Chrysler has filed a complaint with the Indiana Utility Regulatory Commission, saying it wants a $2.5 million security deposit it paid to Duke Energy in 2009 returned.
Chrysler demands deposit back
Following Chrysler’s bankruptcy in 2008, Duke Energy, which supplies power to the Michigan-based automaker’s plants in Kokomo, Indiana, demand a $2.5 million deposit, based on what it called “risk assessment.” Chrysler at first refused, saying it had always paid its power bills in a timely manner.
Chrysler, the largest single employer in Kokomo, eventually capitulated in 2009 when Duke Energy threatened to cut off its power. That would have cost Chrysler millions in shut downs and delays.
Now it is three years later. Chrysler weathered the storm with a government loan and by selling its controlling shares to the Italian automaker Fiat SpA. The automaker is now thriving, posting $55 billion in sales and $183 million in profits last year. Chrysler says it has more than proven its ability to meet its utility expenses, and it wants that money back, with interest. To that purpose, it filed a complaint with the IURC on July 5.
Chrysler says that the Kokomo power supplier remains “the only public utility in North America that is still holding a security deposit for Chrysler.”
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Duke not budging
However, Duke Energy is holding its ground. Angeline Protegere, a spokesperson for the company, said:
“We disagree with Chrysler’s characterization of this dispute and look forward to providing more information in the IURC proceedings. We value all of our customers, and our deposit policies are designed to minimize the overall costs to all customers.”
According to Chrysler, Duke Energy refuses to pay back the deposit until Chrysler meets three criteria:
1) Making 12 consecutive monthly payments. It is reasonable to assume that condition has been met three years later, since the power has not been shut down in any Kokomo plant.
2) A long-term credit rating of BB or better from Standard and Poors. According to Torque News, it only ranks a B with S&p at this time, so that criteria may not have been satisfied.
3) A determination by Duke Energy, based on four quarters of financial statements, of the company’s financial standing and risk assessment.
Chrysler counters in its complaint that the third condition lacks objective criteria, and therefore is not able to put verifiable efforts toward that goal.
An Indianapolis pre-hearing conference on the matter is scheduled for August 15.