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RFK Son's Energy Firm Will Help Needy Pasadenans Pay Electric Bills

December 04, 1988|MIKE WARD | Times Staff Writer

PASADENA — A company that was founded by a member of the Kennedy family a decade ago to supply low-cost heating oil to the poor in Massachusetts will begin next month helping Pasadena residents pay their overdue electric bills during financial hardships.

The nonprofit Citizens Energy Corp. is bringing its mix of energy-marketing savvy and altruism to Pasadena by selling wholesale electricity to the city Water and Power Department and donating a percentage of its earnings to a new city fund to help needy families pay their electric bills.

Michael Kennedy, son of the late Robert F. Kennedy and chairman of Citizens Energy Corp., will outline his company's participation in the city fund at a meeting of business and civic leaders at 8 a.m. Dec. 20 at the Pasadena Hilton. The meeting will open a campaign to encourage businesses and other utility customers to contribute to the city's Project APPLE (Assisting Pasadena People With Limited Emergencies).

Citizens Energy Corp. was founded by Michael Kennedy's brother, Joseph P. Kennedy II, and William E. James during the energy crisis of the late 1970s, when fuel-oil prices were soaring and poor families could not afford to heat their homes.

By buying crude oil on the world market, having it refined and then selling byproducts such as gasoline on the open market, Citizens was able to make enough money to sell heating oil at a discount to the Massachusetts fuel-assistance program for the needy. The program continues today. Company officials said they furnished more than 3 million gallons of heating oil to Massachusetts last year at 30% to 40% below the market price.

Started Joint Venture

In addition to the oil business, Citizens distributes natural gas and electricity and has started a joint venture with a New Jersey pharmaceutical company to sell prescription drugs by mail at a discount. It is also exploring for oil in Africa.

Earnings from its various ventures are used for everything from helping the poor pay energy bills to running a demonstration farm in Nigeria.

Joseph P. Kennedy II left the company after he was elected to Congress in 1986, but the company has continued to grow under his brother, reaching $1.5 billion in revenue last year. It has 70 employees.

Beverly Watts Mayhew, director of programs and communications, said Citizens Energy Corp.'s subsidiary, Citizens Power & Light Corp., is now on its second power contract with Pasadena. She said the company has given $6,000 to Project APPLE from its first contract, involving the sale of electricity in 1987, and expects to contribute an additional $12,000 to $14,000 under a second contract, which began in October and will run for six months.

Citizens' role is that of a broker, finding power companies with surplus electricity and than arranging to buy, transmit and resell it.

Under the current contract, Pasadena is paying Citizens about $900,000 to supply enough electricity to meet 10% of the needs of its customers, said George Morrow, manager of utility resource planning. It would cost the city an additional $250,000 to generate the same amount of electricity in its own power plant. The electricity from Citizens is transmitted to Pasadena from British Columbia.

Morrow said the city is limited in the amount of outside electricity it can purchase by such constraints as the availability of transmission lines and the need to run its own power plant at efficient levels.

Edward Aghjayan, deputy city manager, said the city agreed to buy electricity from Citizens because it offered the cheapest price. The contributions to Project APPLE are an added bonus, he said, and the city intends to continue Project APPLE indefinitely through donations, regardless of whether it continues its relationship with Citizens Power & Light Corp.

Stimulate Contributions

In a telephone interview, Michael Kennedy said he hopes his company's initial donations will stimulate contributions by others to Pasadena's Project APPLE.

"That's part of our deal--improve the community spirit," he said.

Kennedy joined Citizens Energy at its beginning, took time out to attend law school and returned two years ago.

He said that although "it has been a tough year for us in the oil market," diversification into such areas as the brokerage of electrical power has helped Citizens grow.

Providing electricity to Pasadena will not generate a large amount of money, he said, but fits the company's goals.

"There's a basic entrepreneurial spirit that drives us," Kennedy said, "and we always try to do some social good."

Hardship Cases

Aghjayan said Project APPLE is designed to help residents who have encountered hardships, fallen behind in their bills and are in danger of having their electricity shut off.

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