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Angry lawmakers rap power agency on audit findings

STORY BY LISA ZAHNER (Week of April 2, 2015)

TALLAHASSEE – The Florida Joint Legislative Audit Committee grilled Florida Municipal Power Agency officials Monday, expressing doubt the co-op intends to implement meaningful reforms in response to a recent Auditor General’s report critical of their operations.

Demanding that corrective actions be submitted in writing in 60 days, key members of the committee seem willing – if not satisfied – to consider recommending regulation of the FMPA by the Florida Public Service Commission, or even repeal of the charter by which the FMPA operates as a tax-exempt joint-action agency.

Committee members expressed dismay over the wasteful spending, the executive perks, the risky fuel hedging and investment practices of the FMPA which have all driven rates up over the past decade.

But what really provoked lawmakers was FMPA representatives giving lip service to the idea of owning up to their mistakes, while CEO Nick Guarriello and General Counsel Fred Bryant didn’t even bother to show up for the meeting.

“The general manager and the general counsel are very busy people,” said FMPA Deputy General Counsel and head of legal affairs Jody Finklea, evoking hisses from a few of the 60 or so people gathered in the chamber.

Guarriello supposedly had a physical therapy appointment and Bryant was reportedly sick. Chairman Sen. Joseph Abruzzo of Palm Beach County said Bryant and Guarriello would be subpoenaed next time the committee wished to question them. He also said the FMPA would now be slotted for follow-up audits each year.

Board Chair Bill Conrad spoke first for the FMPA, offering a historic overview of the humble beginnings of an organization founded to help small towns in need of power. He explained why his town of Newberry joined. “Former elected officials tell me that we made that decision because we wanted to control our own destiny,” Conrad said.

The problem with that history lesson that instead of controlling their own destiny, members like Newberry and Vero Beach have given over all control of electric rates to an unwieldy and poorly managed conglomeration of 31 municipalities – many of which syphon off millions of dollars from electric customers to subsidize property taxes.

“In Newberry, we’re happy with our rates,” Conrad said. What he didn’t say is that Newberry residents at year’s end paid 14 percent higher rates than neighboring Duke Energy Florida and 39 percent higher rates than FPL.

Auditor Marilyn Rosetti presented a summary of the critical findings to the committee, and then took questions. Sen. Rob Bradley, who represents Alachua, Bradford and Clay counties – including Conrad’s own burg of Newberry – questioned Rosetti about the seemingly perpetual and inextricable nature of the FMPA contracts.

“The concern about the FMPA from my district is with regard to the 30-year contract that rolls and rolls and you can never get out of it. Like Hotel California,” Bradley said.

Rosetti explained that members may leave once all the debt is defeased, but, she said, “It’s pretty rare that they will have no debt.”

Vero’s predicament came front and center as Sen. Wilton Simpson and other committee members pressured Finklea to explain how a member could equitably and reasonably exit the co-op. Finklea’s response, in so many words, was, “It’s complex.”

To that, Simpson, who represents Pasco, Hernando and Sumter counties, proffered that if the FMPA has grown so incredibly complex, and if it was in fact a monster created out of the womb of the Florida Legislature, might it not be time for the legislature to let member cities go their separate ways.

Rep. Debbie Mayfield, who authored a bill this session that could place the FMPA under the regulation of the Florida Public Service Commission, questioned Rosetti about what authority the state wields over the FMPA to make sure risky practices and excesses found in the audit are not repeated.

“Is there any particular regulatory agency or group that they are reviewed by?” Mayfield asked, knowing full well the answer.

“Who is looking out for the ratepayers?”

“There is no state oversight,” Rosetti responded. “Whether or not they should be put under regulation of the PSC is a legislative issue.”