New Vero Beach Council ready to delve into soaring electric rates

VERO BEACH — At the urging of newcomer Charlie Wilson, the Vero Beach City Council will begin Monday to tackle the morass of issues facing it’s battle-worn electric utility.Item one on the agenda will be making sure that the past year’s financial debacle does not have a sequel.The city is inviting anyone who has concerns about the electric utility to come to Council chambers at 9:30 a.m. on Monday. They’ve also invited representatives from the Orlando Utility Commission (which the city is set to join in January once it gets out of its present contract) and FPL to be present to hopefully provide some answers. “There are many financial, technical and legal questions that need to be answered in public,” Wilson said.As a major part of his campaign stump speech, Wilson vowed to challenge the OUC contract and to get the city out of the electric business if it can’t match the value of FPL. Every day, Wilson said he discovers more about how the city finances work and about the intricacies of the electric utility. One mystery still to be answered is where the city will get an estimated $200,000 to fix Unit 5 of the power plant. Units 2 and 5 work together to provide citizens with inexpensive power during peak times when buying power on the open market would be cost-prohibitive.Another unknown is whether or not the city will face penalties for some routine maintenance that was either not performed or not adequately documented by utility staff.  What is known — in rough terms — is the downward financial slide the electric utility took over the past year. From Oct. 1, 2008 to July 1, 2009, the City of Vero Beach Electric utility blew through a $14.5 million surplus and reported that the operating fund was “broke.”And in May and June electric bills shot up due to an enormous “power cost adjustment,” which turned out to be Vero Beach’s share of a $6.5 million penalty owed the Florida Metropolitan Power Agency. The FMPA, to which Vero Beach will belong until the end of the year, was forced to pay Florida Power and Light for unauthorized use of FPL transmission lines. Wilson has said he will look into whether or not the City can petition to get a refund on all or part of the penalty, but at this point, it’s akin to spilled milk.But the $14.5 million surplus in operating cash was gone before the rate hikes hit this summer. Where did it go?According to explanations given by R.B. Sloan, the former director of the electric utility who moved on to a position in Virginia last week, part of what ratepayers saw in their bills over the summer was simply delayed pain.”When the gas prices started going up, we were only passing about 50 percent of the power costs that we were being billed for on to the customers,” he said.So the city, rather than giving ratepayers a “heads up” that FMPA had made a $100 million bad hedge on buying power and more high-cost power was to come, they drained the utility’s reserves to pay the bills, until they just could not continue the bleed. Actually, they could not continue the bleed and continue to transfer millions into the general fund.

Related Articles

Comments are closed.