MARK SCHUMANN
When negotiators for the City of Vero Beach, Florida Power & Light, the Orlando Utilities Commission and the Florida Municipal Power Agency meet tomorrow they will have before them a new, and potentially more lucrative offer for the FMPA.
Vero Beach has four contracts with the FMPA, three power supply contracts and one contract covering the city’s participation the the FMPA’s All Requirements Project. Extricating the city from these long-term, multi-million dollar agreements has been the biggest hurdle in selling Vero Electric to FPL.
The proposal reportedly includes a payment of some $30 million in cash to the FMPA, interstate transmission rights and an option for the FMPA to participate in a new nuclear plant proposed to be built at Turkey Point.
FPL’s latest offer was discussed earlier this week in a dinner meeting between FPL President Eric Silagy and FMPA General Manager and C.E.O., Nicholas Guarriello, and was then outlined in an August 20 letter from Silagy.
News of a better deal for the FMPA comes on the heels of yesterday’s announcement that FPL’s parent company, NextEra energy, plans to cut 1,000 jobs, including 90 positions in Florida.
By all accounts, the negotiations for the sale of Vero Electric to FPL stalled late last month when it became clear the proposed structure of the deal would raise concerns for FMPA’s bond counsel and the Internal Revenue Service.
The original deal called for the OUC to assume Vero Beach’s commitments to three FMPA power projects – St. Lucie Two, Stanton I and Stanton II.
The proposal was for the OUC to then sell Vero Beach’s Stanton I and II power to FPL for up to three years. That component of the deal raised concerns with the FMPA and its bond counsel, because it would likely have violated IRS restrictions on the sale of municipal power to investor owned utilities.
FPL representatives had estimated it would cost the company $30 million over three years to buy Vero Beach’s FMPA coal-fired Stanton I and Stanton II power, rather than generating the 38 megawatts on its own.
At the center of the new deal is a workaround that calls for the FMPA to absorb Vero Beach’s power purchase commitments for up to three years, after which time the OUC would take the power entitlement obligations, including debt service. In exchange, the OUC is to receive $34 million in cash.
As an enticement to absorb some 38 megawatts of power for three years, the FMPA is to be paid an unspecified amount, which, according to one source, is close to $30 million. The payment is to compensate the FMPA for the difference in the payments Vero Beach has been making and the market price, which is currently lower.
FPL’s latest offer also includes and option for the FMPA to participate in its proposed Turkey Point 6 & 7 nuclear plant, and the promise of interstate transmission rights that will enable the FMPA to buy nuclear power out of state.
Though both FPL and the OUC deny any connection between OUC’s willingness to participate in the sale of Vero Electric and an option agreement OUC’s was given to participate in Turkey Point 6 & 7, the concurrency of the two deals raised eyebrows in the Florida municipal power community.
Until FPL and the OUC signed a nuclear option agreement last September, FPL had long insisted it would need all of the power generated from two new nuclear reactors to be build at its Turkey Point plant.
In exchange for the concessions FPL is proposing, Silagy made it clear the FMPA would be expected to help facilitate its purchase of Vero Electric, including accelerating Vero Beach’s withdrawal from the FMPA’s All-Requirements Project.
To date, FMPA representatives have insisted Vero Beach’s withdrawal from the ARP before October 1, 2016 would require unanimous approval of all 14 member cities.
Indian River Guardian 
If FMPA can get a better deal from FP&L why can’t Vero get a better deal ,too. Even those in favor of the sale from the outset know Vero ‘s sale to FP&L is under valued. This is what most anti sale people have been saying from the beginning.
Good points, all. The “sell-at-any-price”crowd, who in the county won’t bear the real cost of this bad deal, keep saying there is NO OTHER WAY to do this, and yet the deals keep on changing. Vero just refuses to ask for a better deal, and we keep paying and paying more.
The people who claim that somehow we who want a decent price are “naysayers,” who only use name-calling and derision at anything we say, can’t seem to understand why ruining the city is not in our best interest. sigh.
Does this mean Charlie Wilson is not going to get 100,000 dollars from the county?
After listening to Glenn Heran speak it looks like he will win the $ 100,000 race. Maybe Charlie Wilson can get in on the deal, but first he must back off of his antagonism toward some commissioners and Joe B. Give Vero more money and we can all be in favor of the sale.
I don’t think, based on this news, that the county will be spending this money. I want lower rates as much as the next guy. I don’t think this new deal will allow Vero to renegotiate its end of the deal. That ship has sailed.