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Shores looking at how to get low FPL rates for entire town

STORY BY LISA ZAHNER (Week of November 28, 2013)

While Vero Beach officials ponder whether the sale of Vero electric is a done deal or dead, the Indian River Shores Town Council is looking at how all its residents might get Florida Power and Light rates regardless of the outcome.

“The vibes coming out of Vero Beach are sufficiently troublesome; it doesn’t look like things are going anywhere,” said Councilman Dick Haverland, referring to the defeat of pro-sale incumbent Vice-Mayor Tracy Carroll, the elevation of anti-sale councilman Jay Kramer to vice-mayor and Kramer’s recent statements to Vero Beach 32963 that the sale is dead, at least until 2016.

Haverland proposed that as a back-up plan, the Shores petition the Florida Public Service Commission to allow FPL to service all the town – not just the 10 percent who are currently on FPL. And council members agreed to quickly examine the town’s options and hire whatever professional help needed – legal, political or both – to represent the Shores’ interests.

“I’ve been watching this slow dance for a long time. Now, I’m hearing that this thing could drag on to 2016 or might not even happen at all,” said Haverland.

“My guess would be that the excess we pay is about $2 million per year,” Haverland said of the more than 40 percent rate disparity between Vero electric and FPL. That excess for all of Vero’s 34,000 customers has been estimated at $26 million per year.

“It’s clear that we’re not going to sit here and do nothing,” said Mayor Brian Barefoot. “We’re not taking a vote here, but I think you can get the sense that we’re willing to make an investment in a solution.”

Money from Shores and county customers’ electric bills is used to pad Vero’s general fund to the tune of more than $7 million annually. By comparison, Vero city taxpayers only pay $4.1 million in property taxes.

“I think it’s a classic case of taxation without representation,” Haverland said, echoing the argument of utility activist Dr. Stephen Faherty, who along with CPA Glenn Heran launched a crusade nearly six years ago to get Vero out of the electric business.

About 90 percent of Shores residents are locked into a service territory granted by the state for Vero to serve not only its own city limits, but certain areas in the county and in the town. If the sale to FPL doesn’t pan out, Shores officials want the town carved out of Vero’s territory by the Public Service Commission so the Shores can broker its own deal with FPL.

Faherty and Heran have already petitioned the PSC to re-draw the city’s territory, and their petition was accepted for consideration by the agency. But they put it on hold because Vero “lawyered up” and sued them. Heran and Faherty estimate it would cost them upwards of $150,000 in legal fees to fight the city’s Tallahassee attorney, Robert Scheffel Wright.

“The reason we’ve got it in abeyance is because every time we take it out, we get sued,” Heran said.

One option for the Shores is to join Faherty and Heran’s petition, a move council members supported Friday in concept, if it’s determined to be a viable legal option.

“How do we join?” asked Vice-Mayor Jerry Weick, a long-time advocate of the sale to FPL. “We’re giving you permission to do it,” Heran said, on behalf of himself and Faherty, who was not in attendance.

“If you’re going to appear before the Commission, you need someone that appears before the PSC,” said Town Attorney Chester Clem, noting that utility regulatory law is a specialized field.

Heran said he will ask the Board of County Commissioners to do the same, in the interest of Vero electric customers who reside in unincorporated areas. With the resources and added clout of the county and the Shores, the outside customers could effectively pursue the petition, Heran said.

The deadline for such a move would be late January, Heran said, as the complaints have now been in abeyance since January 2010 and will expire if not activated.

Heran laid out the political situation at Vero in the wake of the re-election of Dick Winger, his appointment as mayor, the election to the Vero City Council of Amelia Graves. “That same group of Winger and Graves appointed Jay Kramer to be vice-mayor,” Heran said. “That man has voted every time against the sale and they appointed him vice-mayor.”

While the deal is stalled in the hands of the Florida Municipal Power Agency, the co-op that must release Vero from long-term debt and power-purchase obligations, Kramer said he wants to re-tool the electric utility, renegotiate a wholesale power contract and potentially shut down Big Blue.

Heran said he thinks the Vero Beach City Council no longer possesses the will to get the sale over the finish line. “I agree that this thing could well go years because you’ve got one against and two passive. So what do we do to protect our rights?” Heran asked rhetorically.

The northernmost portion of the Shores, which was annexed into the town after Vero’s territory was drawn up, already gets FPL power. Former Mayor Tom Cadden, who lives in FPL territory, has supported getting his neighbors lower FPL rates via a sale of the Vero utility since 2008. Cadden said he had requested to speak at the Dec. 5 Indian River County legislative delegation meeting to urge elected officials to support the sale legislatively.

“The message we’re giving the delegation is that we want the sale with FPL to go through as soon as we can,” said Cadden, adding that legislation may be needed “to help that through.”

Bill Grealis, a retired attorney and the Shores’ representative on the Vero Beach Utilities Commission, said the sale could be doomed without drastic developments. “I think the FMPA has effectively denied FPL’s proposal to consummate the unresolved issues,” Grealis said, referring to FPL President Eric Silagy’s Aug. 20 proposal to work things out with the FMPA.

“At some point, delay is denial,” Grealis said. “Lightning could strike and they (the FMPA) could approve it, but that would require amendments to the contract. I’m doubtful the council could get a 3-2 or a 4-1 vote in favor of those amendments.” Therefore, Grealis said it would make sense for the Shores to begin the arduous process of petitioning the PSC to be carved out of the Vero territory.

“What we need here is relief that is total and I think that the town has a case, whether it’s before the PSC or other legislative solutions. We’re paying into the Vero Beach general fund, so essentially we’re taxpayers of the City of Vero Beach.”

Weick said FPL would be happy to take on the Shores. “I have spoken to (FPL External Affairs Director) Amy Brunjes about separation,” Weick said. “If the deal with the city completely falls through, then she said ‘come to talk to us.’”

Haverland suggested that, as an alternative, the Shores might be able to cut a deal with Vero to get FPL rates if the town agrees not to wage a legal battle against the city. That tactic worked on the water-sewer deal brokered in 2012 giving the Shores lower county water, sewer and reuse water rates, while remaining customers of Vero.

As of October, Shores residents have benefitted from those rates, with city taxpayers paying water and sewer rates which can be up to 40 percent higher. Cutting a deal with the Shores on electric rates so city taxpayers would be subsidizing town electric customers – as well as town water-sewer customers – could pose a political nightmare for council members.

Grealis and Cadden were directed to review all contracts and petitions, work with Clem and come back with a recommendation at the Dec. 13 Shores Town Council meeting.