Published December 13,2013.

COMMENTARY

MARK SCHUMANN

Did you know a state statute already exists that would allow for the creation of an independent utility authority to manage and operate Vero Electric?  Such an authority would give all customers a voice in setting rates.

So why has this option not been brought forward by Glenn Heran, or state Rep. Debbie Mayfield, or the members of the Indian River County Commission, all of who seem ready to do battle with the Florida Municipal Power Agency?

Speaking to south beach property owners recently, Mayfield said two local bills she is sponsoring in the coming legislative session are intended to address her concern for Vero Electric’s customers outside the city, those in the unincorporated areas, such as the south barrier island and in the Town of Indian River Shores.

One bill would place Vero Beach’s electric utility under the jurisdiction of the Florida Public Service Commission.  The second bill would require a survey of customers outside the city to determine who they would prefer to have as an electric utility provider.

Mayfield’s second bill could face the strongest opposition, because it will likely be seen by some as the first step toward statewide deregulation of electric utilities, a move even investor-owned utilities may not welcome.

Because a portion of Vero Electric’s revenue, approximately 6 percent, is transferred to the city’s general fund to help pay for city services, Mayfield contends Vero Electric’s 22,000 customers outside the city are taxed without representation.

Others counter that the 6 percent transfer to the city’s general fund is not a tax, but represents a return on investment for the city, just as investor-owned utilities such as FPL earn a return on investment.

Mayfield insists her proposal to give the PSC jurisdiction to regulate Vero Electric’s rates and contract relationships is a move intended to give Vero Electric’s county and Shores customers representation.

Some would argue the PSC, which is appointed by the governor, has proved compliant with the wishes of the state’s large investor-owned utilities and will likely have little if any concern for Vero Electric’s customers. (See: At the PSC, a confederacy of yes men – and women)

Though Mayfield claims her bill is the only hope for recourse, she is ignoring the fact that a state statute already exists which would allow for the creation of an independent utility authority that would manage and operate Vero Electric.  Such a utility authority could also operate the water and sewer system and would represent all customers inside and outside the City of Vero Beach.

Another obvious alternative to Mayfield’s attempt to persuade the Florida Legislature to pass special legislation that will apply only to Vero Beach, would be for the residents and businesses in the unincorporated areas served by Vero Electric and/or the city’s water and sewer utility to be annexed into the city.  To further increase representation, the city council could be enlarged from five to perhaps seven members.

In return for paying city taxes, and lower county taxes, the residents and businesses in the newly incorporated areas would, arguably, receive better services and would have a vote and a voice in setting utility rates.

When the Florida Legislature originally established self-regulation for municipal utilities, legislators were not so careless as to leave the system without checks and balances.  By law, rates charged by municipal utilities must be fair and reasonable, and customers have the right to challenge rates in court. A third alternative to placing hope in relief from the PSC, then, would be for those who feel strongly that Vero Electric’s rates are unjustifiable to take their case to court.

Why have Glenn Heran, Dr. Steven Faherty, the Indian River County Commission, and others who are so critical of Vero Electric not taken the city to court for rate relief?  Could it be that they fear a court ruling that would contradict their view?

Despite Mayfield’s assertions that she is only seeking to ensure representation for Vero Electric’s customers outside the city limits, her proposed legislation seems intended to force Vero Beach to sell its outside customers to Florida Power & Light, if a sale of the full system proves impossible.