City’s outside counsel advises against legal challenge to FMPA contracts

MARK SCHUMANN

Those who hope to conclude Florida Power & Light’s proposed acquisition of Vero Electric by challenging the City’s contractual obligations to the Florida Municipal Power Agency and its bondholders are standing on sinking sand. At least that is the opinion of attorney Schef Wright, a utility law expert hired by the City to help conclude the power sale, if at all possible.

In a 9-page letter to City Manager Jim O’Connor and City Attorney Wayne Comment, Wright laid out in detail the history of the City’s power supply and project support contracts with the FMPA. Those contracts, Wright explained, were validated by the Florida Supreme Court in 1982, before bonds were sold to finance the projects. The court ruling validating the contracts protects bond investors and, as a consequence, also precludes any future challenges – by the City, by FPL, by the Indian River County Commission, by the Town of Indian River Shores, by local utility activists such as Glenn Heran, Dr. Stephen Faherty and Charlie Wilson, by anyone, period.

“…it is our conclusion and opinion that the City cannot bring an action to have the Project Contracts declared invalid with any realistic hope of success. Any such action by the City would be barred by the express provisions of Section 75.09, Florida Statutes…,” Wright explained.

According to FPL Vice President of External Affairs Amy Brunjes, the utility giant is not willing to call it a day. In a June 16 letter to O’Connor, Brunjes wrote, “…FPL’s focus remains on a complete sale of the Vero Beach utility…”

Key provisions of the purchase and sale contract signed in February 2013 by Tracy Carroll, Craig Fletcher and Pilar Turner cannot be met and/or have fallen through, such as the power transfer agreements between Vero Beach, FPL and the Orlando Utilities Commission. Despite the inability of the City to find a buyer for its FMPA power entitlement shares, Brunjes indicated that FPL is determined to hold the City to a contract that, due to a last-minute provision agreed to by Carroll, Fletcher and Turner, will not expire until December 31, 2016.

Below is the full text of attorney Schef Wright’s June 16 letter to O’Connor and Comment.

4 comments

Since “Key provisions of the contract signed in February 2013 by Tracy Carroll, Craig Fletcher and Pilar Turner cannot be met and/or have fallen through,”, is it not appropriate to demand that FPL provide reason and rationale to keep the contract active? If that does not exist, then the contract should be voided and the COVB released to provide alternative measures to serve its customers.

OK, I did not read every word of the information from Attorney Wright, but his conclusion leads me to my own conclusion. It would be cheaper for us to pay FPL to get out of this idiotic “contract” – this wonderful deal that was supposed to solve all our problems – and get on with repairing this ship known as Vero Beach. It’s “sink or swim” time – not two more years down the road.

Seems to me that the first group of attorneys should have told us this a few millions of dollars ago. It also seems to me that our City Manager and our City Attorney have no other choice but to advise the City Coucil (as President Ford once said) “This long nighjtmare is over.” The City should not spend one more dime on this so called contract. If FPL wants to continue what is obvious an exercise in futility let them do so. In the meantime we should explore all efforts to lower electric rates. If the contract will not allow us to do so until it expires in 2016 and FPL will not allow us out then it obvious who the bad guys are.