Can you guess how many AL counties have more registered voters than adult residents? Find out more about a possible new electricity-natural gas utility coming to the Yellowhammer state. What’s happening to AL’s first charter school? And more inside today’s business roundup of headlines from across the state:
Southern Company and AGL Resources have agreed to a $12 billion deal that would make the natural gas giant a new Southern operating company and puts the electricity company into the growing natural gas business.
Alabama Power is a Southern Company subsidiary with 1.4 million customers, 78,000 miles of power lines and 13,000 megawatts of electric generating capacity. Southern Company also owns Southern Power, which owns 3,175 megawatts of natural gas generating capacity in Alabama.The boards of directors of both companies said today they have a definitive merger agreement to create America’s leading U.S. electric and gas utility company. If finalized, AGL Resources will become a new wholly-owned subsidiary of Southern Company.
In Alabama, AGL Resources owns a liquefied natural gas facility in Trussville that delivers about 60,000 gallons per day, its first such facility dedicated solely to the merchant market.
Southern Company with AGL Resources under its umbrella would create a new electric and natural gas utility with approximately 9 million utility customers in nine states. It is Southern Company’s largest deal to diversify its utility holdings.
“As America’s leader in developing the full portfolio of energy resources, we believe the addition of AGL Resources to our business will better position Southern Company to play offense in supporting America’s energy future through additional natural gas infrastructure,” Southern Company CEO Thomas A. Fanning said. “For some time, we have expressed our desire to explore opportunities to participate in natural gas infrastructure development.”
Under the terms of the agreement, AGL Resources’ shareholders would receive $66 in cash for each share of common stock, a 36.3 percent increase in this month’s average trading price. Southern Company expects an increase in earnings the first year after the acquisition closes.
The new company would become the second-largest utility company in the U.S. with:
- 11 regulated electric and natural gas distribution companies;
- 9 million customers with a projected regulated rate base of about $50 billion;
- Nearly 200,000 miles of electric transmission and distribution lines and more than 80,000 miles of gas pipelines;
- Generating capacity of about 46,000 megawatts.
“With AGL Resources’ experienced team operating premier natural gas utilities and their investments in several major infrastructure projects, this is a natural fit for both companies,” Fanning said. “Moreover, this transaction is expected to position Southern Company to enhance earnings growth while maintaining a strong balance sheet and improving cost-effectiveness.”
The Southern Company system is known for regularly outperforming industry peers in reliability, with prices below the national average and the highest customer satisfaction among peer utilities as measured by the Customer Value Benchmark survey. Alabama Power regularly tops such rankings along with other Southern Company operating companies Georgia Power, Mississippi Power and Gulf Power.
“AGL Resources’ management team and board of directors wholeheartedly support this transaction, and we believe it will provide new opportunities and enhanced value for our shareholders, customers and employees,” AGL Resources CEO John W. Somerhalder II said. “Importantly, both companies are committed to safely delivering clean, reliable, affordable energy while providing customers with world-class service. The respective models of Southern Company and AGL Resources focus on the fundamental values of safety, operational excellence and environmental stewardship.”
Fanning said Southern Company and AGL Resources share a focus on community involvement.
“We believe this combination will also advance our customer-focused business model,” he said. “AGL Resources and Southern Company have long been leading corporate citizens and the combined company will further our support of all of the communities we serve.”
“We’ve found a strong partner in Southern Company with its complementary businesses, excellent reputation and shared values,” he said. “They have committed to continuing our tradition of community and philanthropic support and exceptional service to customers. We look forward to working with Southern Company to complete the transaction as expeditiously as possible and ensure a smooth transition.”
Birmingham Business Journal: Registered voters outnumber eligible adults in 10 Alabama counties
The Public Interest Legal Foundation – a nonpartisan, nonprofit, public-interest law firm that specializes in civil litigation affecting elections, voting and other political processes – recently notified 10 Alabama counties that they have more registered voters than people in the voting age population.
Alabama Secretary of State John Merrill confirmed the numbers listed by the group and said that all 10 had more registered voters than people over 18 years of age, according to a report from AL.com.
The counties are Lowndes, Perry, Greene, Macon, Wilcox, Marengo, Hale, Washington, Conecuh and Choctaw.
Merrill said all 10 counties have seen population decreases since 2010 and some people that previously left the counties still remain registered to vote in their districts.
Former Alabama Secretary of State Jim Bennett’s office last year released numbers showing that four Alabama counties had more registered voters than voting age population.
The 10 Alabama counties listed by the foundation are among 141 nationwide, according to data from the foundation.
Only four other states had more counties on the foundation’s list than Alabama – Michigan (24), Kentucky (18), Illinois (17) and Indiana (11).
Here are the continues by number of registered voters and those over the age of 18.
- Choctaw County, 10,765 registered voters, 10,582 adults
- Conecuh County, 10,102 registered voters, 9,957 adults
- Greene County, 7,230 registered voters, 6,561 adults
- Hale County, 12,042 registered voters, 11,641 adults
- Lowndes County, 10,230 registered voters, 8,135 adults
- Macon County, 17,700 registered voters, 15,865 adults
- Marengo County, 16,108 registered voters, 15,485 adults
- Perry County, 8,521 registered voters, 7,621 adults
- Washington County, 13,382 registered voters, 13,048 adults
- Wilcox County, 9,059 registered voters, 8,341 adults
Birmingham Business Journal: Alabama delays first charter school opening until 2017
The first meeting of the Alabama Charter School Commission on Thursday resulted in policymakers saying the state’s first charter school will not open until 2017.
Alabama lawmakers earlier this year voted to pass the state’s first charter schools law, which would allow the state to charter schools that run independently but receive state funds, according to a report from the Anniston Star.
Charter school supporters say schools provide more options to students stuck in low-performing districts. However, opponents argue that the schools drain resources away from traditional public schools without any qualitative standards in place.
Eight U.S. states have no charter schools, showing that some states are being forced to overhaul archaic testing practices geared toward pushing unqualified teachers out of the business.
The pushback to the charter school concept at the state level has primarily been attributed to the opposition by the Alabama Education Association and many school superintendents.
Alabama’s charter law is currently in place and the newly formed commission will have to devise a means of assessing the unprecedented educational shift with the advent of charter schools.
Nonprofit groups – protected under the law – have the ability to apply for permission to set up charter schools, or school systems can convert existing public schools to the charter model.
Schools could be closed after five years if a school doesn’t meet certain performance goals.
Efforts to create new charter schools have stagnated in Alabama, with lawmakers originally projecting that the state’s first charter schools would open in 2016.
Only four school systems statewide have voted to become authorizers, with four or five nonprofit organizations approaching the state to inquire about opening a school.
Charter schools receive their first payment from the school system following only the first quarter of operation, which means a school would need to offer the funds to operate for three or four months on is own.
Charter school organizers would be able to apply for charters as early as February, with the commission deciding on those charters sometime in June.
More than 48,000 rural households and businesses in Alabama will have access to high-speed Internet services, global technology company CenturyLink announced today.
CenturyLink said it has accepted nearly three dozen Federal Communications Commission’s Connect America Fund (CAF) phase II statewide offers, which feature speeds of at least 10 megabits per second (Mbps) download and one Mbps upload in high-cost census blocks designated by the FCC. The complete plan will affect 1.2 million households and businesses in 33 states.
The company said it will accept $500 million annually for six years. Click here to see an FCC map with eligible areas of Alabama.
Kevin McCarter, CenturyLink east region president, said CenturyLink will “bridge the urban-rural divide” by bringing broadband services to rural Alabama communities, prompting more economic development, education and healthcare service, such as distance learning and telemedicine.
“While CAF II funding does not address all markets in our footprint, our company investment for CAF II is significant, and we look forward to working closely with Alabama policymakers to find funding and deployment solutions for additional markets,” he said in a statement.
The build-out plan is in the process of being finalized and is expected to take place over a six-year period. Construction should begin early next year.
Kathy Johnson, director of Alabama’s Office of Broadband Development, said CenturyLink’s efforts mesh with Gov. Robert Bentley’s vision for more access to and use of broadband Internet.
“Through broadband, communities can attract and retain well-paying jobs, provide access to education and healthcare, provide improved public safety and enhance the quality of life in areas that are currently unserved or underserved with this service,” she said.
CenturyLink said it declined CAF II statewide offers for California, Mississippi, Oklahoma and Wyoming. The company, which has 55 North American data centers and a large U.S. fiber network, previously accepted $75 million in interim CAF I support for nearly 114,000 rural locations in 33 of the 37 states where it offers residential broadband service.
Alabama’s sixth-largest credit union is now under the control of the state.
The Alabama Credit Union Administration board voted on Thursday to take over Alabama One Credit Union and its $600 million in assets due to financial mismanagement and a number of improprieties involving several key executives and officers.
All told, the Tuscaloosa-based credit union, which has more than 60,000 members, lost more than $7.8 million last year and $3.18 million more during the first six months of this year, according to the ACUA’s conservatorship order.
This is on top of the millions of dollars the credit union had already lost by giving bad loans to a con man.
“I would hope that no one is going to do anything improper going forward, not under the state’s watch,” said Robert Reynolds, an attorney with the ACUA. “Now we’re going to get to the bottom of what has happened in the past and take action against those that created these problems.”
Backdrop of lawsuits
The takeover was announced one day after Alabama One expanded its lawsuit against several top state officials to include Gov. Robert Bentley.
Alabama One’s lawsuit alleged that the state officials conspired to ensure state regulators treated it harshly, forcing it to the brink of being taken over by the state.
Its former embattled CEO, John Dee Carruth, told AL.com that the state’s actions were the result of a politically connected plaintiff’s attorney, Jay Smyth, working with David Byrne, Bentley’s chief legal advisor.
Carruth was fired after the ACUA took over the credit union. The credit union’s lawyers that were suing the state and a powerful Washington D.C. public relations firm that Alabama One hired in recent months were also let go.
“We did not believe they were in the best interests of the membership of the credit union,” Reynolds said.
Smyth, who has represented multiple people suing Alabama One, issued a statement that said that “honest people with integrity and common sense” will applaud the ACUA’s actions.
“The conservatorship of Alabama One demonstrates, thankfully, that no lie can live forever,” the statement reads.
“There will now be no further doubt that our clients have been honest, while many other people have been dishonest, over these past two very difficult years. August 27, 2015 is a great day for the truth in Tuscaloosa, Alabama.”
AL.com previously reported that the bank made a number of bad multi-million dollar loans to high flying fraudster Danny Ray Butler, who used the cash to expand his business empire including an underused $7 million sewage treatment plant.
The former used car salesman, who is now in federal prison, also hatched a massive check-kiting scheme that caused Alabama One to lose about $1.2 million.
Butler’s fiancee, Paige Howard, issued a statement saying that the ACUA’s order “is a major step forward in telling the whole story – not just part of the story – about what went wrong at Alabama One.”
She says that Butler’s signature was forged on numerous loan documents.
“No thinking person can read the Order of Conservatorship and believe that Danny Ray Butler concocted the massive fraud scheme that the ACUA has uncovered,” the statement reads.
“The conduct which led to this regulatory action was not the creation of the man who sits in prison in Talladega. The conditions are the product of actions taken by people who are still walking around on the streets of Tuscaloosa today.”
The findingsI would hope that no one is going to do anything improper going forward, not under the state’s watch
The ACUA and National Credit Union Administration began poring through Alabama One’s records in June 2014, Reynolds said.
According to the order, the ACUA board determined that Alabama One’s loan underwriting and credit administration practices were “grossly inadequate,” resulting in substantial losses. The credit union’s use of appraisal practices also lacked the independence required by federal law.
Contributing to the problem was that credit union also failed to “underwrite to the standards required by Fannie Mae,” which caused the credit union to repurchase loans at a $400,000 loss and increase further repurchasing risk, the order states.
The order also claims that Alabama One’s officers and executives exploited their positions and jeopardized the credit union’s assets and interests by “allowing transactions with insiders to be conducted on preferential terms…”
Alabama One’s employees and officers also gave credit extensions to insiders on preferential terms and conditions; used bogus auto loan documentation for insider loans; received valuable items in exchange for obtaining loans for people; and, took advantage of an insider’s position as a director and/or committee member to advertise to outside business interests to the membership free of charge, according to the order.
Preferential treatment was also given to the brother of an Alabama One executive in connection with a member’s business loan while concealing the delinquent status of the loan and failing to recognize the loan as a deficit, according to the order.
What’s more, the ACUA board found that there were at least nine occurrences where the credit union concealed books, papers, records, or assets or refused to submit the information to examiners.
The ACUA order also states that Carruth, Alabama One’s CEO, misrepresented the value and condition of credits and misrepresented the execution of a material contract.
Additionally, the ACUA board claims that the credit union failed to show documentation regarding the improper administration of a $2.2 million member loan to a business that belonged to a family member of a credit union executive.
In its order, the ACUA board named the ACUA the conservator of Alabama One.
Are members safe?
Alabama One member accounts remain safe and fully insured up to the maximums established in federal law, according to an ACUA press release. Amounts exceeding the insured limit are not lost as the credit union continues to operate under conservatorship.
Administered by National Credit Union Administration, the Share Insurance Fund insures individual accounts up to $250,000, and a member’s interest in all joint accounts combined is insured up to $250,000.
The Share Insurance Fund separately protects IRA and KEOGH retirement accounts up to $250,000.
Alabama One will continue to operate during the conservatorship. Its members will have continued access to their funds through Alabama One’s branches, internet banking and ATMs.
Carruth, Alabama One’s former CEO, issued the following statement:
“Today’s action is exactly what we feared would be the result of the illegal conspiracy that we alleged among the defendants in the lawsuit that Alabama One and I filed on June 29 of this year and it is unwarranted and unfair. The Regulator has made a number of general and broad allegations but has refused to provide us with the sufficient details to respond to them. What is especially disturbing about the actions taken is that numerous good employees, and our long-term volunteers, who have all devoted their lives to the credit union, have been summarily discharged. Our safe and sound financial institution, which has been repeatedly praised by the state for our compliance mechanisms, has now been put in this position because of the alleged conspiracy among politically-connected attorneys, public officials, and the very office charged with defending community institutions like ours. We will fight this decision with every ounce of our effort and expect to prevail.”