VERO BEACH — The Vero Beach City Council Tuesday voted 3-2 to delay any action for at least two weeks on a plan from Florida Power and Light to assess a $26 million fee to electric bills for three or four years to fund the city’s half of a $52 million payoff to the Florida Municipal Power Association to extricate Vero from the power co-op.
Councilman Craig Fletcher and Councilwoman Pilar Turner wanted to move forward and give FPL clear direction to negotiate based upon that proposal with the FMPA, but Mayor Dick Winger intervened with a motion to table the item.
FPL made a presentation to the council, but council members had not been given an advance copy of the data to be presented, so they saw it live as it was also given to the public via Powerpoint slides shown on a screen.
FPL had scheduled private meetings with three of the council members individually for Friday, but Mayor Dick Winger told VeroNews.com that those meetings were cancelled and he had no updated information going into Tuesday’s meeting.
Winger also said FPL had the $52 million number from the FMPA since Dec. 6 and took time over the holidays to mull that over and that it wasn’t fair for FPL to ask the city to provide a snap decision on the same day of a proposal that would cost the city’s 34,000 ratepayers $26 million.
The presentation by FPL officials summarized the savings Vero electric customers could expect to see with either a three-year or four-year surcharge plan. With the three-year plan, a city resident using 1,000 kilowatt hours of electricity would save $10.94 per month or roughly 8 percent on their electric bill or with the four-year plan the savings would be $14.02 per month or 10 percent from the current city electric bills.
If the city decides to spread the payments on the $26 million over four years, the ratepayers’ bills would be lower but it would take longer to pay FPL back the $26 million in interest-free loans it has offered to the city. If the three-year option were chosen, the discount on rates would be less, but Vero customers in the city, the county and Indian River Shores would get low FPL rates one year earlier.
Whatever surcharge were imposed would be on top of FPL rates — not on top of City of Vero Beach rates. Rates would go down immediately after closing and then all the way down to FPL rates after the $26 million was paid off.
FPL rates are currently 24 percent lower than Vero rates.
In addition to hours of comments from members of the public in support of and in opposition to what’s being called the “surcharge” proposal, council members offered lengthy input of their own.
Winger read into the record a nearly 2,200-word statement outlining his views on the surcharge plan and on the state of the sale.
“It is time to be frank and confront reality. The current FPL contract has the city and its electric customers in limbo. Major issues of how to resolve the FMPA and Orlando Utilities Commission binding contracts remain unresolved after nearly three years of trying. During this time, City Council has not acted to get rates down,” Winger wrote. “We must work to conclude the sale this year, but we must at the same time pursue all available options for lowering rates.”
Winger’s speech continued, laying out many possible maneuvers the city could try to get its rates down, from refinancing its debt to decommissioning its Big Blue power plant, which would result in the layoffs of dozens of city workers.
Yet, Winger acknowledged, completing the sale to FPL is the only way that Vero will be able to dig itself out of the massive hole that is the underfunded pension plan.
The combination of funding that plan and FPL taking on about $14 million in pension liabilities for electric utility employees would save the city about $3.7 million per year.
Both Winger and Vice Mayor Jay Kramer said they wanted to send the proposal to the city’s Finance Commission and Utility Advisory Commission to be vetted, but Councilwoman Amelia Graves said that it would be premature for the commissions to vet a contract with holes in it.
Graves suggested that when a new contract for the sale of the electric utility was negotiated, including all aspects of the deal necessary to get out of the FMPA, only then should the commissions examine the proposed deal.
When FPL failed to get a vote supporting the FMPA surcharge proposal, FPL Internal Affairs Director Amy Brunjes asked the council to at least direct City Manager Jim O’Connor and Winger to make some calls to facilitate the scheduling of meetings between FMPA and FPL to begin hammering out the details of how Vero could potentially get out of the FMPA and close the sale by the goal date of Jan. 1, 2015.
Brunjes said FPL believes this date is achievable if all the parties — including all five members of the council and FMPA officials — work together to make the sale happen and not undermine the sale.
The next meeting of the Vero Beach City Council is scheduled for 6 p.m. March 18 at City Hall.
