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Power plays: New cast, same old story
FP&L briefs Council; public kept in dark

(Week of December 9, 2010)

Four of the Vero Beach City Council members met with Florida Power and Light in private last week.  Only Councilman Craig Fletcher declined, insisting that the process of selling the electric utility be brought out into public view.

Fletcher reminded his colleagues that they campaigned on open and transparent government as much as they did on getting Vero out of the electric business.

The upshot of last week’s meeting was more study, more discussion, possibly some kind of offer in 60 days, but it could be well over a year before anything happens.

Goals are still the same, but they are still just goals: The city wants to get low FP&L rates, it wants a fair price for the utility that would pay off the bonds, and pay off any penalty to the Orlando Utilities Commission, and get a little bit more to put away for a rainy day.

That’s the part for public consumption anyway. 

Whether the four City Council members received new information, or may now approach this decision differently, won’t be known from the private meetings.

Individual meetings with all or most of the City Council members about an issue they will be voting on violates, at least in spirit, the State of Florida’s statutory regulations about conducting the peoples’ business in the Sunshine.

The previous City Council and City Manager routinely hid things from public view through one-on-one meetings and having documents  kept in the hands of outside consultants.  Those efforts were widely criticized and provoked not only ire, but revolt.

The City hid, for example, the fact that FP&L was the runner-up when Vero sought an alternative to the oppressive Florida Municipal Power Agency as its provider of electricity.

The City hid the fact that Vero was merely a hair away from choosing FP&L above the Orlando Utilities Commission.

They hid the fact that the bidders were ranked by four people -- two consultants from Boston who most certainly do not pay Vero Beach electric bills or property taxes, former Electric Utilities Director R.B. Sloan and City Attorney Charles Vitunac.

The City hid the fact, not only from the public but from then-Mayor Tom White, that more than 100 changes were made to the OUC contract between the date when the City Council saw -- not read, but briefly saw -- the 68-page document, and when it voted to approve it a week later.

The City hid all these documents for two full years after the bidding process and released them three months before OUC was to take over -- much too late for the public to investigate, let alone take action, about any concerns or questions they might have.       

So now we have a new City Council committed to openness, but also committed to a sale. Four of them agreed to meet with FPL behind closed doors.

Councilwoman Tracy Carroll surprised FP&L by bringing reinforcements -- she invited utility activist and CPA Glenn Heran into her meeting, thinking she might get better, more detailed information if Heran could ask some questions.

Mayor Jay Kramer took two reporters into his meeting with him.

Mayor Kramer, it turns out, didn’t get the same presentation as the other three council members.

The others were handed a four-page document detailing the status of FP&L’s research and analysis and how things might progress. Well, that’s what we’ve been told the document said.

Unfortunately, it’s not a part of the public record.

When asked for the handouts as part of a public records request, City Clerk Tammy Vock wrote:

“I spoke with the Mayor and most of the Council, John Lee and Monte Falls and was told by them that FP&L did not leave any handouts.  They showed them some things, but took them back,” Vock wrote on Dec. 3 in an email.

FP&L staffers reclaimed the document and took it out of City Hall. Mayor Kramer didn’t get the chance to see the document.

“They didn’t show us anything, I didn’t get the handout, wasn’t aware of it. But I did have quite a frank discussion with them,” Kramer said.

Kramer downplayed the matter about the handouts.

“I don’t think it’s that big of a deal. I don’t think anything funny is going on. How we get there doesn’t matter,” Kramer said.

“As far as I’m concerned, they’re still responsible to do their due diligence and, what they come up with, it will be debated. And it will probably be done in public. I’m sure it will. I don’t see where there’s any room to make a backroom deal on this one.”

“Keep in mind that everyone started asking questions about pricing or timeline and it seems like if they say anything about those things and it ends up in the paper, it’s like it’s set in stone.

“Maybe they don’t want to set up those expectations,” Kramer said.

Kramer said he intends to instill some competitive elements into the debate about the sale and that, by the time a decision is finally reached, the public will have had its fill of information.

“I think this whole thing will get worked over pretty well,” he added.

Tallahassee lobbyists, pols get into act

(Week of December 9, 2010)

The Vero Beach-Florida Power & Light electric saga is not only a curiosity for locals. Vero has again captured the attention of Tallahassee lobbyists and politicians.

If Vero can successfully sell to FP&L and get the lowest rates in the state, the move could spark a domino effect. Customers bordering FP&L and paying 30 to 50 percent more for electric could try to defect to FP&L as well.  But if the attempted sale ends only in huge legal bills and deflated expectations, other cities aren’t likely to try.

Two side plots of this cliff-hanger are the Mayfield Bill and the Florida Municipal Electric Association’s pitch to create a Vero Beach Utility Authority.

Rep. Debbie Mayfield is trying again this year to bring Vero Beach electric under the Florida Public Service Commission to help give representation to the 61 percent of customers who live outside the Vero Beach city limits.

High-paid lobbyists and now-retired Rep. Ralph Poppell buried the Mayfield Bill last spring, but local legislators voted 4-0 last Friday to support Mayfield’s second try as a back-up plan in case a deal to sell to FP&L cannot be struck.      

“I am encouraged that the new City Council is on board with the goal of selling the utility to Florida Power & Light,” Mayfield said. “In the meantime, I would like to go forward with this bill and let people know we realize this is still an issue.”

Before Thanksgiving, Mayfield met with Vero Beach City Council members to advocate the bill as a consumer protection measure, not an added layer of government.  She acknowledged that that history of Vero electric shunning oversight goes “way back” to her husband’s time in office, but that she’s hopeful.

“So far, the meetings have been productive and I am encouraged that all parties appear committed to working together to achieve the best outcome for the ratepayers, both inside and outside of city limits,” Mayfield said. 

The FMEA led the resistance to the Mayfield Bill last session. A powerful trade organization representing 34 municipal-owned electric utilities, called “munis,” the FMEA this time around has proposed an alternative to the Mayfield Bill after failing to persuade Mayfield last month to drop the PSC issue.

Unbeknownst to Vero Beach Mayor Jay Kramer and Interim City Manager Monte Falls, a draft of a Vero Beach Charter Amendment establishing a Utility Authority was sent to Rep. Mayfield’s office and it’s now being circulated and discussed.

“I don’t plan to really spend any time on this because I don’t think it’s going anywhere,” Mayor Kramer said. “I think the FMEA has their agenda for municipal-owned utilities and it’s pretty obvious that’s where this is coming from.”

The FMEA contends that the proposed Utility Authority is unrelated to the sale to FP&L.

“The FMEA would be fine with the city selling off its assets and customers outside the city limits and keeping the electric utility intact for the city,” Kramer said after speaking with FMEA Executive Director Barry Moline. “That if that was the case, they would back off and be just fine with that.”

Moline said he stands by local control and governance of utilities.

“We believe that government closest to the people is the best form of governance. We believe that a regulatory agency outside the local area is unnecessary,” he said.

To that end, the new Vero Beach City Council has questioned whether or not the FMEA is necessary. It recently directed staff to figure out what, if any benefit it receives for the $35,000 in annual FMEA dues. In the meantime, Vero is not renewing its membership.

Three million Florida ratepayers pay the dues sent by Vero and 33 other munis in Florida to bankroll lobbying efforts. Moline verified that the annual dues are on a sliding scale according to the utility’s size, but he wouldn’t say how much is collected in dues.

“At the request of our members, that information is kept confidential,” Moline said.

Consultants and vendors who do business with Florida’s munis also support FMEA as associate members. The budget of the FMEA is not public record, despite its use of public funds. Its activities are not regulated by any state agency, except its five full-time lobbyists and one attorney must register as lobbyists.

Moline admits trying to talk Mayfield out of pushing the PSC on Vero. Moline said PSC regulation would cost ratepayers money and increase reporting requirements, not to mention set a precedent that might affect his other members. He said all these issues boil down to keeping municipalities’ options open for paying for government functions.

“For communities with electric utilities, they choose to help fund them through the utility,” Moline said. “If they are putting the utility on the table as an asset for sale for this reason, it could be an appropriate thing.”

Moline denies the Utility Authority plan was designed to divert attention away from the proposed sale to FP&L, but utility activist and CPA Glenn Heran disagrees.

“They stand to lose power and to lose members, but whatever tricks or games the FMEA would like to play, I’m confident that the sale to FP&L will go through,” Heran said. “I don’t think this Utility Authority idea as conceived by Barry Moline will go anywhere. The city voters have already decided what they want to do.”

The Utility Authority, as written in the model document, would prohibit the sale of any of the city’s utility assets without a referendum.

“I didn’t know that section was in there. I have to apologize,” Moline said.

“When Rep. Mayfield and I spoke and I said that I had something that would be better than the PSC regulation, which would keep the governance local and I gave her that document, it had been on my computer for 10 years and I didn’t read it through all the way.”

Mayfield confirmed that the document was for discussion purposes only.

Regarding the sale to FP&L, Moline, though he hedges slightly now, took sides a long time ago. 

“Asking FPL to conduct a study would be like the fox doing a security assessment of the hen house,” he wrote in a Jan. 29 op-ed in the Press Journal. “Of course, FPL would paint a rosy picture of how wonderful life would be under its electric wing. FPL is a private, for-profit corporation, probably salivating over the chance to gobble up more profits from the Vero Beach community.”

Now that the sale is the policy of the city, Moline, still wants to have a say in the result.

“If a sale is the way Vero wants to go and FP&L actually comes in and makes an offer, I would come in and help the city, to make sure they’re getting a good deal,” Moline said. “But as it is now, all you’re getting from FP&L is that they’re studying. They haven’t made an offer.”

“I don’t expect FP&L to make a fair offer to the City of Vero Beach,” Moline said. “I expect them to try to steal the utility.”

Heran said he doesn’t appreciate the FMEA’s latest foray into Vero politics.

“Clearly the FMEA is not interested in the good of the people, because none of their members’ rates are competitive with FP&L,” Heran said. “Barry Moline just wants to slow the process down because he’s so terrified of this sale to FP&L that other munis will pursue the same path to FP&L and the lowest rates in Florida.”

Moline said Vero is not facing an extreme situation that would warrant a sale. “What I’m talking about is the kind of situation where things can’t be changed, even if you replace the management,” Moline said.

Moline was unaware that in June, Acting Electric Utility Director John Lee said, “This is as low as we can legitimately go without making major changes in our operations.  We are where we will be going forward.”

In response to that, Moline cited reliability and rates.

“The City of Vero Beach reliability is significantly more reliable than FP&L,” Moline said. “It’s a qualitative thing, most people value this as much as they do rates.”

But what about the rates? Vero is still nearly 30 percent higher than FPL.

Rates are a moving target. In the next few years, a lot could happen with rates,” Moline said. “FP&L has a rate freeze now, but they are trying to raise their rates and in 2012 they are going to go up. They could raise their rates to the point where Vero would be about the same as FP&L.”