VERO BEACH — Vero Beach City Manager Jim O’Connor last week warned the city council it could be headed for financial disaster if a judge rules against the City in its legal dispute with the town of Indian River Shores over electric service.
Vero and the Florida Power & Light diverge greatly in what they think Vero’s customers and infrastructure in the Shores are worth. The City wants $64.5 million to get out of the Shores and let FPL take over as power supplier, but FPL is only willing to pay $13 million. The Town is so determined to get rid of Vero Electric and bring in FPL to get lower rates that it has filed suit to force a sale.
“We’re getting closer every day to having a judge in one of these court cases rule,” O’Connor said, adding that the pending disputes will all likely end up at the Florida Supreme Court. If the court sides with the Shores, Vero would lose leverage and might be forced to sell at a fire-sale price, much lower than $13 million.
The topic prompted discussion at last week’s Vero Beach City Council meeting, when Councilman Dick Winger reiterated that the Shores’ calculations of what the sale price should be do not take into account all of Vero’s contingent liabilities and potential “stranded costs” to the Florida Municipal Power Agency, and that Vero’s position is that the Shores should absolutely cover a portion of those costs if they want to exit Vero’s system. Winger said the two numbers — the $64 million and the $13 million — are worlds apart because “it’s the typical apples and oranges” and that the Shores has done little to justify its version of the numbers.
Addressing Winger’s “apples and oranges” comment, O’Connor explained that a court-mandated sell-off is a completely different reality and a different negotiating position than voluntarily selling electric customers and assets to FPL. “If the judge says you’ve got to vacate the premises, then you don’t have a going concern. You just have a lot of assets sitting on poles, so you get down to another number.”
Councilwoman Pilar Turner urged her colleagues not to underestimate the Shores’ will to stick the fight out until the end. “I think there’s the real risk that if the court rules against us, we’re going to be in a fire sale,” she said.