State panel demands answers from Vero Beach on electric utility

VERO BEACH – After 15 months on hold, a complaint lodged against the City of Vero Beach Electric utility for operating an “unregulated price monopoly” has led the Florida Public Service Commission to come out swinging.

The PSC recently sent the city a list of pointed questions, indicating that the agency is taking up the complaint in earnest.

So far, the Vero Beach City Council has held off on hiring an attorney to fight back.

Instead, the consensus was that staff should hand over the figures as best it can and beg for more time if needed.

The answers are due in Tallahassee on March 3.

Among the data the PSC wants from the city is an accurate count of customers – both inside and outside the city – and an accounting of more than $26.5 million in expenditures that the city passes down via utility bills each year.

The PSC also wants to review the city’s electric territory as it stood in 1981 and compare it to the customer base today to see if having 61 percent of the customers outside the city limits is in line with the intent of the territorial boundaries.

“There were three points. The first is where the PSC asks the city to show them how they got around the Stan Mayfield legislation by making them come clean on the number of customers,” said utility activist and CPA Glenn Heran.

Heran and Moorings resident Dr. Stephen Faherty originally filed the complaint against the city with the aim of rectifying the plight of electric customers suffering from soaring rates.

The Stan Mayfield Bill would have required the city to set up a Utility Authority with proportional representation of customers.

That body would have had the teeth to set policy and rates. The bill, which remains on the books, requires municipal utilities with 30,000 to 35,000 customers and ratepayers outside the municipal bounds to comply.

By eliminating accounts with duplicate names if people or businesses had more than one electric meter, Vero Beach decreased its customer count in 2007 contending it only had 27,000 customers.

But on various public documents, the city lists a full complement of 33,408 customers.

The PSC not only wants this reconciled once and for all, it wants to know how the 27,000 number was derived and who was responsible.

“Second, the PSC asks the city to show them how they are using funds from outside city customers – to justify the cost of service for outside city customers,” Heran said.

According to records, the PSC wants to know why the city charges County and Indian River Shores customers $4.5 million in revenue for “Electric Non-Departmental Expenses.”

The city uses those funds to cover expenses such as consultants and $22 million in “Other Revenue Requirements.”

The city then transfers about $8 million from “Other Revenue Requirements” into the general fund coffers.

“The third point is for Vero to show their territory in 1981 and show the PSC their territory now, the number of customers then and the number of customers now,” Heran said, pointing out that because Indian River Shores, South Beach and mainland county areas were in a growth mode the past 30 years, the proportions have strayed way past what was intended.

PSC Senior Attorney Martha Brown has given the City of Vero Beach just a few weeks to answer these questions. Acting Electric Utility Director John Lee, who will return to his post as Customer Service Manager on Feb. 28, said the city does not capture some of the data in the way the PSC is asking for and the city doesn’t have territorial maps showing where customers were in 1981 or where customers are today.

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