VERO BEACH — Members of the Vero Beach City Council heard Tuesday from Florida Power and Light that the company intends to make a viable offer to buy the city’s electric system.
Councilman Brian Heady said Florida Power and Light officials did not give him a solid dollar amount for the potential purchase of the city’s electric utility, but said that City of Vero Beach electric customers would get the same rates as all other FPL customers in Florida..
City of Vero Beach power customers currently pay 34 percent higher bills than current FPL customers just up the road in Sebastian and on the north barrier island.
According to Heady, he and other council members met individually with several representatives from Florida Power and Light at Vero Beach City Hall to go over the presentation plan for the July 20 special council meeting.
Heady said that Florida Power and Light officials explained – via a slideshow presentation that remained on their computer and for which there was no hard copy left behind for public record – that they plan to offer the city enough cash to get itself out of debt and out of its 20-year contract with the Orlando Utility Commission.
“They said it would be enough to (pay off) the bonds and to pay any penalties that might be owed to OUC,” Heady said. “But I don’t think there will even be any penalty.”
Vero Beach’s electric revenue bonds on the books amount to about $60 million and the OUC contract’s exit penalty would most likely be $20 million at this stage of the contract.
The penalty could have been as high as $50 million if the OUC were to invest in capital improvements to the city’s power plant or system, stranding assets for which the city would have had to compensate the OUC.
Heady said Florida Power and Light presented several different options of logistically accomplishing the sale. Such options would include ways to settling the OUC contract and the management or liquidation of the baseload generation rights and assets the city holds in the Stanton I and II coal plants and the St. Lucie nuclear power plant.
“One option would be for them to just take over the OUC contract from the city,” Heady said, adding, “Another thing they could do is set up a one-man operation where there would be one person to receive and resell the power from the baseload generation.”
Longtime critics of the sale Vice Mayor Sabin Abell, Councilman Tom White and top city staff have stated publicly that Florida Power and Light would never give Vero Beach customers the same rates as the rest of the customers on FPL’s system.
Representatives from the Florida Municipal Electric Association testified at a legislative delegation meeting this spring that FPL would impose a “buy-back surcharge” that would be tacked onto bills to help the electric company recover its costs of acquiring the Vero Beach electric system.
Heady said there was no mention of such a charge by FPL on Tuesday.
“So I specifically asked about a buy-back surcharge and they said no buy-back surcharge and we would get FPL rates,” he said.
Utility activist and CPA Glenn Heran, upon hearing about the meeting and the offer on the table, said he was in disbelief.
He and fellow activist Dr. Stephen Faherty, along with former Vero Beach City Councilman Charlie Wilson, have led the charge to get the city out of the electric business.
“I feel like we won today, like all the customers of the City of Vero Beach Utilities won today,” Heran said.
Though he fully expects the current administration to attempt to take credit for a sale that was thrust upon the city by an up-ending election last November and the threat of a referendum to force the sale, Heran said the end result is all that matters.
“I don’t care who takes the credit as long as it gets done,” Heran said of the potential sale of the city’s electric system.
If the city were to accept the terms, once FPL lays out specifics, the sale and transition to the power company could take several months to upward of one year to complete.
It is also expected that the Florida Municipal Electric Association would file litigation to block the sale, according to Heran. The association represents more than 30 other municipal electric utilities in the state.
FPL will present its plans and proposals during a public, special meeting of the Vero Beach City Council at 3 p.m. July 20 at City Hall.
The meeting will be televised and Mayor Kevin Sawnick has stated that he will not only allow public comment, but also encourage it.
However, Florida Power and Light officials have said that they will not answer direct questions from the public at that meeting.