MARK SCHUMANN

Late Thursday morning, Tim Trudell, Senior Media Relations Coordinator for the Orlando Utilities Commission, forwarded to Inside Vero a March 27 email revealing that Florida Power & Light and the OUC are negotiating a $41 million deal to clear one of three major hurdles remaining in the proposed sale of Vero Electric. The email was written by Florida Power & Light Vice President Sam Forrest and was directed to OUC Vice President of Electric Production Jan Aspuru.

Trudell had earlier indicated no documents or phone logs existed that would confirm recent negotiations have taken place between the OUC and Florida Power & Light. “I apologize, but I was only informed this morning that there was one email from FPL to OUC dated March 27 to Jan Aspuru,” Trudell wrote.

In the email, Forrest references a specific proposal from the OUC to assume Vero Beach’s power entitlement shares through Dec. 31, 2017 for $41 million. Forrest’s email to Aspuru confirms FPL and the OUC have, in fact, been negotiating terms under which the OUC would take on Vero Beach’s FMPA power entitlement shares through Dec. 21, 2017, as Forrest indicated in his April 15 letter to Vero Beach Mayor Richard Winger.

Forrest wrote, “As I mentioned last night, we are leaning toward accepting your offer of $41 million for the 2015-2017 timeframe on the buyout of Vero’s Stanton and Stanton II entitlements.”

Forrest continued, “I obviously won’t go into any detail, but I feel it is important we continue to push forward with the Council and bring this to resolution. If I do mention your proposed buy-out amount for the first three years, I will make it clear there are still hurdles with FMPA that need to be overcome in terms of FMPA’s proposed redlines to the transfer agreement between you and Vero Beach.”

In his April 15 letter to Winger, Forrest referred to FPL’s earlier proposal to pay the Florida Municipal Power Agency $52 million to take on the city’s FMPA power entitlements. That offer came with conditions FMPA leaders said were, “unworkable and unacceptable.” Though he addressed a proposal that was no longer under consideration, Forrest made no mention in his April 15 letter of the $41 million offer from the OUC.

As a part of FPL’s initial offer to buy Vero Electric, the company proposed to pay a $30 million premium to buy the city’s 38 megawatts of Stanton I and II power entitlement shares for three years. The $30 million, FPL spokesperson said, was over and above what it would cost the company to generate the power at its own plants.

When that proposal was shelved because of likely tax issues, FPL then offered to pay the FMPA $52 million to take on the power, with the cost to be shared equally by FPL and the 34,000 customers of Vero Electric. Now, the OUC is apparently offering to take on the power for $41 million. One question to be answered is how much of the $41 million FPL will propose to pass on to the customers of Vero Electric.

The following story was posted on InsideVero.com late yesterday afternoon:

The Orlando Utilities Commission’s response to a public records request for telephone logs and written documents raises questions about Florida Power & Light Vice President Sam Forrest’s claim that the two utilities are in “active and constructive” discussions.

In an April 15 letter to Vero Beach Mayor Richard Winger Forrest wrote, “…we are in active and constructive discussions with OUC to try to identify another path forward.”

Forrest was referring to finding a municipal utility, presumably the OUC, to take on Vero Beach’s Stanton I and II power entitlement shares through Dec. 31, 2017.

After negotiations between FPL and the Florida Municipal Power Agency fell through in early March, FMPA General Manager Nicholas Guarriello wrote FPL President Eric Silagy suggesting the OUC would be the logical buyer. On March 5, Guarriello wrote, “It seems more straightforward, as I have mentioned before, for FPL and OUC to directly negotiate a price — be it $52 million or any other figure — for the up-to-three-year power sale, which would avoid any IRS private use restrictions.”

According to Tim Trudell, Senior Media Relations Coordinator for the OUC, no public record of phone calls exists that would confirm recent communications have taken place between top officials for the OUC and FPL. (The City of Vero Beach, a much smaller organization than the OUC, does keep such records and regularly makes them available to the public upon request.)

Trudell also indicated no written documents exist that would confirm recent negotiations or conversations between FPL and OUC officials. “Since March 1, FPL has not provided OUC with any written proposals related to OUC taking on Vero Beach’s Stanton I II power supply entitlements through Dec. 31, 2017,” Trudell wrote in an April 21 email response to Inside Vero.

Trudell declined to confirm or deny that the OUC and FPL are currently in “active and constructive” discussions regarding the prospect of the OUC taking on Vero Beach’s FMPA power entitlement share through Dec. 31, 2017, as Forrest claimed in his April 15 letter to Winger.

In a separate agreement reached in the late summer of 2013, the OUC committed to assume Vero Beach’s position in three FMPA power projects (St. Lucie Two and Stanton I and II) as of Jan. 1, 2018. In exchange, the OUC is to receive $34 million in cash, as well as Vero Beach’s gas transmission rights, valued at as much as $10 million.

The OUC’s willingness to assume Vero Beach position in the power projects as of Dec. 31, 2018 was seen as a major step in concluding the sale of Vero Electric to FPL. Still unresolved, though, are questions about contingent liabilities and stranded costs, as well as the need to find a buyer for Vero Beach’s power entitlement shares through Dec. 31, 2017.

According to several sources, should the proposed sale of Vero Electric to FPL fall through, the OUC’s willingness to work with Vero Beach will be essential, if the 34,000 customers of Vero Electric are ever to see significant rate relief.