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Vero moving ahead on electric rate study

STORY BY LISA ZAHNER (Week of December 11, 2014)

Next Monday morning in a closed session, two Vero electric staffers and one member of the Utilities Commission will interview the top four firms who want to help Vero Beach find ways to reduce its electric rates in a study that could cost hundreds of thousands of dollars.

Seven firms responded to the city’s request for qualifications, with the four top-ranked firms being Black and Veatch, Burns and McDonnell, GDS Associates and Power Services. Black and Veatch has done substantial design, engineering and consulting work previously for the city, so it’s not surprising that firm topped the evaluators’ lists.

Ideas for cost savings in the presentations ranged from decommissioning the Big Blue power plant – which the city cannot do until it works out a compromise with the Orlando Utilities Commission for replacement wholesale power – to installing smart-meter technology throughout Vero’s electric system. In its application packet, Black and Veatch included a lengthy section detailing the firm’s experience in implementing smart-meter technology for utility providers around the state.

“There were several high-quality firms. I’m hoping that we’re going to do an optimization to find costs we can extract from the system to lower rates, similar to what we did with the water-sewer optimization,” said Scott Stradley, former Utilities Commission chair who evaluated the applicants. “I’m not sold on going deeper into debt with huge capital projects which would give us marginal savings.”

None of the firms presented specific proposals, and neither a scope of services nor a budget has been developed for the rate study. Purchasing Director John O’Brien said the city is not permitted to ask about hourly fees or estimated cost for the project. He and City Manager Jim O’Connor said once a firm is chosen, rates and terms will be negotiated.

Stradley said he expects the study to be expensive – based upon previous consulting work the city has commissioned, it could cost hundreds of thousands of dollars.

O’Brien said the presentations by the four finalists, which will take place at 9:30 a.m. in Council Chambers, are closed so the firms cannot see each other’s presentations. He said a change in the state law called the Consultants Competitive Negotiation Act lays out how the city is supposed to choose consultants.

After the presentations and question-and-answer sessions, O’Brien said the doors will be opened for a public discussion session. Then Electric Utility Director Tom Richards, Power Resources Director Ted Fletcher and former Utilities Commission chair Scott Stradley will recommend a firm. The City Council members will have the final say when they reconvene after the holidays on Jan. 6.

Also coming up on the electric front is the formal mediation in the Town of Indian River Shores vs. City of Vero Beach lawsuit, which is scheduled for Dec. 17 at Vero Beach Community Center. The mediation, led by Tallahassee attorney Carlos Alvarez, will be open to the public.