Keep fingers crossed on Vero Electric sale for three more weeks

Just one final, nerve-wracking, three-week period hopefully remains for stakeholders in the Vero Electric sale.

The Florida Public Service Commission is expected to issue a formal ruling this week approving the sale of Vero Electric to Florida Power & Light, following up on a nail-biter 3-2 favorable vote last week, but a 21-day review period follows the ruling.

If there are formal objections during that period, it is possible the deal could still be delayed or derailed. If there’s no challenge by the end of the review timeframe, the ruling will be final, and the parties can proceed toward a closing.

The 3-2 vote came after nearly two hours of testimony about the carefully crafted $185 million deal that was the result of a decade of effort. The PSC said the transaction involved “extraordinary circumstances” that permitted them to approve the deal, even though FPL plans to pay $116.2 million more than what the PSC staff said the Vero utility was worth.

PSC staff had proposed that Vero customers would need to pay a rider or surcharge to make FPL’s existing 4.9 million ratepayers whole. But FPL, experts and local officials convinced three members of the PSC that there would be no negative impact on those customers from the sale, and that in fact FPL’s customer base would reap substantial financial benefits through the addition of the Vero system.

Testifying at the hearing were Vero Mayor Harry Howle, Indian River Shores former mayor Brian Barefoot, Shores Councilman Bob Auwaerter, County Commission Chair Peter O’Bryan and Commissioner Tim Zorc, plus Florida State Sen. Debbie Mayfield and Rep. Erin Grall. CPA and utility activist Glenn Heran spoke on behalf of the 61 percent of outside-the-city customers who pay Vero rates without representation.

The only person or agency Vero ratepayers can be sure won’t object to the ruling is Florida Public Counsel James Ray “J.R.” Kelly. Even though the expert he hired to analyze the deal found FPL is paying too much, Kelly said he would not formally challenge the acquisition.

Leading up to the vote, Kelly’s office put FPL through its paces, with burdensome interrogatories and information requests, and hired “nationally renowned expert” consultant Lane Kollen of J. Kennedy and Associates out of Roswell, Ga., to analyze the financial terms of the deal and testify before the PSC.

Kollen told the PSC last Tuesday in Tallahassee that he had “carefully reviewed the FPL economic analysis … [and found] numerous significant flaws in it.

“These flaws overstate the savings claimed by FPL and make its analysis unreliable,” Kollen told commissioners, detailing what he saw as 10 major problems with the calculations.

Kollen’s conclusion echoed the PSC staff’s – that Vero ratepayers should shoulder tens of millions of dollars in surcharges to make FPL customers whole, a caveat that likely would have killed the deal.

Kelly said that bringing inconsistencies in the deal to light was his office’s job as counsel for the people of Florida, but that, “Having done that, we’ve discharged our duty. We will not ask for a hearing when the order comes out. We’re satisfied that the Commission, the staff, and the parties have taken into consideration what we recommended or what we observed, and we’re satisfied with the results today.”

Those who watch the PSC regularly said Kelly’s decision not to challenge was based on politics, suggesting he did not want to burn bridges with the legislature or offend Florida State Representative Erin Grall.

Grall, who represents Vero and serves on the committee that approves the Office of Public Counsel’s operating budget, took Kelly’s office to task in her testimony prior to the vote.

“Common sense suggests FPL’s infrastructure will not experience significant expense with the addition of less than 1 percent of its existing customers,” Grall said. “Florida Statute 350.0611 states, ‘It shall be the duty of Public Counsel to provide legal representation for the people of this state in these proceedings.’ And I believe they have not represented the City of Vero Beach customers in the testimony that was presented here today.”

State Senator Debbie Mayfield also spoke forcefully in favor of the deal, which affects her constituents.

FPL and Vero are hoping to close the sale on or before Oct. 1.

Comments are closed.