NEWS ANALYSIS

MARK SCHUMANN

Acting on behalf of the Indian River County Commission, attorney Floyd Self of the Tallahassee law firm, Gonzalez Saggio & Harlan, filed a complaint with the Florida Public Service Commission yesterday. Essentially, the County Commission is asking the PSC to hand much of Vero Beach’s electric service territory over to the County.

The County Commission’s PSC complaint comes on the heels of last week’s news that the Indian River Shores Town Council is prepared to go to court to force Vero Beach to remove its utility infrastructure from within the town limits when the existing franchise agreement expires at the end of 2016.

Some 60 percent of the customers of Vero Electric, or 20,000, are located outside the city limits.  A few thousand of those customers are in the Town of Indian River Shores.  The remainder are located in unincorporated areas of the County contiguous to Vero Beach’s city limits.

The County Commission is arguing that when the franchise agreement between the City and the County expires in 2017, Vero Beach will, at that point, have no right to serve customers outside the city limits.  Sources knowledgable with utility law and with the role of the Public Service Commission say the County’s complaint rests on shaky ground.

First, the City’s existing service territory was granted by the PSC long before the City and County entered into a franchise agreement.  (In fact, the City’s original service territory, established in 1920, was in place even before the County was formed by the Florida Legislature in 1925.) The only purpose of a franchise agreement is to authorize the utility service provider, in this case the City, to collect a franchise fee on behalf of the County.  Absent a franchise agreement, the County would have no right to assess a 6 percent fee on the out-of-city customers of Vero Electric.  Franchise agreements, experts say, have no bearing on a utility’s right and responsibility to provide reliable electric service within their designated service territories.

At the center of the County’s argument is the assertion that because another power provider — Florida Power & Light — is ready, willing and able to offer lower rates that Vero Electric, the PSC should rescind Vero Beach’s right to serve County customers.  If accepted by the PSC, the County’s argument could turn Florida’s utility industry upside down.  For example, several municipal utilities are currently offering rates below FPL.  Should the PSC strip FPL of its service territory, for example, and hand it over to Lakeland or any number of other municipal utilities now offering better rates the FPL?

One utility expert said the hearing before the PSC, when it finally comes, is likely to attract a drove of interested parties.  With the County Commission’s filing, the current battle is no longer between Vero Beach, Indian River County and the Town of Indian River Shores.  It is now clearly a statewide struggle.

One short-term effect of the Shores lawsuit and the County’s PSC complaint will be monumental legal bills for the County, the Shores and the customers of Vero Electric.  One suggestion floated today for covering Vero Electric’s legal bills would be for the City Council to reinstate a 10 percent surcharge on Vero Electric’s county customers.  That surcharge was unilaterally dropped by the City several years ago.

Below is the summary of the County Commission’s PSC Complaint against the City of Vero Beach: