MARK SCHUMANN

With a rhythmic frequency not unlike Chinese water torture, utility activist Stephen Faherty issues his weekly “Utility Update.”  In large, bold, red numbers, each edition tracks what Faherty claims to be the cumulative rate differential between Vero Electric and Florida Power & Light, calculated from the date when FPL first submitted an offer in April, 2011.

Faherty’s most recent “Utility Update” includes a not-so-veiled threat to the Florida Municipal Power Agency.  Faherty reports that he and fellow utility activist Glenn Heran have a “contingency plan” for compelling the FMPA to give Vero Beach a waiver to leave the All Requirements Project before September 30, 2016.

“Could be costly to them,” Faherty wrote.

FMPA Assistant General Manager, Mark McCain, said such threats cannot be helpful to the current negotiations.

City Manager Jim O’Connor said he had no knowledge of what Faherty and Heran have in mind for their solo, citizen diplomacy.

Councilwoman Pilar Turner said she did not believe Faherty collaborated with any staff, the city’s transactional attorneys, or any member of the City Council.  “I believe they are acting as independent citizens, who are certainly within their rights to prepare a contingency plan.  Although FMPA continues to highlight obstacles, I believe this just highlights the resolve of the Council, the voters and the customers of Vero Electric, who remain committed to proceeding with the sale, and we will continue to find a way.”

Though Faherty is given to accentuating his estimate of the rate differential between Vero Electric and FPL, the gap is undeniably no less than 20 percent, even in the best of times.

However, we will likely never see reported in Faherty’s newsletter the numbers $153.5 million and $7 million.  Those figures represent just how far off Faherty and Heran were when, touting their credentials as a PhD and a CPA,  they employed what have proved to be overly optimistic financial models to convince the community of the benefits of turning over Vero Electric to FPL.

At least one financial model Heran and Faherty distributed projected the city would net $156.5 million.  As it turns out, the city will likely walk away from the closing table with just $3 million, and that after turning over a utility worth nearly $200 million.

At least one financial model Heran and Faherty presented in 2009 estimated the sale would result in an annual boost of nearly $600,000 to the General Fund.  It now appears the General Fund will lose some $7 million transferred each year from the electric fund.

Now that city leaders have finally begun specifying the level of cuts in services that will be needed in the wake of the sale of the electric system, citizens are beginning to push back.

It is hardly by chance that the downsides of the sale is only now being made clear.  After all, voters have already been asked to approve the deal, which they did last March by a wide margin.

In its application to the Federal Energy Regulatory Commission seeking approval for the sale, FPL stated that it is paying $111.5 million for Vero Electric.  Yet, in their separate filings with the FERC, Heran and Faherty both pegged the number at closer to $180 million.

In promoting the deal to voters in mailings and newspaper advertising, FPL also valued its offer at nearly $180 million.  If Heran, Faherty and FPL want the community to believe the company is paying some $180 million for Vero Electric, why are federal regulators being told by FPL the value of the transaction is just $111.5 million? Federal regulators will surely be looking into the disparity.