VERO BEACH — City Manager Jim O’Connor said Thursday after reading that Indian River Shores officials think Vero is attempting to negotiate the sale of Shores electric customers to Florida Power and Light that there’s no deal in the works.
What O’Connor said he takes issue with is, “that someone could draw a conclusion ‘there is a possibility of a deal’ based upon a very short conversation I may have had with FPL.”
“I personally would not draw that conclusion,” O’Connor said.
April 16, 10:55 a.m.
VERO BEACH — Attorneys for the Town of Indian River Shores, and separately, officials from the City of Vero Beach have been working on a deal to sell the portion of the Vero electric system within the Town to Florida Power and Light.
“Our only priority is securing long-term rate relief for our citizens,” said Indian River Shores Mayor Brian Barefoot in a prepared statement. “If that can be achieved through a partial sale of utility system assets in the Town, then it is certainly an option to explore.
“We continue to believe that a sale of the entire Vero Beach electric system to FPL is in everyone’s best interests, and hope that all parties involved find a way forward.”
The advantages to Vero would presumably be an infusion of cash plus the dismissal of the Shores’ lawsuit against Vero. The advantages for the Shores would be lower FPL rates and not having to wage a costly legal war with their close neighbors.
The big loser in the deal could be electric customers in the unincorporated county, who would still be served by Vero electric, and city residents who would need to absorb much of the lost revenue that the Shores brings into the electric utility to cover the fixed costs of operation and maintenance. It’s not clear what the impact of this partial sale would be as the terms are not yet known.
Shores customers make up about 9 percent of Vero’s $90 million in annual utility revenues, or roughly $8 million per year. Of that $8 million, 6 percent or nearly a half-million dollars is transferred directly into the general fund to keep property taxes low.
About 80 percent of the Shores is on the City of Vero Beach electric system, while 20 percent of Shores residents north of Old Winter Beach Road are already on the FPL system as that area was not in the original footprint of the Town, but was annexed in later.
News of these negotiations was obtained by County Attorney Dylan Reingold in the form of a letter from Shores outside legal counsel to Vero’s lead utility attorney Robert Scheffel “Schef” Wright.
The letter outlines in a broad context the conversations that have taken place so far between the Shores and FPL and then FPL and Vero officials.
Shores officials had been exploring various options for providing electric service to Shores residents after a franchise with Vero expires in November 2016. Following those discussions, FPL opened up a dialogue with Vero Beach City Manager Jim O’Connor and the city’s attorneys and now it appears, according to the Shores, like there’s a possibility of a deal.
It looks ahead at opening up discussions in the mediation session scheduled for May 1 in the state-mandated pre-trial conflict resolution process.
May states in the letter to Wright, “Although we continue to believe that the optimal solution is for the City to sell its entire system to FPL, we also understand that the Florida Municipal Power Agency (FMPA) will not allow the city to sell its entire system.
“We also understand that a sale of only the portion of the system within the Town, which is a small sliver of the City’s overall system, would not require approval by FMPA,” May said.
“While we have not seen any concrete details involving a partial sale to FPL of the City’s electric assets in the Town, we believe that this concept could serve as an important building block in reaching a comprehensive settlement that would resolve all the disputes between the Town and the City,” he said, referring to the Circuit Court lawsuit that would have tested the question of whether or not the Shores has the home rule power to choose its electric provider.
The lawsuit, should it proceed, would dredge up some unsavory Vero Beach history and potentially depose current and former city employees and elected officials going back nearly a decade. The Shores has also sued for damages in the form of the a refund of a portion of electric rates paid since 2008 when the Shores says Vero broke state law.
May says in his letter that he expects this potential deal to be discussed at the upcoming Vero Beach City Council meeting on Tuesday evening and then at the Indian River Shores Town Council meeting next Thursday.
Neither Indian River County nor the City of Vero Beach has officially commented on the development, but Reingold forwarded the Shores’ letter to Vero out to all five County Commissioners and top county officials.
