Legislature Oks funds for audit of power co-op
The latest twist in the Vero electric saga came last week with discovery that the Florida Legislature has inserted $200,000 into the budget of the Auditor General’s office to fund a full operational audit of the Florida Municipal Power Association.
And on Tuesday’s county commission agenda, as of press time, was an emergency item requested by Commissioner Bob Solari to draft a letter to Gov. Rick Scott pleading with him not to line-item veto the funding for the probe.
“The legislature put a ‘proviso’ in the budget which will result in an audit of the FMPA. It is clear that the legislature did not simply mean to have the Auditor General duplicate the annual audit that FMPA presently gets,” Solari wrote in a memo.
What Solari and others appear to be hoping is that the Auditor General will “clearly ask that FMPA’s true economic value and member equity be addressed.
“Basically, for the exercise to be meaningful, all of the FMPA’s assets should be marked to market so that the member municipalities, and more importantly the citizens of the municipalities, can get an understanding of the value of the assets that they ultimately own,” Solari said.
The $200,000 placed in the state budget for the FMPA audit apparently is what the county’s Tallahassee lobbyists have really been working on while Rep. Debbie Mayfield’s ill-conceived and doomed pieces of utility legislation were going nowhere.
The call for the audit would appear to have been fueled by Vero’s discovery, after 31 years of paying on its ownership share of FMPA projects, that the city apparently has built up no equity position while FMPA has roughly $2.3 billion in liabilities, according to calculations from public records.
On top of that, Vero’s FMPA power-supply contracts have a negative value in the neighborhood of $86 million judging by what other parties have said they would want to be paid to take them off Vero’s hands.
“I think it’s important when ratepayers across the state are facing high electric rates that we get an audit and try to lower our FMPA rates. I think we have to get a better handle on the bills that we’re receiving from FMPA, and on the power costs,” said Vero Councilwoman Pilar Turner, who serves as the city’s representative on the FMPA Board of Directors
“Unfortunately FMPA extended their contract with Purvis and Gray, their auditors that they’ve had for quite a few years and I think it’s important that you alternate your auditors and you get a fresh perspective on things,” she said.
Turner added that the FMPA’s projects, especially the Stanton 1 and Stanton 2 coal plants operated by OUC, “are carrying a heavy debt.”
Having an outside valuation by state officials on FMPA assets and liabilities, as well as a hard look at the co-op’s contracts, could potentially help Vero quantify some of the questions it needs to answer if it is ever to move forward with a sale of the utility.
“It certainly would get us more information,” Turner said.