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Shores earmarks first $10,000 for electric battle

STORY BY LISA ZAHNER (Week of May 1, 2014)

The Indian River Shores Town Council has taken the first step down a road that could lead to extrication of Shores’ residents from Vero’s electric utility.

The action was taken last week with little discussion. Noticeably absent was the harsh rhetoric from the previous meeting born out of the council’s frustration over the dimming prospects of getting lower electric rates any time soon as a result of the sale Vero electric to Florida Power & Light.

This time around, there were no grand speeches about Vero’s high electric rates or the need to represent the economic interests of the Town should a sale of Vero electric to FP&L indeed fall through.

It was unclear whether the tamped-down dialogue represents a back-pedaling by Shores officials, or simply a shift from anger to resignation to the reality that the Town might get dragged into years of costly legal action.

Still, Town Manager Robbie Stabe can spend up to $10,000 to engage a specialized utility attorney – or deal with any other issues, for that matter. Mayor Brian Barefoot and Councilman Dick Haverland said the direction of the council, at this point, was simply to get help in studying the options.

Last month, the council voted to empower Councilman Tom Cadden and Bill Grealis, the town’s representative on the Vero Beach Utilities Commission, to meet with an attorney and report back to council on next steps.

Prior to last week’s meeting, Cadden said no sit-down had occurred, but that the approval of the funds to retain an attorney was “what he hoped” would come out of last Thursday’s meeting.

The initial suggestion was for the town to attempt to re-establish a relationship with a Stuart law firm it had used five years ago to look into utility matters. Now, Stabe is tasked with vetting a handful of law firms to find the best fit with the town’s needs.

The Shores, combined with mainland Indian River County and South Beach residents outside the Vero city limits, make up 61 percent of Vero’s nearly 34,000 electric utility customers and provide up to 70 percent of the city’s electric revenues.

Each year, Vero Beach skims nearly $8 million from electric bills to supplement the city’s general fund. That cash, about twice what Vero collects in property taxes, currently also subsidizes the Vero Beach Police Department, recreation programs and city hall operations.

Vero has 30-year franchise agreements with the Shores and the County which expire in a couple of years, plus a territory granted by the state, based on the fact that no other utility was equipped to provide electric service to these customers outside city limits back in the 1970s and 1980s.  This is no longer the case.

Still on the docket, but on hold, is a complaint with the Florida Public Service Commission asking it to review  Vero’s electric territory and ultimately let customers outside the city to choose a lower-cost provider, namely FPL. Losing territory outside municipal borders could devastate city finances.

Utility activists Dr. Stephen Faherty and CPA Glenn Heran have estimated it would cost at least $160,000 in legal fees to dust off, re-write and litigate the complaint filed with the PSC.

Should the Shores wish to join as a party to that complaint, or file a separate complaint, the $10,000 approved last week would be a mere down payment on actual costs of legal services.

Mayor Barefoot seemed to indicate cognizance of a much larger potential investment when he termed the $10,000 a “deposit for services.”

Heran, who attended last week’s meeting but did not speak, said afterward, “I’m pleased to see the Shores take this definitive step as a sovereign entity.  The best possible scenario would be if the Shores could work in tandem with the County’s efforts to prosecute the PSC petition to free their constituents from economic serfdom.”

The Board of County Commissioners spent nearly $80,000 to hire lobbyists Ballard Partners to explore legislative options, and retained the Tallahassee law firm of Nabors Giblin & Nickerson to work on electric, water and wastewater utility issues.