Disstevefan1
Well-Known Member
Florida will have to get by with its 5 existing nuclear reactors...
Florida, not as good as the 11 nuclear reactors the state of Illinois has...
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News Reedy Creek Improvement District and the Central Florida Tourism Oversight District
- Thread starter castlecake2.0
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Florida, not as good as the 11 nuclear reactors the state of Illinois has...
LSLS
Well-Known Member
I'm still not sure I see why Disney would accept anything other than total resestablishment with every power they originally had. Disney has ALL the power here. Their worst case is they have no district and Desantis has the press of adding a billion dollars in taxes to counties of his state. Then Disney pumps funds into whoever is running against him. If I was Disney, I'd run full on "Mess with the bull, get the horns." Don't let him get an ounce of victory out of it.
flynnibus
Premium Member
Because 'scorched earth' policies tend to impact many bystanders and people will still associate the negativity with Disney no matter who caused it.
pdude81
Well-Known Member
I have to agree here. They wouldn't be pitching ideas while backpedaling if this was already a sound legal action. You'd just see officials pointing up in the air and crassly yelling "Scoreboard!"
GoofGoof
Premium Member
Disney’s Reedy Creek district extends agreements
The Reedy Creek Improvement District, the governing body overseeing Walt Disney World in Orlando, is moving forward with business as usual, despite its looming dissolution in 2023.
RCID is continuing to operate business as usual. They signed contract extensions through 2024 for electricity purchases for the district. Not sure if the contracts address the district being dissolved or have any sort of change of control clauses in them, but I would imagine Duke and the Florida Municipal Power Agency are both well aware of the situation and have determined the risk is not high enough to decline signing the contracts. These are the type of contracts that could end up in court if the district is really dissolved along with hundreds of other vendors doing business with the district.
Disstevefan1
Well-Known Member
RCID has no choice but to operate business as usual especially when it comes to something like electricity. No matter what happens, WDW needs power. I think who will pay the electricity bill after RCID is gone is the question.Disney’s Reedy Creek district extends agreements
The Reedy Creek Improvement District, the governing body overseeing Walt Disney World in Orlando, is moving forward with business as usual, despite its looming dissolution in 2023.www.yahoo.com
RCID is continuing to operate business as usual. They signed contract extensions through 2024 for electricity purchases for the district. Not sure if the contracts address the district being dissolved or have any sort of change of control clauses in them, but I would imagine Duke and the Florida Municipal Power Agency are both well aware of the situation and have determined the risk is not high enough to decline signing the contracts. These are the type of contracts that could end up in court if the district is really dissolved along with hundreds of other vendors doing business with the district.
GoofGoof
Premium Member
Yes, for sure. I wouldn’t expect RCID to act any differently. What is more interesting to me is that 2 other entities are willing to sign on for a period beyond next June. Without seeing the contract we have no idea if the risks for them are addressed. It’s possible they have a make whole payment should the district be dissolved or a clause that the contracts are assigned to another entity should the district be dissolved. It’s also possible that the price paid may be above market with a larger than normal counter-party credit risk premium. Typically selling power to a highly rated municipality is virtually risk free, but this situation is different.
Brian
Well-Known Member
Nothing groundbreaking here, but a takeaway from this article is confirmation that Disney is engaging in conversations with state legislative leaders and Gov. DeSantis' office.
:quality(70)/d1hfln2sfez66z.cloudfront.net/09-09-2022/t_70b920075a8344b4a38fc6cc1943b128_name_ORCO_REEDY_CREEK_MEETING_frame_255.jpg)
www.wftv.com
Reedy Creek replacement in the works
“We are not yet announcing the Reedy Creek plan, but we will.”
www.wftv.com
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GoofGoof
Premium Member
Small related story. The full article is behind a paywall, but the summary is Duke Energy (one of the largest suppliers of electricity to WDW through RCID) asked for RCID to post a letter of credit from a bank for $3M in case the district is dissolved in June and hasn’t yet paid their May electric bill.
It is common practice for a company to require some sort of collateral posting in these types of commodity transactions, but it is usually based on the credit worthiness of the counter-party. I assume Duke is just being cautious and I’m sure they are within their contractual rights to request this, but it highlights that there are real costs to this “game” and despite the state’s assurances that nobody will be left holding the bag if/when this plan is executed at least one company is concerned that won’t really be the case. For now all this really means is RCID pays some LC fees to a bank and continues business as usual.
www.yahoo.com
It is common practice for a company to require some sort of collateral posting in these types of commodity transactions, but it is usually based on the credit worthiness of the counter-party. I assume Duke is just being cautious and I’m sure they are within their contractual rights to request this, but it highlights that there are real costs to this “game” and despite the state’s assurances that nobody will be left holding the bag if/when this plan is executed at least one company is concerned that won’t really be the case. For now all this really means is RCID pays some LC fees to a bank and continues business as usual.
Disney's Reedy Creek district OKs deal in light of DeSantis dissolution law
Walt Disney World's Reedy Creek Improvement District on Oct. 3 approved a plan to ease concerns from one of its top power providers regarding a signed law by Florida Gov. Ron DeSantis that will lead to the district's possible future dissolution. The district, which is the overseeing governing...
GoofGoof
Premium Member
negotiations have been ongoing since at least May…Nothing groundbreaking here, but a takeaway from this article is confirmation that Disney is engaging in conversations with state legislative leaders and Gov. DeSantis' office.
Reedy Creek replacement in the works
“We are not yet announcing the Reedy Creek plan, but we will.”
hmmm
Sirwalterraleigh
Premium Member
Lmao!!Small related story. The full article is behind a paywall, but the summary is Duke Energy (one of the largest suppliers of electricity to WDW through RCID) asked for RCID to post a letter of credit from a bank for $3M in case the district is dissolved in June and hasn’t yet paid their May electric bill.
It is common practice for a company to require some sort of collateral posting in these types of commodity transactions, but it is usually based on the credit worthiness of the counter-party. I assume Duke is just being cautious and I’m sure they are within their contractual rights to request this, but it highlights that there are real costs to this “game” and despite the state’s assurances that nobody will be left holding the bag if/when this plan is executed at least one company is concerned that won’t really be the case. For now all this really means is RCID pays some LC fees to a bank and continues business as usual.
Disney's Reedy Creek district OKs deal in light of DeSantis dissolution law
Walt Disney World's Reedy Creek Improvement District on Oct. 3 approved a plan to ease concerns from one of its top power providers regarding a signed law by Florida Gov. Ron DeSantis that will lead to the district's possible future dissolution. The district, which is the overseeing governing...
That is the most “Duke energy” thing ever
Wendy Pleakley
Well-Known Member
Probably concerned that Florida, reeling from hurricane costs, won't be able to to pay the power bill on top of that billion in debt they get to inherit.
It's almost as if this was an ill thought out idea to begin with.
It's almost as if this was an ill thought out idea to begin with.
Sirwalterraleigh
Premium Member
…no…they just suck. The most egregious for profit energy company probably in the country
GoofGoof
Premium Member
Yeah, it’s not uncommon for any utility, especially when the business on the other side is not highly credit worthy. That’s what makes it interesting to me…that they felt the need to require this. Since it’s an LC and not cash margin paid to Duke there is no real economic benefit unless RCID defaults and doesn’t pay the bill in June. Then they would draw on the LC and get cash from the bank to be made whole. I wonder if the credit downgrade triggered something in the contract to allow this. I’ve seen contracts where the counterparty gets a certain amount of unsecured credit as long as they stay above a certain credit rating. If you drop below you need to post collateral.
Disstevefan1
Well-Known Member
RCID should simply stop paying WDWs electric bill and let WDW go dark.Small related story. The full article is behind a paywall, but the summary is Duke Energy (one of the largest suppliers of electricity to WDW through RCID) asked for RCID to post a letter of credit from a bank for $3M in case the district is dissolved in June and hasn’t yet paid their May electric bill.
It is common practice for a company to require some sort of collateral posting in these types of commodity transactions, but it is usually based on the credit worthiness of the counter-party. I assume Duke is just being cautious and I’m sure they are within their contractual rights to request this, but it highlights that there are real costs to this “game” and despite the state’s assurances that nobody will be left holding the bag if/when this plan is executed at least one company is concerned that won’t really be the case. For now all this really means is RCID pays some LC fees to a bank and continues business as usual.
Disney's Reedy Creek district OKs deal in light of DeSantis dissolution law
Walt Disney World's Reedy Creek Improvement District on Oct. 3 approved a plan to ease concerns from one of its top power providers regarding a signed law by Florida Gov. Ron DeSantis that will lead to the district's possible future dissolution. The district, which is the overseeing governing...
You will see how quickly TWDC pays the electric bill to keep their park lit.
Sir_Cliff
Well-Known Member
Umm, what?
Sirwalterraleigh
Premium Member
How much those shares of Duke up to?
…the notion of “not credit worthy”…like this entire dissolution of RCID…is still laughable
lazyboy97o
Well-Known Member
And yet rewarding such behavior is somehow “rational” and “cool headed”.
GoofGoof
Premium Member
I don’t disagree. $3M to Duke is like 3 cents to me. However, the manger of their credit group and/or some lawyers would still get reamed out if they didn’t address the situation and then they were out that money. In a corporate bankruptcy they would have a clear lean on the assets of the bankrupt entity and would get in line with other creditors and get paid eventually, especially if the cash on hand was enough to pay off the creditors.
I have no idea how this situation actually works. If the municipal entity who is the party to the contract is just dissolved where do the assets of the district actually go (in this case specifically the cash that could be used to pay the bills)? It’s not just Duke, it’s every vendor that RCID owes money to for goods or services. If those parties then need to get in line with the bond holders to try to recover what they are owed it may take months and they may all get pennies on the dollar. I think that’s the fear and why they requested the collateral posting. Now if this thing goes sideways and it’s a complete goat rodeo come June they cut the power off and collect what they are owed from the LC and walk away.