VERO BEACH — Florida Power and Light Thursday announced a proposal to split with city ratepayers the $52 million needed to pay the Florida Municipal Power Agency to let Vero Beach out of the statewide power co-op.
This latest plan now puts the fate of the sale of the Vero Beach electric utility to FPL squarely in the hands of city leaders – and presumably city voters.
FPL President Eric Silagy on Tuesday evening notified FMPA CEO Nick Guarriello that, contingent upon the city signing on, FPL would pay $52 million up front to cover the city’s half and facilitate a quick closing, thus amounting to a $26 million interest-free loan to the city. Vero ratepayers would pay FPL back the$26 million over time after the Jan. 1, 2015, closing.
“As soon as we close, they (Vero customers) would become FPL customers,” said FPL External Affairs Director Amy Brunjes.
City Manager Jim O’Connor was notified Wednesday, though Brunjes said O’Connor has been continuously kept in the loop that a decision was coming.
Brunjes said FPL has still received nothing in writing from the FMPA and that Silagy’s offer back to Guarriello was also not in writing, but by telephone. She said the FPL Board of Directors is amenable to the plan and that the FPL is “comfortable that we can get this through the (Florida) Public Service Commission.”
The amended deal would also need to go back before the Federal Regulatory Energy Commission (FERC), which had already approved the purchase and sale agreement as it currently stands.
City Attorney Wayne Coment said the voters would also get a say.
“As to referendum we already discussed with FPL folks and my understanding is they also believe a referendum would be necessary due to substantial changes to the existing purchase – sale agreement,” Coment said.
O’Connor said Thursday afternoon that he agrees with Coment’s assessment that a referendum would be needed.
FPL is working up options for the City Council based on two to four years of a surcharge or rider. Paying the $26 million over three years would clear up the obligation quicker, but result in a smaller discount for customers.
Paying the $26 million over four years would give Vero electric customers a bigger discount, but would delay the date certain that Vero would get FPL rates.
The disparity between FPL and Vero electric rates amounts to roughly $20 million per year. FPL rates, which are the lowest in Florida, are a full 24 percent lower than Vero.
Under the provisions of the sale and purchase agreement, Vero electric employees would be offered employment with FPL for two years from the closing date and could then stay on with FPL. FPL would also take over the pension liability for those employees.
O’Connor said he does not anticipate bringing anything forward to the Council during the Feb. 25 special call meeting.
Instead, Brunjes said FPL would be ready to make a formal presentation to the council about these developments at its March 4 regular meeting.
