“The kindest thing to be said about the reasoning underpinning the Shores’ litigation against Vero Beach is that the case is not an example of fiery logic. More to the point, though, the Shores Town Council’s decision to fracture the community in this way is a monumental failure to exercise statesmanship.”

COMMENTARY

MARK SCHUMANN

In a July 18 letter addressed “Dear Neighbor,” Indian River Shores Mayor Brian Barefoot wrote explaining why he and the other members of the Town Council are willing to risk fracturing the community and are prepared to spend hundreds of thousands, if not millions of dollars, to wage a legal war with the City of Vero Beach.

In his letter, Barefoot explained that one of the objectives of the Shores’ lawsuit against Vero Beach is to restore, “the Constitutional right of our residents who have been forced to pay onerous rates to a city utility while having no voice in the decision of that utility.”

Barefoot did not mention that the Town of Indian River Shores has a designated representative of the Vero Beach Utilities Commission.

In describing Vero Beach’s rates as “onerous,” and “excessive” Barefoot also did not explain that, at $123 per KWH, Vero Beach’s current rate is no higher than that of a number of investor-owned utilities regulated by the Florida Public Service Commission.

The Shores seems to be hoping to make the case that the only reasonable rate is Florida Power & Light’s rate, but then to tell the full story, one would have to acknowledge that a number of municipal utilities are currently charging rates lower than FPL.

Without explaining the the Vero Beach City Council is already moving in the direction of forming a utility authority, Barefoot’s letter to the residents of Indian River Shores explained the Town is also suing to force the City of Vero Beach to form a utility authority, “that would be accountable to ALL customers.”

Ironically, pro-sale utility activists, most visibly and vocally Mark Mucher and Charlie Wilson, and their supporters on the City Council, Pilar Turner and Craig Fletcher, are the ones who now argue against the formation of a utility authority.  Though they offer other objections about wanting more streamlined government and about the importance of not “creating another layer of bureaucracy,” what they probably fear is that a utility authority would effectively represent the interest of all rate payers, and in doing so would weaken their argument that Vero Electric’s out-of-city customers are the victims of “taxation without representation.”

FPL strategists must realize that as the rate differential between Vero Electric and FPL continues to narrow, if the issue of ratepayer representation is also addressed, community-wide support for FPL’s acquisition of Vero Beach’s electric utility will surely wane.

However the terms of the deal may change, the numbers are surely not going to improve from FPL’s last offer, which included a $26-million surcharge to be assessed on Vero Beach’s 34,000 customers.  Without question, the cost of funding the sale will be far greater than the numbers placed before voters in the spring of 2013, when FPL gave utility activist Glenn Heran’s electioneering communications organization $100,000 to persuade voters to support the deal.

The third argument in the Shores’ lawsuit against Vero Beach is the Town Council’s request that Vero Electric “remove its electric system infrastructure” when the franchise agreement between the Town and the City expires in November 2016.

Barefoot’s letter did not explain that in addition to the franchise agreement, there also exists a service territory assignment that pre-dates the formation of the Town of Indian River Shores as an incorporated municipality. The mayor’s letter also did not address the fact that, with the exception of a few short roads within the Town, most of Vero Electric’s utility infrastructure within Indian River Shores is located on right of way in private communities and along A1A, which is a state-owned highway.

Essentially, the Shores lawsuit, which is likely to split the community and at a cost of millions in legal fees, is based on three weak arguments.  The Town asserts that any rate higher than the rate being charged by the lowest cost power provider in the state is “onerous” and “excessive.”  Second, the Town Council, without offering fair compensation to the City of Vero Beach, proses to force the City to remove utility infrastructure from right of way the Town does not even own.  Finally, the Town Council is asking the courts to force the City to form a utility authority, a move which the current City Council already seems prepared to take.

The kindest thing to be said about the reasoning underpinning the Shores’ litigation against Vero Beach is that the case is not an example of fiery logic.  More to the point, though, the Shores Town Council’s decision to fracture the community in this way is a monumental failure to exercise statesmanship.

See: Thanks to Shores Town Council, rather than a partial sale, FPL may wind up with a “partial steal”