Dear Mr. Copelan,
Thank you for giving Peppermill the opportunity to respond to your March 9, 2012 article under the headline, “Green Surrenders To City Buy Out of Gas Company” and the sub-headline “Claims Business Killed By Boycott.”
The entire story is premised on the false assumption that a “boycott” by the Peppermill “killed” Ms. Green’s business. This assumption is supported by the Receiver’s statement that Ms. Green’s company “has not sold a liter of gas to any business owned by the Peppermill in quite some time.” This statement was false and you should have verified its accuracy before publishing the story.
Although it never made economic sense for Peppermill’s casino properties to purchase piped propane from Wendover Gas Company, Peppermill continued to use Wendover Gas Company to service its non-casino properties. In fact, Peppermill’s non-casino properties have been customers of Wendover Gas Company for more than a decade. This easily verifiable fact proves there is no Peppermill “boycott” of Ms. Green. Since the Receiver’s false statement fit nicely into the anti-Peppermill narrative you chose not to even attempt to verify its accuracy before publishing the story. Had you sought to confirm this false statement with the Peppermill prior to publication you could have avoided publishing the false and misleading story.
Like Peppermill’s casino properties, the residents in Wendover, Utah (and some in Nevada) have also determined that piped propane is not a cost effective alternative for them. As a result, Ms. Green’s underground pipelines in Wendover, Utah have gone unused. This fact was referenced at the March 6, 2012 City Council hearing, but was not mentioned in your article. These residents and businesses were not alleged to be part of a “boycott” to “kill” Ms. Green’s business.
Since it is implausible to blame a company’s financial troubles on the loss of a customer more than ten years ago, you attempted to shore up the false narrative with this statement: “While at first the boycott was painful the loss of two casinos customers was survivable given the four other major properties were with Wendover Gas. Then the Peppermill began to expand and as the company began to buy its competitors the number of clients on Green’s books began to contract.”
The Silver Smith and State Line casinos filed for bankruptcy in January of 2002. Following approval of the bankruptcy court later that year Peppermill acquired the Silver Smith property and another party acquired the State Line property. Contrary to your statement, the acquisition of the Silver Smith by the Peppermill had no effect on Wendover Gas Company. The Silver Smith had its own propane tanks before the acquisition. Peppermill kept servicing the property through its own propane tanks after the acquisition. This acquisition, nearly ten years ago, was also not the cause of Wendover Gas Company’s financial troubles.
Following the loss of the Peppermill as a customer in 2001, Ms. Green continued to operate her business until October of 2008 when the company was placed in receivership. The Peppermill is not responsible for the failure of her business, nor should it be obligated to subsidize her business by paying uncompetitive prices.
This leads to the next theme of your article, again supported by an unchallenged quote from the Receiver, alleging if “Peppermill had approved of LNG system they would have saved $200,000 this winter alone.” Some of Peppermill’s problems with the proposed LNG system were described in its March 14, 2012 status report in the Wendover Gas Company receivership proceeding. Initially, the LNG proposal was not from Wendover Gas Company and it was unclear what entities would be selling the LNG to Peppermill and how they would relate to Wendover Gas Company. The individuals making the proposal stated approximately $2 million would need to be invested to purchase a “gasification facility” in Wendover but it was unclear how that would be financed or who would own the facility. The individuals making the proposal stated they had no experience running an LNG facility for a municipality and they could only give a few examples of similar systems in operation. In order to switch to LNG the Peppermill would have to incur an estimated $487,500 in conversion costs, including the replacement of two boilers that could not be converted without losing factory maintenance and warranties. The Peppermill would then be relying upon an unnamed “seller” to supply its critical energy needs, transporting LNG long distances over difficult mountain ranges. The savings estimates were uncertain, but it was clear it would take a long time to recover the conversion costs even it everything went as planned. The proposal was far from the risk-free deal it was represented to be.
These are a few examples of the false and misleading statements in your story. Taken as a whole, your story gives the entirely misleading impression that a “boycott” by the Peppermill is the cause of Wendover Gas Company’s financial troubles.
It is Ms. Green who now desires to sell her business to the City, subject to an agreement on the appraised price. That decision is not being forced on her by the City, the Peppermill or others. Perhaps Ms. Green’s proposed sale to the City is the best option given the City’s potential access to low cost financing unavailable to private parties. Perhaps she could sell to another private company. However one thing seems clear, Ms. Green’s company has been in receivership for over three years and that cannot continue forever.
Thank you for the opportunity to express our views and clarify this matter.
Sincerely,
William Paganetti
President