Yale avoids bankruptcy, utility trustees approve gas settlement agreement

Michelle Charles, Stillwater NewsPress, Okla.
·2 min read

Aug. 10—The City of Yale will be able to avoid declaring bankruptcy for its Water and Sewage Trust Authority after reaching an agreement with the natural gas supplier that filed suit against the town.

In a Payne County District Court filing that sought to recover money from the company that owned the pipeline delivering the gas, the town's attorney argued that the amount being billed was based on measured usage that far exceeded the gas actually flowing through Yale's meters.

Although the Oklahoma Legislature responded to the situation by creating a grant fund specifically for Yale and several other small towns that were left in dire straits after receiving huge gas bills when costs skyrocketed during Winter Storm Uri in February 2021, the supplier filed suit in Tulsa District Court to recover $1.4 million plus 18% interest that was adding an estimated $25,000 per month to the town's balance.

The City Commissioners met in their capacity as trustees of the town's utility authority on July 15 to authorize their outside counsel to proceed with a bankruptcy filing.

The intention was to dissolve the Water and Sewage Trust and sell the small amount of property it owned under a Chapter 7 liquidation procedure.

But that won't be necessary if the agreement the trustees approved Tuesday goes through.

Yale City Attorney Roger McMillian told the trustees of the authority, that BlueMark Energy, LLC has agreed to allow the town to submit its grant application to the state and is willing to accept $1,180,540.93 from the grant proceeds.

If the town receives more than that, it will be allowed to keep the excess, up to approximately $1.4 million under the agreement. Any proceeds received above that amount will go to BlueMark Energy.

City Clerk Deanna Couch told the News Press any funding the town receives above the settlement amount still won't make it whole for what it has already paid BlueMark and what was spent to address the fuel crisis and keep gas flowing to residents. She said city staff did what they had to do.

"We didn't want to be on every news channel as the town that let their people freeze," Couch said.

Trustee Larry Brown, who had argued against the bankruptcy filing in July because believes the town was defrauded by its delivery company, said he still feels that way, but he's glad Yale has a way out.

There really wasn't another option, he said.

Negotiation was still going on up to the last minute, several trustees said. They all expressed relief at having a chance to resolve the situation without having to take the drastic measure of being the first Oklahoma town in recent memory to file bankruptcy.