VERO BEACH — The City Council voted 5-0 Tuesday night to accept a 1.1 percent electric rate reduction as recommended by city staff.
The reduction would be effective on power used from Jan. 1 forward but would show up on bills received in February.
The City had increased rates 1.9 percent on Oct. 1 based upon lagging revenues and higher than projected fuel costs. An analysis of year-end figures showed a better financial picture, allowing the City to partially repeal that rate increase.
Councilwoman Pilar Turner acknowledged that “certainly any reduction is goodwill on our customers,” but questioned the prudence of adjusting rates every quarter, as the City typically only adjusted rates annually in the past.
Vice Mayor Jay Kramer said he supports quarterly adjustments, especially for times when the city is “out of the money” because an adjustment can be made before the reserve cash is depleted too low.
Councilwoman Amelia Graves asked Finance Director Cindy Lawson if the City would have sufficient cash reserves with the rate cut and Lawson said the City has 76 days of operating cash and, though she would like to see 90 days of operating cash on hand, she anticipated the utility moving toward that 90 days of cash by the end of the year.
City Manager Jim O’Connor pointed out that he did not need a council vote to adjust electric rates, but the council members said they wanted to vote on it.
“Thanks for doing this rate reduction. We out there in rate paying land do appreciate it,” said former councilman Ken Daige.
After the rate reduction, Vero Beach Electric customers will still be paying rates that are 33 percent higher than Florida Power and Light customers in other parts of Indian River County.
The Council also discussed the fact that they were disappointed that there has been no progress made on negotiations between FPL and the Florida Municipal Power Agency with regard to a plan to fast-track the sale of Vero elecric to FPL.
City officials were hoping that FPL and the FMPA could coalesce around a dollar amount that FPL would pay to the FMPA power co-op to allow the sale to go forward, with a discussion on Thursday and a potential vote in February.
Since there has been no news on whether or not the parties can agree on terms, discussion of the Vero sale would be delayed another month. The earliest the FMPA would discuss the deal would be late February, with the earliest that a vote could be taken would be late March.