ELECTRIC Part 1: Power plant not villain in City’s electric rate crisis

By Lisa Zahner

This is part one of a two-part story, originally published in our sister publication, Vero Beach 32963, about the role of the Vero Beach Power Plant and the history of the City of Vero Beach Electric utility. Part two will appear on Tuesday.

While most residents regard the big blue Vero Beach power plant, with generators that go back to the early 1960s, as a museum piece, the surprising news is it actually produced electricity in 2008 at a 20 percent lower cost per kilowatt hour than what the City of Vero Beach paid the Florida Municipal Power Agency for the electricity it bought and then resold to residential utility customers.The bad news is the power plant didn’t produce a great deal of electricity. If Vero Beach Utilities customers had been forced to rely solely on the municipal plant, the amount of power it generated in 2008 would have kept the lights on in 4,500 local homes – leaving approximately 24,000 residential and commercial dwellings in the dark.

While the plant could have produced significantly more power if its generators were run to maximum capacity on a given day, it could at best fill the needs of fewer than half the utility’s 33,329 electric customers, and on a day when demand was at a peak, it would not be able to meet the needs of even a third of current customers.

But startling fact that this aging facility, nearing its 50th anniversary, produced power last year for an average cost of 6.8 cents per kilowatt hour – compared to the 8.4 cents the city paid for the power it purchased — illustrates anew that the electric rate crisis which has slammed Vero Beach has little to do with power plant operations, and more to do with the City Council and contract negotiations.

While the current City Council blames the ill-advised contract under which the city buys electricity from the Florida Municipal Power Agency on a predecessor, and insists significant savings will occur when Vero bids farewell to the FMPA next January 1, key details of the new 20-year contract that this City Council approved to buy power from the Orlando Utilities Commission have not been made public.

The city has now posted a “redacted” contract on its website, but blacked-out all of the numbers. Mayor Sabin Abell says the OUC insisted prices, penalties and contract terms not be disclosed for competitive reasons. So on what basis, other than faith, are residents staggering under this summer’s record electric bills expected to believe the new contract is better if details are a secret?

The big unanswered question, however, is why the City of Vero Beach should remain in the electric utility business – other than to milk money off electric bills to put millions into the city’s general fund — when the Utility Department largely acts as a middleman, buying most of its electricity from outside suppliers, and reselling it at a retail price as much as 50 per cent higher than Florida Power and Light.In part two tomorrow, read more about the history of the utility, how we got into the current situation and what the City of Vero Beach has to say about it.

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