Intense interest from FP&L could net contract to buy Vero utility by summer

VERO BEACH — After a year of not much action by Florida Power and Light regarding the purchase of the Vero Beach Electric Utility, the power provider began the new year with ramped-up curiosity and pointed questions.

Vero Beach’s Acting Electric Utility Director John Lee told the City Council Tuesday that he’d received a list of 22 questions that FP&L needs answered to further what Lee called a more intense due diligence phase. Because the questions require data from several different city departments, Lee said the staff was forming a team of people from the power plant, engineering, finance, and others, to get the answers back to FP&L as soon as possible.

“They (FP&L) are on top of this,” said Vero Beach Acting Electric Utility Director John Lee. “The questions are detailed and very pointed.”

Lee said FP&L has made queries about the system’s design and operation. The answers will be shared with council members and will be public record.

Councilwoman Tracy Carroll, who was appointed as the taskmaster on the sale to FP&L, said she was told that if responses were timely and all went well, the city and FP&L could begin negotiating a contract for sale as early as this summer.

Councilman Craig Fletcher said he was skeptical about that timing and Lee seemed to concur.

“We all have our own idea on how long it’s going to take, but FP&L is in the driver’s seat,” Lee said.

The push to get the city out of the electric business was prompted by soaring electric rates in 2009, which were about 60 percent higher than neighbors a few miles away in FP&L territory were paying for the same power.

The city has made some progress, but even with the latest rate reductions in January due to low fuel costs, Vero’s rates are still 23 percent higher than FP&L.

The 1,000 kilowatt per month customer, which is considered an average household and is used as a baseline for rate comparisons, on the Vero Beach system pays $113.14 plus tax, where FP&L customers pay $92.69 plus tax.

At $113.14, which is artificially low due to market factors in the current fuel market, Lee indicated that Vero Beach rates would most likely go up.

“Are these rates sustainable?” Lee asked rhetorically. “No.”

Since the new City Council took over and set a policy that the city would sell the utility, members have questioned every major and minor expenditure to determine if it’s absolutely necessary.

Lee said that, although movements toward a sale seem to be progressing, the city must still act like it is in the electric business.

“We have an obligation to investigate a sale, we’ve done a lot,” Lee said.

“The sale to FP&L is still a distant possibility and until I have a time frame, I’m not going to put anything off that is critical to the system,” he said.

For example, Vero Beach must remain compliant with state and federal regulations and must maintain a mutual aid agreement in case disaster strikes and resources are needed from other electric utilities to get the city’s electric back up and running.

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