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New electric consultant fee outrage awaits new Council


Last December, Vero Beach 32963 uncovered invoices showing that the City of Vero Beach spent more than $3 million on consulting and legal fees in its efforts to negotiate a better electric contract.

A large percentage of that money went to consultant Sue Hersey, who lists herself as president of Energy Advantage Consulting LLC and works from her home just outside Boston, and to a Boston law firm that Hersey recommended to the city.

Hersey’s contract was projected to end in June 2009.

But Hersey’s services were sought by Vero in November when an election coup brought Florida Power & Light to a City Council meeting,  and again later in the year, when the State Attorney’s Office needed to interview her about allegations of bid rigging.

With Vero moving forward under the Orlando Utilities Commission contract as of January, however, Hersey’s costly employment by the city was presumed finally finished.

Not so, according to public records obtained last week.

Since Dec. 10, 2009, the City of Vero Beach has paid Hersey and her Boston legal associates more than $120,000 for “Management of Transmission Contracting and Transition to New Power Supplier.” About $67,000 of that was for services rendered after the Jan. 1 turnover date.

There are still two months of billing that haven’t been received yet for September and October, including a trip to Orlando to meet with OUC officials on Oct. 28 about what appeared to Hersey to be a contract dispute.

Eleven months after changing power providers, Vero seems to still be “in transition.”

In fact, Hersey is serving in a liaison capacity between Vero and its new power provider, OUC.

Meanwhile, her fees have amounted to nearly the entire annual salary of an Electric Utilities Director.

Over a three-month period, Hersey was included in nearly two hundred daily updates and forecasts that were sent by OUC to the Vero Power Plant called “Vero’s Network Forecast,” “Vero’s Day Ahead” or “Vero’s Network Plan.” 

She charged the city at a rate of $290 per hour for reviewing those emails and for looking at various memos and bills and bulletins forwarded to her.

In addition, she exchanged 27 emails with Vero’s Director of Power Resources, Jim Stevens, about meetings, reports and travel arrangements.

Hersey flew from Boston to Orlando four times this year for city business, including meetings at OUC on Aug. 10 and Oct. 28. Stevens picked her up at the airport.

Despite the fact that the OUC made special arrangements to accommodate people who wanted to attend the Aug. 10 meeting but were under budget constraints, three city employees plus Hersey went to met with OUC in person.

“Jim – I’ve made a conference call-in number available for our meeting on Aug. 10th to give Vero an opportunity to eliminate travel time and minimize some consultant fees,” OUC’s Deborah Eichen wrote to Power Resources Manager Jim Stevens on August 3.

“Let me know if anyone wants to take advantage of the call-in option,” he said.

Hersey sent emails directly to OUC executives on behalf of the City of Vero Beach in efforts to straighten out what she saw as the city not getting its due in sales revenues from power produced at our big blue plant.

Turns out that OUC was in the right, and after several months of badgering the OUC -- on the Vero taxpayers’ dime -- Hersey wrote an apologetic note admitting she had misunderstood the terms of the $2 billion contract she helped negotiate.

“Thank you again for helping Vero Beach sort through the complexities of the Florida Municipal Power Pool economics.

“The billing procedures are functioning in accordance with the OUC/Vero PPA contract,” Hersey wrote to OUC executives on Oct. 29 after OUC held a special training session requested by Hersey about power sales procedures.

Former Electric Utility Director R.B. Sloan and Hersey had touted the fact that Vero would be making profits every time it fired up units at the power plant.

OUC, Vero Council members were told, would broker the wattage for us when our power was needed to meet other communities’ loads.

It turns out Vero only gets those higher rates for its electricity when OUC itself is purchasing the power, not other members of the Florida Municipal Power Pool.

On top of these dealings with OUC, this spring and summer, Hersey was also used to research and compile some of the data requested by FPL to further its research into buying Vero’s electric utility.

None of these charges have had to go to the City Council for approval, since no individual check was more than $50,000.

City Manager Jim Gabbard charged the expenditures to Hersey’s old contract  approved by a City Council some years ago.

Hersey has run way beyond the original scope of services and tens of thousands of dollars over the estimated maximum of that contract, records show.