Nashville Electric Expenses Questioned

Tennessee's comptroller has issued a review that found improper purchasing practices, credit card use, and other questionable activities at Nashville Electric Service, an enterprise of the Metropolitan Government of Nashville and Davidson County.

The consolidated city-county government requested that the comptroller's office review the public electric system's expenses.

NES serves more than 360,000 customers in mid-Tennessee, including Nashville and portions of six surrounding counties. The utility has about $540 million of outstanding debt rated AA-plus by Fitch Ratings and Standard & Poor's.

There is no indication in the comptroller's local government audit review that any bond proceeds were misspent.

Auditors found that NES paid a manufacturer and its distributor $17 million over the last eight years for electric power cable that was not properly bid, and that specifications for electric power cable were tailored to match the type of cable provided by the distributor.

In addition, a retired field superintendent for the utility performed consulting work outside of NES and promoted the distributor's products at seminars and to other utility districts, but did not include the activities on conflict of interest disclosures, auditors said.

The comptroller's review also found that the utility company's vice president and chief information officer improperly used NES credit cards.

The review uncovered a contractual arrangement with a local resort that allowed certain employees to attend events and play golf for free in exchange for the lease of NES transformers, that employees made personal purchases on NES credit cards, and some employees received reimbursement for education or training programs based on altered documents.

"The issues uncovered during our review are very serious and I applaud NES officials for the corrective measures they have adopted in response to our findings," said state Comptroller Justin P. Wilson. The review was given to the local district attorney's office, he said.

Nashville Electric chief executive officer Decosta Jenkins said some changes have been implemented, and other policy and procedural modifications are under consideration.

"The recommendations from the state comptroller's office have helped us look at our organization and strengthen NES going forward," Jenkins said in a statement on the utility's website. "Our goal is to be transparent, open and honest with our customers."

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Tennessee
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