Price tag on Vero’s electric operation upped to $400 million
In the midst of negotiating with Florida Power & Light about a potential sale of the city’s electric utility, the city has conducted an informal survey that puts the operation’s value at a whopping $350 to $400 million, Vero Beach 32963 has learned.
“This asset is worth almost $400 million,” said Councilman Tom White in an interview with Vero Beach 32963 (see adjacent story). “The City Manager was told this when we had an appraisal done of the system.”
A public records request for such an appraisal was summarily denied by the city.
“I have no knowledge of any appraisal, or study, or inventory, either official or unofficial, that has been done to determine worth or value of the electric system,” replied John Lee, the head of the utility.
Yet the details of such a massive tabulation seemed well-known to White, though the undertaking was never brought up in public or voted on by the City Council.
“We are talking all our transmission distribution, all our substations, all the telephone poles, all the concrete poles, all wiring between $350 million and $400 million,” White told Vero Beach 32963.
White said the appraisal was done in the last six months, and that it changes the expectations of what might constitute a “decent offer” from FPL.
The only previous estimate was $200 million to $300 million, offered in public by City Manager Jim Gabbard in an August 2008 appearance before the Board of County Commissioners.
Gabbard said those were numbers compiled by former Electric Utility Director R.B. Sloan, based upon his decades of experience in the industry.
Gabbard reported that Sloan had told him the under-grounding of lines on the barrier island alone was worth $100 million.
It is not clear whether the “new” appraisal value is the replacement value of the system, the depreciated value of the physical assets or the “fair market value,” which city officials and electric consultants have said is a figure that can only be determined by actually cutting a deal to sell the system or paying consultant Sue Hersey another $300,000 to devise a valuation.
Though the public wasn’t informed or consulted about this appraisal, those high-ball figures have been peppered out in public discussions, usually followed by a warning that the city can’t let the system go for less than it’s worth, that Vero can’t let itself get “taken” by FPL.
For months city staff and local gadflies have buzzed about an appraisal underway.
Each time Vero Beach 32963 has made a request for any documents related to any valuation of the utility, it has been told none exists.
It’s evident to anyone listening to the rhetoric of the campaign or attending a City Council meeting that there’s a large status quo faction that feels the electric utility should not be sold at any price.
FPL readily admits that it’s not convinced it should buy, either.
“We’re continuing to conduct a detailed financial analysis of the electric system,” said FPL Spokesperson Jackie Anderson of the Juno Beach office.
Anderson said FPL has received all the documents and data it requested from the city back in the spring.
“Eventually, our analysis would get down to the quality of the poles and the lines and the generation facilities,” Anderson said.