MARK SCHUMANN

In a story written by reporter Henry Stephens and posted on TCPalm.com Monday, Scripps Treasure Coast Newspapers again overstated by $26 million the cash value of FPL’s latest offer for Vero Electric.

To be sure, the deal has changed.  FPL had earlier agreed to pay $111.5 million in cash and is now proposing to pay an additional $26 million, while also “loaning” the City of Vero Beach $26 million. That $26 million “loan” will be paid back through a surcharge to be assessed the customers of Vero Electric.  At best, FPL’s cash offer is now $137.5 million, not $163.5 million, as Scripps continues to report.

Scripps is also not reporting that the additional cash FPL has proposed to put into the deal to pay the Florida Municipal Power Agency will be offset by a larger amount that was to have gone to the Orlando Utilities Commission in a power purchase agreement.  The power purchase agreement between FPL and the OUC would have had the OUC take on and then sell to FPL Vero Beach’s power entitlements.  That plan was shelved because of tax issues.

Under the original power purchase agreement, FPL had said it would pay a $30 million premium to buy Vero Beach’s power from the Orlando Utilities Commission for three years. In placing a value on its initial offer, FPL representatives claimed it would cost $30 million more to buy Vero Beach’s power entitlements from the OUC through the end 2017 than it would otherwise cost FPL to generate the power at one of its own plants. (See related story)

In addressing the City Council last week, FPL attorney Patrick Bryan said FPL does not share the Florida Municipal Power Agency’s concern that the plan would have put at risk the tax exempt status of the FMPA’s bonds, or that a Internal Revenue Service private use ruling would be necessary.  Bryan’s remark contradicted an explination transactional attorney John Igoe’s gave the Council when the power purchase plan was first abandoned.  At the time, Igoe told the Council all parties, including FPL, agreed Internal Revenue Service approval would be needed and might be difficult to secure.

Now FPL proposes to pay the FMPA $26 million, with the city’s electric customers contributing another $26 million. Consequently, though FPL’s cash offer is up from $111.5 million to $137.5 million, the total value of its offer has been reduced by $4 million. Scripps continues to misreport the cash value of FPL’s latest offer, while making no mention of the decrease in the total value of the deal.