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FMEA protects its cash cows

STORY BY LISA ZAHNER, (Week of September 29, 2011)

Advocates of municipal utilities say that government-owned electric systems are inherently good. If this is true, why do they have to lobby so hard?

About a year ago, we asked Florida Municipal Electric Association Executive Director Barry Moline to give us the budget for his organization. He flatly denied our request, citing the fact that trade associations are not covered by Florida's broad public records law, despite the fact that most of the FMEA's activities are paid for with dollars from city and county coffers.

State Rep. Debbie Mayfield was also curious about where the FMEA gets its money and how it spends it, as she's been the target of their efforts to plunge her into a political black hole because of her attempts to bring the Vero Beach electric utility under some state regulation.

The FMEA proudly takes credit for killing the Mayfield Bill, but Moline reluctantly released the FMEA 2010-2011 budget to Mayfield.

The FMEA has come out blasting the sale of Vero Beach electric to Florida Power and Light. We now know that the FMEA had already paid for push-polling on the November referendum – an insidious campaign technique designed to alter the view of respondents under the guise of conducting a poll.

FMEA staff also traveled to Vero Beach twice to tape and produce a YouTube video arguing against the sale and against the referendum. Moline has drafted numerous white papers pressing his position and he's written guest columns for the local daily.

He's appeared at Vero Beach City Council meetings urging elected officials to oppose the city's stated policy of seeking to sell the electric utility. He also worked behind the scenes to intimidate City Council members, ensuring that they, as a body, did not publicly support the Mayfield Bill.

Why is the FMEA so protective of the Vero Beach electric utility and its ratepayers? Well, it's not.  The FMEA is only protective of its own "public power" hide.

The Vero sale to FPL in search of the lowest rates in Florida could cause other municipal utilities to want to jump ship – though Moline denies this is the case. And the legislation Mayfield proposed would have set a precedent for all municipal-owned utilities, requiring them to justify rate increases to the Florida Public Service Commission – just like FPL has to justify its rates.

That is what the FMEA fears the most, as municipal utilities can now raise rates  – as we have seen here in Vero – whenever costs go up, or whenever the city needs need extra cash to pad its general fund.

As we've seen twice already this year in Vero Beach, unelected city staff make the decision about when rates should go up, and by how much. The Vero Beach City Council doesn't even get a vote.

No matter whether the rate increase was a result of inefficient plant operations, poor management of the utility or of bad policy decisions by the governing body, the costs simply get shoved down the throats of the ratepayers.

And with regard to Vero Beach electric, remember that 61 percent of those 33,000 customers don't even live in the City of Vero Beach. They can't just disconnect the service and sit in the dark. They're stuck paying whatever the utility demands.

Who wouldn't want to keep doing business in this unfettered way, if you were a municipal utility?

Local governments aren't adept at doing much on their own, so they band together via organizations like the FMEA. A total of 34 members pay the FMEA to maintain their unchecked monopoly power and to protect their cash-cow utilities. Vero pays $35,000 per year for this service.

Moline said he's not concerned about losing Vero Beach's $35,000 if Vero backs out of its FMEA membership.  That's because he's got a hefty $1.3 million budget, devoted largely to lobbying efforts. A full $945,000 of that comes right out of the electric bills of the 2.8 million customers who buy electric from municipal systems.

According to Moline, the organization's $689,000 budget for "staff" and the $214,000 budget for "legislative" go to support the FMEA's seven paid lobbyists.

On top of that, the FMEA has its own Political Action Committee, through which it donates to individual candidates' campaigns. Not surprisingly, a few of the names on the recipient list are the same Florida House members who effectively kept the Mayfield Bill from ever seeing the light of day.

Rep. Dorothy Hukill of Port Orange receives the maximum $500 per cycle from the FMEA's PAC, plus $250 to her failed 2010 Congressional campaign. Hukill chairs the Military and Local Affairs Committee, where Mayfield introduced her bill that would have helped Vero electric customers.

Hukill refused to bring the bill up for discussion.

Mayfield failed to get then House Speaker Larry Cretul of Ocala to take her bill directly to the House floor. Cretul was also on the FMEA's contribution list.

When it appeared that Mayfield might be gaining support among House members to push the bill forward, the FMEA activated its Legislative Committee statewide, sending out e-mail blasts to rally the troops to fight the Mayfield Bill. These e-mails, which were copied to City of Vero Beach legal staff, are public record.

While all this was going on, Mayfield was getting chastised by her own party's leadership for publicly airing the backroom deals being struck by the FMEA and her fellow House Republicans.

Coincidentally, state Rep. Dean Cannon, then House speaker in waiting, also receives a regular stream of $500 gifts from FMEA lobbyists. Cannon hails from Winter Park, which is one of the FMEA's greatest triumphs. Winter Park actually bought back its system from Progress Energy and opened its own electric utility in 2005. Winter Park now has rates about 13 percent higher than FPL.

Interestingly, the late Rep. Stan Mayfield received one $500 contribution from FMEA in 2004, but FMEA cut off the flow of cash once Mayfield started pushing for Vero Electric to be governed by an independent utility authority with proportional representation -- meaning that 61 percent of the customers could vote to sell the utility.

Rep. Debbie Mayfield has never been on the FMEA's donation list, since she's been a troublemaker from the day she was elected. So the FMEA uses its PAC money as both a stick and a carrot.

The Municipal Electric PAC doles out tens of thousands of dollars in campaign contributions per election cycle. Moline says the FMEA uses the cash "to get us in the door." Once in that door, the FMEA's seven paid lobbyists then put pressure on elected officials to support and the right of cities and counties to own and operate their own electric utilities -- even if it's not in the interest of the ratepayers back home.

Who donates to the Municipal Electric PAC? Well, the FMEA, of course, and some higher ups at the FMEA's sister group, the Florida Municipal Power Agency. Then there's attorney-lobbyist Bill Peebles, who pulls down six figures from the FMEA each year.

Next is a list of executives and employees of municipal utilities like the Fort Pierce Utility Authority, the Orlando Utilities Commission, Keys Energy Services, the City of Clewiston, the City of Lakeland, the City of Leesburg, the Kissimmee Utility Authority and the Jacksonville Electric Authority.

Last but not least, checks come in from the consultants -- engineers and attorneys -- who make their bread and butter off of advising governments small and large on how to run their utilities. In short -- all the people who depend upon "public power" for a very good living.

Moline swats away these allegations by saying that what the FMEA's spends is "peanuts" compared to the FPL lobbying machine.

But somehow, FPL spends money on lobbying while still offering its customers the lowest rates in the State of Florida, not to mention its rebates on energy-saving appliances, free energy audits and innovative programs designed to save electricity and money.

At the end of the day, all the FMEA is lobbying for is a business plan that can no longer offer consumers competitive utility rates.