VERO BEACH — The Vero Beach City Council Tuesday voted 4-1 in favor of extending an exclusive negotiating period with Florida Power and Light for the sale of the Vero Beach electric utility. The exclusive period, which was extended three months from the Dec. 31 deadline, would have expired on March 31.
During that time, the city is prohibited from entering talks with anyone but FPL as a potential buyer of the utility.
Both FPL and the city’s transactional attorneys from the Edwards Wildman law firm said the additional time is necessary for them to nail down all the elements of the purchase agreement and to extricate the city from power contracts with the Orlando Utilities Commission and the Florida Municipal Power Agency.
Edwards Wildman attorney Rick Miller said “things are progressing” on the negotiations and that “our negotiations with all the parties have been in good faith.”
Miller said the fact that there is a glut of electricity right now in Florida is not helping the city unload its power contracts because of the simple law of supply and demand.
“This is an economic question as much as anything else,” he said.
Mayor Pilar Turner said the six months will give the negotiators a deadline to determine whether or not the sale is a viable option.
“Is this a go or a no-go? We can either find a way out of here or we can’t,” she said.
Miller conceded that developments between now and September would be crucial.
“A period of six months is reasonable. If there is no path forward in six months, it might not happen,” Miller said.
Only Councilman Jay Kramer voted against the extension. Kramer has maintained that competition in the process could result in a better deal for Vero Beach residents.
Councilman Dick Winger said it’s critical for the city to get out of the electric business because the odds are against Vero ever being competitive in price due to its heavy reliance on coal-fired energy.
“I don’t think that the small guy belongs in the power business anymore, I think you need to be at least as big as FPL,” Winger said. “I think it’s more urgent than ever to get Vero Beach out of the power business.”
Winger also said the city needs a partner with the size and strength of FPL to help the city exit its relationships with OUC and the FMPA power cooperative. FPL officials have volunteered to join the city in a meeting with FPMA on April 16.
The council also voted 4-1, with Kramer again dissenting, to increase the retainer amount the city will pay to the Miller and his team at Edwards Wildman law firm for handling the negotiations with FPL, OUC, the FMPA and various other entities.
The fees had been capped at $500,000, but now the firm can bill up to $700,000 without coming back to the council for approval. Fees billed to date total $199,741.
With regard to the $700,000, attorney Miller said, “If you do that or within close to it, you will have gotten quite a deal.”
The legal fees, as well as consultant fees for the appraisal of the utility, are paid from the Vero Beach Electric enterprise fund and are ultimately charged to electric customers in their monthly bills.