bids have been taken, and Mr. Zmuda asked that that happen before a vote is taken. His colleagues disagreed and approved the ordinance. In response, council President Ujvagi scheduled a committee-of-the-whole meeting to discuss the bidding process.