Audit sought of shadow electric lobbying group
When the Florida Auditor General camps out in the Orlando offices of the Florida Municipal Power Agency co-op to perform a full operational audit, the Indian River Board of County Commissioners wants state officials to also look into the FMPA’s shadow lobbying organization.
While the FMPA is a public entity, the Florida Municipal Electric Association or FMEA is classified as a trade organization and thereby not covered under Florida’s Sunshine laws.
How much money the FMEA collects and, more importantly, how it spends that cash to promote and protect the cause of municipal-owned electric utilities is a secret – even though potentially millions of dollars in membership dues paid to the FMEA each year come right out of electric customers’ bills.
The FMEA employs nine lobbyists, including its full-time executive director Barry Moline and its director of public affairs Amy Zubaly, to seek to thwart any attempted regulation of municipal electric utilities.
The others include: former House Speaker Larry Cretul; Rheb Harbison of former House Speaker Dean Cannon’s Capitol Insight lobbying firm; Cynthia Lorenzo and Alan Suskey, both also of Capitol Insight; attorney Bill Peebles of Peebles & Smith; former Florida Association of Counties legislative affairs director and Peebles’ partner John Wayne Smith; and Mark Zubaly of Southern Campaign Resources. Peebles and Smith also lobby for the FMPA, according to public record.
The FMEA also operates a political fundraising committee, Municipal Electric PAC (MuniPAC), which helps grease the wheels of government with campaign contributions. This election cycle so far, the FMEA has sunk $50,000 into its PAC and doled $31,000 of that out to campaigns, including $1,000 to Sen. Joe Negron and $3,000 to Gov. Rick Scott.
The FMPA and FMEA work hand in hand, as the groups’ memberships are nearly identical. The two organizations hold training sessions and conferences for both memberships. The FMEA even uses FMPA’s Orlando offices to hold closed-door meetings of the very same people who minutes later then have a public meeting in the very same conference room of the directors of the FMPA.
Vero Councilwoman Pilar Turner this spring was asked to leave the room when the FMEA convened its secret meeting in the room where the FMPA board was assembled. The topic that Turner was not permitted to hear discussed was how the FMEA was going to head off legislation introduced in Tallahassee by Rep. Debbie Mayfield to bring municipal electric utilities under the jurisdiction of the Florida Public Service Commission.
The City of Vero Beach cancelled its membership in the FMEA in 2011 when it did not send its annual dues check for $35,000 to the organization. City officials said they did not want to spend ratepayers’ money to help the FMEA wage political war on Vero’s ratepayers.
At the time, the FMEA was engaged in an all-out public relations campaign against the sale of Vero electric to Florida Power and Light. The FMEA Executive Director wrote guest columns in the local media lambasting the sale and the FMEA produced a slanted video using local opponents to the sale, including blogger Bea Gardner and former Utilities Commission member Herb Whittall, as spokespeople.
In May 2011 in the lead-up to the first referendum related to the sale, FMEA’s Moline published a whitepaper about the Vero sale to FPL in which he stated, “FPL’s rates will likely rise above Vero’s rates in the near future,” and predicted on an accompanying line graph that a “reasonable rate scenario” would put FPL’s rates about 5 percent higher than Vero’s in 2012.
Currently, Vero customers pay rates that are 25 percent higher than FPL. Earlier this year, that rate disparity was nearly 34 percent.
The FMEA is also widely suspected of conducting push-polling and of bankrolling Vero anti-sale activists with its funds, but because FMEA expenditures are not a matter of public record, the extent of its interference in Vero politics is not fully known.
There is $200,000 in the Auditor General’s budget to cover costs above and beyond the scope of a standard audit of the electric power co-op and its complex financial situation. Estimates of the co-op’s total outstanding liabilities range from $1.8 to $2.3 billion, a sum in which all the member cities – including Vero Beach – share responsibility.
The audit is expected to take several months to complete. It is the county’s argument that, to get to the bottom of the activities of the FMPA, the state has a duty to also probe into the FMEA.
A June 16 letter signed by Chairman Peter O’Bryan asks Auditor General David Martin to “conduct a comprehensive audit of the Florida Municipal Electric Association (FMEA) based upon the nature of the relationship between the FMEA and the FMPA and publish the results of said audit along with the financial statements.”
Also in O’Bryan’s letter are requests for the state to complete a “valuation of all assets of the FMPA at current fair market value based upon a purchase by a willing third-party buyer of all of the power generation, cash and investments.”
In the course of trying to sell its electric utility, Vero found out that the power purchase rights it is said to own actually have a negative worth of $29 million, but it would cost the city somewhere between $36 and $52 million just to get another utility to take them.
FMPA officials also recently told Vero that it is going to cost $46.1 million to cover so-called “stranded costs” to get out of the FMPA’s All-Requirements Project power production program, which has interests in several power plant facilities.
O’Bryan’s letter concludes, “The Board and our citizens believe that this audit is necessary in order to make the FMPA’s financial position transparent to us and all of the member cities.”
Apparently, the audit won’t start in all seriousness until the end of the month. On June 18, the Auditor General wrote to the FMPA about the scope and timing of the audit and what kind of access and resources auditors would need at the FMPA offices.
“We hope to schedule the entrance conference during the week beginning July 7, 2014, and start on-site audit field work the week of July 28, 2013, at which time we will need working space for our staff members.”