VERO BEACH — A $30 million pitch by Florida Power & Light to purchase about 3,000 electric customers in Indian River Shores was approved unanimously by the Vero Beach Utilities Commission Tuesday, but without three votes on the city council, the deal is likely dead.
At the last minute, FPL deleted some problematic items from the formal offer, streamlining the terms to include just the Shores customers and infrastructure. A proposal to take over a high-voltage connector and substation between Vero and Fort Pierce – transmission assets reportedly worth more than $8 million – has been shelved.
Simplification of the offer addressed the concerns of committee objections, but did not overcome Mayor Jay Kramer’s objections to the lingering $12.4 million gap between Vero’s asking price and what FPL seems willing to pay. Kramer was seen as the possible swing vote, but he said, “As it sits right now, I’m going to vote no on this,” Kramer said of the anticipated action item next Tuesday.
“The $42.5 million stands and I don’t see coming off that,” Kramer said from the podium as he rose in public comment. “I’m not going to penalize the other customers.”
A three-page written offer was sent to Vero officials last Thursday, about a week after FPL’s shocking announcement that it would more than double its $13 million offer to purchase the 80 percent of Shores’ residents it does not already serve.
Though city officials immediately bristled at the still sizable “gap” between Vero’s asking price and what FPL is now offering, this latest offer from FPL was seen as the Shores’ best chance yet of getting FPL as the Town’s power provider.
“To make a transaction happen, you have to have a willing buyer and a willing seller. Here you have a willing buyer and a willing seller, it’s just a matter of what price,” City Manager Jim O’Connor said.
O’Connor said he had pleaded with FPL to take the transmission assets out of the deal for the Shores’ customers, but what came to him in writing last week had some problems.
“We had been talking with FPL for some time about them purchasing some transmission assets down at the Fort Pierce line, an inter-connect between Vero and Fort Pierce and the Emerson substation down there, but that’s a totally different topic,” O’Connor said. “I asked them to please keep this offer simple and not put those transmission assets in there.”
He was also unclear how Vero could ensure that it would have transmission rights from the south along the 138 kilovolt line to bring power into the city should there be a snafu with transmission lines headed to Vero from the west.
The last thing Vero would want to do is to commit to a long-term, annual transmission or “wheeling” fee to be paid to FPL for use of transmission lines that the city for decades has owned.
FPL’s offer letter states that its takeover of the transmission assets would relieve Vero of compliance obligations with state and federal energy regulatory agencies, saving the city an unknown sum annually.
But O’Connor said some research he’s done showed that not to be so cut-and-dried. “It wouldn’t completely take away the compliance that we need to do; it would just reduce the number of forms we have to fill out,” O’Connor said.
In addition to ditching the transmission assets from the deal, FPL added a deadline of Aug. 25 after which the $30 million offer would expire. This tight turnaround time would force Kramer to vote prior to the Aug. 30 Republican primary.
Kramer is challenging incumbent Bob Solari for a seat on the Indian River Board of County Commissioners, and should Kramer be defeated, he is expected to file to run for re-election to Vero’s Council.
Based upon statements expressing concern the city ratepayers be “made whole” and protected from all possible contingent liabilities and rate fluctuations, Councilman Dick Winger and Vice Mayor Randy Old are expected to vote against accepting FPL’s $30 million offer, should the matter actually come up for a vote on Tuesday.
Councilman Harry Howle and Councilwoman Pilar Turner have long supported sale of the Shores customers to FPL, but without Kramer’s support, they presumably lack a third vote to approve the deal.
In response to objections that city officials planned to call for an impact study on the deal, Turner said Monday, based upon what little she knew about FPL’s written summary of its offer, no study or consultant analysis is needed.