COMMENTARY

MARK SCHUMANN

Given that the management of Vero Beach 32963 regularly solicits donations, which its publisher cleverly calls “voluntary subscriptions,” cynical observers are inclined to wonder whether backing for the barrier island tabloid may be coming from Florida Power & Light’s public relations budget, or from some of the utility giant’s larger shareholders.

How else can one explain why the island tabloid served up what sounded like FPL propaganda in the guise of an “Insight Editorial” this week?  In its opinion piece, the newspaper’s editorial writer demonstrated a knowledge deficit regarding the potential for the sale of Vero Electric’s out-of-city customers to FPL, a deal FPL would like to avoid if it can instead acquire the full system.

For example, it is not true, as the island weekly claimed, that the current City Council can simply “pull the plug” on the electric sale.  As has been widely reported and confirmed by the City’s transactional attorney, the Council is legally bound to conclude the sale, if FPL chooses to go forward under the terms of the contract approved by voters last March.

While accusing Vice Mayor Jay Kramer of “mischievously trying to block the sale,” the island tabloid’s editors misreported important facts and demonstrated ignorance of the status of the negotiations.

In truth, the fate of the sale of the Vero Electric rests, not with the City Council, but with negotiators for FPL, the Florida Municipal Power Agency and the Orlando Utilities Commission.  FPL now knows the price the FMPA has said it will need to assume and absorb Vero Beach’s power entitlements for the first three years following the sale.  Armed with that information, FPL’s negotiators have reportedly gone back to the OUC to see if they can make a better deal.  If neither the FMPA nor the OUC offers work for FPL, then it will be time to consider a partial sale and other options for lowering rates.

For the 22,000 out-of-city customers of Vero Electric, a partial sale would place them in the hands of the good folks at FPL, which is exactly what they claim the want.  The remaining 12,000 customers within the city would become part of a smaller utility, one that could operate without the power plant, and which could, through re-negotiated wholesale power agreements, become more efficient – at least in the short run.  (See Inside Vero interview with Jay Kramer)

The island weekly reported in its opinion piece this week that FPL would pay “far, far less” for Vero Electric’s 22,000 out-of-city customers that the city will receive in a full sale.   This claim is simply not true.  In a partial sale, the city would avoid the $64 million cost of paying the OUC to take on its FMPA power entitlements and to cancel an existing wholesale power contract.  ($34 million in cash, $10 million in gas transmission rights, and $20 million to cancel the city’s current agreement with the OUC)

The reality is that in a partial sale the city would net approximately $20 million more than in a sale of the full system.  As well, the city would benefit from access to approximately $18 million in unencumbered utility reserves as a result of a partial sale.

For the first five years of its existence, the island newspaper has been content to limit the dissemination of its negativity to the 32963 zip code.  In a move that may prove to be the dawn of disaster for those who care about Vero Beach, the island tabloid recently announced plans to essentially begin regularly misinforming readers living in 3,000 mainland homes – but only in “upscale” communities.  At least for now, the remainder of mainland Vero Beach will be spared the island tabloid’s bias and negativity.