VERO BEACH — After a lengthy, technical explanation of why it appears that Vero Beach will not be able to sell its electric utility to Florida Power and Light, attorney Robert Scheffel “Schef” Wright said simply, “It’s not good, folks. It’s not good.”
Wright was referring to news that arrived at City Hall on Monday afternoon in the form of a letter from Orlando Utilities Commission General Counsel Chris Browder.
The letter stated that OUC had reached the end of the road in negotiations with the Florida Municipal Power Association over language in Vero’s long-term agreements with the statewide power co-op regarding revenue bonds that were floated to fund power plant projects.
The major sticking point, Wright explained, is the need of OUC for its bondholders’ financial interests to be protected first and the need of the FMPA for its own bondholders to be protected first. Neither side or its attorneys would compromise on that point, resulting in the stalemate.
At a critical point in sale negotiations with FPL, early on in the process, executives of the Orlando utility had agreed to take over Vero’s share of the power purchase rights and responsibilities with the FMPA power co-op. The rest of the deal that’s been worked on for about two years was based upon Vero assigning those power contracts to OUC.
Now, according to Browder’s letter, that can’t happen after all.
“We have a pretty clear failure of our ability to satisfy our agreement,” Wright told the Council members Tuesday.
How something so apparently important could have been overlooked was explained by Wright, as it was relayed to him by OUC officials.
“In October 2012 when they (OUC) signed the agreements, they were under a lot of time pressure,” Wright said, so a clause was written in allowing OUC to work out the bond issue with FMPA later on.
City Attorney Wayne Coment pointed out that OUC would have only been held to the Oct. 2012 agreement should the City close on the sale.
When asked by Mayor Dick Winger where the City goes from here, Wright said he was set to meet with lead attorneys from FPL Tuesday afternoon to determine where the parties stand with regard to the Purchase and Sale Agreement that was approved by Vero voters in a March 2013 referendum.
Wright said he would report back what he finds out from FPL and give the City a formal opinion on the status of its pending contracts. The sale agreements with FPL would expire if no closing occurred by December 2016.