LUX ET VERITAS

Some leaders in the community, including members of the Indian River County Commission, our state representative and local utility activists seem ready to battle the Florida Municipal Power Agency in the legislature and in the courts.

One utility activists, who argues for the joint action agency’s dissolution, claims it is “an institution of inefficiently.” What exactly is the FMPA?

The FMPA is a wholesale power supplier owned by 31 municipal entities. VB was a founding member over three decades ago.

There are facilities financed by $1.55 Billion in loans proportionately shared by the owners and collateralized by their utility revenues.Should the revenues be insufficient or zero the deficit is to be covered by taxes.

Contracts  between FMPA and its owners are identical, a change in one requires a change in all. Exiting the VB contracts requires that the remaining members be made whole. This applies to future revenue/expense coverage as well as contingent liabilities that is, a past expense which occurred while the owner was a member.(eg soil contamination).

Operations expenses of facilities:

Fixed costs include FMPA staff and power plant employees, debt, maintenance, T & D; Variable costs are essentially fuel. FMPA’s sourcing from OUC are two plants fueled by expensive coal.

Florida has a surplus of power resulting in FMPA’s underutilized facilities with high fixed and variable costs

Low usage results in increased rates to cover costs in the member utilities which have to fund Enterprise specific internal expenses as well as city transfer payments.

Essentially, the 31 owners have a percentage of mortgage and purchasing agreements, thus, if one leaves it has to “buy out” its obligations. Fulminations, protestations, and lobbying do not absolve contracts or pay off loans.

Editor’s Note:  Much like “Lexington,” an anonymous commentator for The Economist magazine, “Lux et Veritas” offers commentary for readers of Inside Vero, addressing local politics, lagoon contamination, quality of education, Libertarian and Liberal excesses, media reporting and agendas, wealth disparity and more.  The views and opinions expressed by Lux et Veritas represent the editorial philosophy of Inside Vero.