Power deal gets scrutiny, leading to further delay
Four hours of intense scrutiny of the fourth iteration of Vero electric’s proposed new wholesale power deal with the Orlando Utilities Commission still left important questions unanswered, proving, as one member of the public commented from the podium, that the deal “is not ready for prime time.”
Vero Beach’s Utilities Commission finally decided to recommend that the City Council postpone a vote on the contract, and the separate Finance Commission hasn’t yet met to consider the deal.
Ideally, Vero’s Finance and Utilities Commissions, made up of hand-picked volunteers chosen for their knowledge and interest, should have had all the pertinent information far in advance their joint meeting Monday so they could have read it through, maybe tidied up a few details and forwarded a recommendation to the City Council leading to a vote on Tuesday .
That is what Mayor Dick Winger, a big backer of the new deal, wanted to see happen. That, as it turned out, was a far cry from what actually happened.
A detailed summary presented by lead utility attorney Robert Scheffel “Schef” Wright laying out the benefits and corresponding concessions to OUC in the deal was only distributed Monday morning.
A second key document, a long-awaited study of the impacts of shuttering Big Blue and importing 54 megawatts of replacement “peaking power,” was also distributed at the last minute. The highly technical, 27-page document tells Vero what the prospects are for transmitting those electrons over Florida Power and Light lines from Orlando, and what might need to be done to shore up infrastructure to handle the additional load and maintain reliability.
City Manager Jim O’Connor – who over the weekend had not pored through the study findings in detail, but had relied upon a summary from Interim Utilities Director Ted Fletcher – said: “The report does look very good for us. It does not appear to have any major issues at all for us.
“It looks like something that can be done in a short period of time,” O’Connor said.
Timing is a concern, because the proposed OUC contract requires Vero to start paying for the 54 megawatts of peaking power by June 30 of next year whether or not transmission to carry it is in place. Delays could mean paying for that power, plus paying for overhead and personnel at Big Blue.
Utilities Commission member Scott Stradley said by the end of Monday’s meeting, “We do not have time to get to the transmission study today,” but O’Connor assured the members that FPL’s study would very likely be accepted by OUC and by regulators. O’Connor said transmission plans were moving forward on a parallel track to the OUC deal, as shuttering Big Blue was a necessity – its aging generators are deemed no longer reliable or sustainable in the long-term.
“We had made the decision; I had been told we are getting out of the generation business,” O’Connor said.
When committee members assembled at City Hall, finally with all this data in hand, there was another glitch.
Though the Utilities Commission had five members present – more than a quorum – the Finance Commission was shy one member for a quorum.
This deficiency was discovered about a half-hour into the meeting when City Attorney Wayne Coment got up to the podium and informed the two Finance Commission members present – Chairman Peter Gorry and member Glen Brovont – that they had to step down from the dais and take seats in the audience with the public.
Gorry asked that he and Brovont be granted ample opportunities to speak, as they both had prepared questions and had significant concerns about the contract’s implications. Utilities Commission Chair Jack Shupe agreed.
That problem solved, another controversy surfaced: Should the meeting even go forward, as it was advertised as a joint session of both the Utilities and Finance commissions? Legal advice was sought and it was agreed that the Utilities Commission could proceed.
A motion to adjourn was made an hour into the proceedings, but it failed 4-1, with City Council Candidate Laura Moss dissenting. Consultants had been paid to attend, and members and the public might as well get a crack at all this new and not-so-new information, it was decided.
Mayor Winger chimed in, saying he would place an item on the next day’s agenda asking the City Council whether or not it wanted to delay passage of the OUC contract, considering the Finance Commission had not formally weighed in.
Though careful of what he said – sensitive to Sunshine Law concerns as Councilman Randy Old and Councilwoman Amelia Graves were present – Winger’s tone was one of caution. “The City Council has options, one option being to set new dates,” he said.
Stradley put Winger on the spot, asking if he could cite an instance where the City Council proceeded with a major decision like this without the input of both the Utilities and Finance Commissions.
“I can’t think of a case of it,” Winger responded, noting that Vero prides itself on its transparency and that, in light of controversies surrounding the passage of the 2008 OUC contract and the fact that it was kept from the public eye, “We’ve been very careful” to make sure every detail of this OUC deal is fully vetted in public and available for anyone to read.
“I would be very disappointed if the City Council went forward without the input of the Finance Commission,” Stradley said.
Indian River Shores Vice-Mayor Jerry Weick, whose town is in litigation with Vero over alleged mismanagement of the Vero electric utility, rose to the podium at one point with a message to the Vero Beach City Council. “I would caution you to tread very slowly,” Weick said. “Cross your T’s and dot your I’s.” If due caution was not taken, Vero would be under harsh scrutiny for another potential debacle like the 2008 OUC contract. “The end result is you’ll be doubted again,” Weick said.
When the five city council members convened on Tuesday, they agreed to discuss the contract, question the experts on hand and allow the public to express concerns, but not push for final approval at this juncture.
For its part, the Utilities Commission voted unanimously on several recommendations to the council, the most important of which was to postpone the final vote on the estimated $900 million, eight-year deal.
The newest iteration of the deal incorporates what Wright termed “levelized charges” intended to keep Vero’s rates smooth over the eight years of the contract. Savings to a typical 1,000-kilowatt bill could amount to $10 or $11 on the portion of the power purchased from OUC, but that gets figured in with the city’s major fixed costs and overhead, and the cost of the power Vero purchases from the Florida Municipal Electric Agency, so net savings would likely end up significantly less.
Indian River Shores’ member on the Utilities Commission, Bob Auwaerter, raised several major concerns, not the least of which was the need to further explore what Vero’s actual demand for electricity will be going forward. He also questioned the city’s analysis that its gas transportation contracts are worth roughly $10 million to OUC. “I think that’s something we need to take a look at, are we getting our money’s worth for this?” Auwaerter said.
The Utilities Commission also voted to ask for the actual Excel spreadsheet analysis behind the cost figures put forth by Wright and consultant Bill Harrington. The commission was only given a PDF of the printed spreadsheet, not a real spreadsheet on which they could trace the source of the numbers.
Four hours and 19 minutes in, the Utilities Commission adjourned, having forwarded along its concerns, questions and requests for more information to the City Council and to staff, attorneys and consultants urging them to get on more firm footing with all the unknowns before making a move.
“Y’all and the City Council are my client, I’ll do what you want to do,” Wright said, in response to a direct query as to whether or not he would try to steer the City Council to vote with so many questions still unanswered.
Barring a special call meeting, the City Council is set to convene next on Oct. 20.