With a Bond Payment, CRRA-Enron Deal Is History

by Categorized: Energy, Public finance Date:

The state’s trash-to-energy agency made the last payment on its debt for the Hartford plant on Thursday, finally ushering out the painful era of the scandalous Enron deal that cost the agency $200 million.

Connecticut Resources Recovery Authority paid $4,248,712.50,and with that, the 27-year financing saga for the CRRA Mid-Connecticut Project solid-waste system closed. The plant was first financed in 1985, and the bonds were refinanced in 1996.

Five years later, CRRA agreed to pay $220 million to Enron, the Texas-based energy-trading giant that was basically running a $60 billion Ponzi scheme. In exchange, Enron was to buy CRRA’s electricity for about $2.2 million a month.

After just eight payments, Enron imploded, leaving the nation to ponder whether and how to rein in corporate practices gone amok.  In Connecticut, the much-investigated deal led to many months of political wrangling and was the beginning of the end for Peter Ellef, chief of staff for then-Gov. John G. Rowland, who resigned as chairman of CRRA and was later indicted on unrelated charges.

CRRA was remade with a new board and management. Ultimately, a one-man grand jury found no criminal wrongdoing.

“Thanks to a lot of hard work by a lot of people, we never missed a payment and we never interrupted our service, and now we’ve retired all those bonds,” CRRA Chairman Donald S. Stein said in Thursday’s announcement.

With the payoff of the bonds, the contracts between CRRA and 67 towns ended. Fifty new town contracts with CRRA’s new Connecticut Solid Waste System take effect Friday.

“We’ve been preparing for this day for a long time to make sure our customers’ transition to the new Connecticut Solid Waste System will be completely seamless,” said Thomas D. Kirk, CRRA president.

The disposal fee for Mid-Connecticut had been $69 per ton, and will now have a base rate of $62.50 or 60.50 per ton, depending on a town’s contract length.

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