While the Vero Beach City Council was still under a self-imposed gag order at press time regarding Florida Power & Light’s latest $185 million offer to purchase the entire Vero electric system, key players in the electric saga weighed in, all saying the city should go for it.
The deal on the table would pay off Vero’s $20 million in outstanding electric utility bonds, relieve the city of $6.6 million in pension liability, provide job opportunities for electric utility workers, and pay exit penalties of $20 million to the Orlando Utilities Commission and $108 million to the Florida Municipal Power Agency co-op to extricate Vero from bad deals entered into by past City Councils.
At the end of the day, the proceeds would leave the city with approximately $20 million in unrestricted cash, plus $10 million in lease payments from FPL for use of the land under the substation in front of the old power plant. That money could be used to pave roads or construct stormwater projects to benefit the lagoon – or it could be invested to offset the loss of millions in electric transfers into the general fund.
The only wrinkle to be worked out is the timing. FPL is anxious to close this deal on Jan 1, while the FMPA says it calculated the city’s $108 million in exit costs based upon a closing date of Oct. 1, 2018. Exiting the co-op early, Florida Municipal Power Agency officials say, would cost Vero an extra $12 million to compensate its sister cities for eight more months of absorbing Vero’s share of the FMPA’s above-market wholesale power rates.
Politically, the delayed October closing would preserve the FMPA one more legislative session against any efforts by Tallahassee officials to regulate its operations or rates. Meanwhile, Vero’s customers would pay more than that $12 million in excess electric rates in those eight months.
Both FPL and FMPA were set to present all this information to council members this past Tuesday and to take what is sure to be a cornucopia of questions from skeptics and those diehards who insist Vero is better off owning its own electric utility.
Former Vero Mayor Pilar Turner, who worked tirelessly for six years to get Vero out of the electric business, was in Pamplona running with the bulls and, she said, “enjoying my vacation from politics” when the FPL offer came in. But she responded by email to express her excitement.
“This may be the last chance for Vero to escape the shackles of the FMPA and past councils’ mistakes. FPL is the lowest cost, most efficient electrical provider in the state!” Turner said. “Electrical generation remains an ‘economy of scale’ business. It is impossible for Vero to compete with FPL. FPL will always have more resources to manage the risks.”
Turner called the $185 million on the table “a fair deal for our ratepayers and the City. We cannot afford to let this opportunity slip away. Can’t believe this is still an issue and has not been resolved,” she said.
Indian River Shores Mayor Brian Barefoot said, “This is a clean deal that provides tremendous benefits to all.”
“Unlike previous offers, there is no ‘surcharge’ through which City utility customers would offset the cost. Once the sale is complete, all customers will receive FPL service at the utility’s low rates. And unlike today, all will have access to electricity powered increasingly by solar energy,” Barefoot said.
He praised Vero Mayor Laura Moss, who along with the Carlton Fields law firm, has spearheaded the recent round of talks with FPL and the FMPA.
“Laura Moss deserves our gratitude for pursuing this opportunity even as she pushed for council approval of the partial sale. Former Mayor Dick Winger has also expressed long-standing vocal support for a full sale that would meet FMPA obligations and keep all customers whole. FPL’s offer meets all of the requirements he has set forth.”
Vice Mayor Harry Howle and Councilman Lange Sykes were elected on staunchly pro-sale platforms. Councilman Tony Young seems the most skeptical of the bunch, but his chief concerns are that Vero taxpayers are made financially whole and the deal is extensively vetted.
Barefoot and his constituents in the Shores have a major stake in the deal going through, as the Shores not only dropped ongoing litigation in hopes of a sale, but a still-valid $30 million offer by FPL to purchase just the Shores portion of the system has been shelved while renewed negotiations toward a full sale proceed.
“I have said from the beginning that the best option for everyone is a full sale of the electric system, but if necessary we will protect the rights of our Town’s citizens and seek rate relief through a partial sale to FPL,” Barefoot said.
Even former Vice Mayor Randy Old, whose tenure proved him to be ineffective in pushing the sale, and who was sometimes seen as passively obstructing it, endorsed what FPL is proposing.
“This should be accepted by the City Council,” said Old, who was unseated by Sykes in November but hopes to get back on the council this fall. “The agreements are long and detailed, and there may be some issues that need to be altered or negotiated, but most seem straight forward and reasonable.”
Old also noted the deal could still fall through. “FMPA’s board must unanimously approve the transaction. One City voting against the sale could stop it.” But he said he is optimistic.
“I believe that FMPA will approve the transaction and the full sale will be achieved. However, the other key point is that if the full sale does not go through then, there is a commitment to sell the Indian River Shores portion of Vero Electric to Florida Power & Light,” he said.
In conclusion, Old said something all sides of the issue can likely agree upon, “It will be a huge relief to the community to have this issue not dominate and divide the city, as it has for the past several years.”
Local physician Val Zudans has also declared his candidacy for the Vero council in November, coming out with a strong pro-sale position (see his op-ed column on page 40). Long-time utility activist Glenn Heran is serving as his campaign treasurer and chief advisor on the electric issue.
