VERO BEACH — On Monday, Acting Electric Utility Director John Lee rode to Juno Beach with utility activists Dr. Stephen Faherty and CPA Glenn Heran to meet with Florida Power and Light.
The purpose of the visit was to present a financial model Heran has developed to FP&L officials. The Vero Beach City Council has seen abbreviated versions of the model, but has resisted attempts by Councilman Brian Heady to present the interactive spreadsheet at length during a public meeting. The model lays out various scenarios for selling the electric utility to FP&L and it has been widely panned by the city.
“We didn’t want to do anything behind the city’s back and we didn’t want anyone to think that we were going down there to try to negotiate a deal or anything on our own, we just wanted to show them the model,” Heran said. “And we didn’t want anyone to say that the trip cost the city anything, so Steve drove and John rode with us.”
Heran said he’d never shown the entire presentation to a member of the city staff before, though he has shown it to top-ranking county staff and both individually and as a group to all five members of the Board of County Commissioners.
“We asked the FP&L folks if they could find anything in the model that was inherently incorrect,” Heran said. “And they couldn’t find anything.”
The model takes into account what the city might receive as a sale price for the electric utility, how that money could be invested, how it might affect property taxes assessed by the city and how — both for the individual and for the city and the county as a whole — the net effect of not owning the utility but having FP&L rates would result in huge savings.
Currently FP&L rates are about 32 percent higher than rates paid by the City of Vero Beach Electric customers for the same power.
The aggregate savings for Indian River County, Heran has estimated, would be somewhere between $18 million and $28 million per year, depending on the sale price the city could get for the utility and the right to service its 34,000 customers.
The interactive part of the model allows the user to plug in different hypothetical numbers for a sale price and see the results. The utility has not been formally appraised, but city officials have estimated its value as being $150 to $400 million, depending on what is encompassed into that package. City Manager Jim Gabbard estimated that the under-grounding that was done for barrier island residents is worth $100 million.
Heran argues that “any number greater than zero” would result in a positive effect for both the city and its residents, though he agrees that the city should and will get a fair price from FP&L for the utility.
