“Meanwhile, FMPA Assistant General Manager Mark McCain sounded a more temperate, cautious tone.  “FMPA is committed to working with Vero Beach, but it will be difficult to conclude the sale by January because this is just one of many aspects of a very complex deal that must be resolved before closing,” McCain said today.”

NEWS ANALYSIS

MARK SCHUMANN

Any clinking of champagne glasses following TCPalm.com’s posting of what was little more than a Florida Power & Light press release may or may not prove to be premature.  At the very least, readers would do well to note that the story was primarily based on only one source – FPL.

The TCPalm.com story, bylined by Arnie Rosenberg, reported FPL’s announcement that the company has agreed to pay half of the $52 million it will cost to compensate the Florida Municipal Power Agency for assuming Vero Beach’s power entitlements for up to three years.

According to FPL President Eric Silagy, the 34,000 customers of Vero Electric will have pay the other half of the $52 million, assuming the proposed surcharge is approved by the Vero Beach City Council, the Florida Public Service Commission and ultimately by the voters of Vero Beach.

Sounding positive about at closing by the end of 2014, Silagy essentially went public today in his negotiations with the Florida Municipal Power Agency when he met with the Scripps Treasure Coast Newspapers editorial board yesterday.  (FPL’s external affairs manager, Amy Brunjes, is the wife of Scripps Treasure Coast Newspapers’ publisher, Bob Brunjes.)

Meanwhile, FMPA Assistant General Manager Mark McCain sounded a more temperate, cautious tone.  “FMPA is committed to working with Vero Beach, but it will be difficult to conclude the sale by January because this is just one of many aspects of a very complex deal that must be resolved before closing,” McCain said today.

As one might have expected from an FPL press release, Scripps was quick to point out that Vero Electric’s rates have risen in recent years, but the story did not also explain that the increases have been due, at least in part, to $1.5 million in legal costs and to decision the City Council has made since committing to sell the electric system.

Again, as one might expect from an FPL press release, the TCPalm.com story made no mention of the fact that FPL’s rates have also risen recently.  To be sure, based on the January, 2014 Florida Municipal Electric Association bill comparison, FPL is no longer the lowest cost power provider in the state.

Scripps also did not explain that the $26 million FPL is offering to pay the FMPA to assume power it does not want or need is $4 million less than the company had earlier said it would pay the Orlando Utilities Commission to assume the power.

Though Silagy told members of the Scripps editorial board he is puzzled by FMPA’s number, McCain stressed that the $52 million would in no way be a windfall to the FMPA.  “The money will be used to pay costs associated with Vero Beach’s power entitlements, McCain said.  That assertion could well be true.  After all, the Orlando Utilities Commission also proposed terms for assuming Vero Beach’s FMPA power before Jan. 1, 2018, but that offer was not accepted by FPL.

By insisting the FMPA’s priorities are to honor its contracts and to follow an approval process that accounts the interests of all stake holders, McCain reiterated a position the FMPA has long held regarding Vero Beach’s request for a waiver to leave the All Requirements Project before September 31, 2016.

McCain said that regardless of the conditions FPL may have put on its offer, each and every member of the All Requirements Project, as well as the members of the Stanton I, Stanton II, St. Lucie Two power projects, must approve the relevant components of the deal, including a requested waiver that would allow for Vero Beach’s early withdrawal from the All Requirements Project.

Other aspects of the deal still to be resolved, McCain said, are Vero Beach’s contingent liabilities with the FMPA, stranded costs, the drafting of contract providing for FMPA’s assumption of Vero Beach’s power for up to three years, a redrafting of the power transfer agreement between the OUC and the City of Vero Beach, Florida Public Service Commission approval, review by a consulting engineer, and approval by bond counsel, bond trustees, bond insurers, and ultimately by the voters of Vero Beach.