Heady’s latest proposal is just plain wrong headed

Turner and Wilson seem equally eager to see Vero Electric split

COMMENTARY

“How and why Turner, Heady and Wilson are so pleased to see the County and the Shores attempt to pull off an assault on the very city they seek to serve is a question only they can explain.”

MARK SCHUMANN

Brian Heady
Brian Heady
Pilar Turner
Pilar Turner
Charlie Wilson
Charlie Wilson

City Councilwoman Pilar Turner and council candidates Charlie Wilson and Brian Heady champion the merits of the County Commission’s and the Indian River Shores Town Council’s efforts split up Vero Electric, a move that would surely drive up electric rates and city taxes.

Listening to the three of them, you would think they believe the next election will be decided by anyone other than the voters of Vero Beach. Yes, outsides may attempt to influence the outcome of Vero Beach’s municipal elections, as Shores Councilman Gerry Weick has done in contributing to Wilson’s campaign; and Florida Power & Light may again spend tens of thousands of dollars to persuade Vero Beach voters to elect council members who will cave to FPL’s wishes, but in the end, when the votes are cast, Vero Beach residents and taxpayers are the ones who will have to decide what is in the best interest of their city.

Heady recently floated a proposal that the Shores Town Council and the County Commission should buy the City’s electric customer base and utility infrastructure that lies within their jurisdictions. After buying their way into the utility business, Heady envisions the Shores and the County would turn around and sell to FPL.

Heady claims “everybody would be happy,” but he has clearly not run the numbers or considered the financial implication of his proposal. Without question, rates would rise for Vero Electric’s remaining customers and city taxes would have to go up. Though Turner supposedly serves the people of Vero Beach, and though Heady and Wilson seek election to the Vero Beach City Council, all three seem inclined to support what is surely a terrible deal for the people of Vero Beach.

Here’s why. Vero Electric receives one third of its power from three Florida Municipal Power Agency projects. The remaining two thirds is purchased through a wholesale power agreement with the Orlando Utilities Commission. Over the past 14 months, the cost of FMPA power has run $80.84 per megawatt hour. OUC’s power has cost $73.76 per megawatt hour. Weighting the average, Vero Beach is paying $75.79 per megawatt hour, given its current power suppliers.

A truncated Vero Electric, one with just 12,000 customers rather than 34,000 customers, would have to buy its way out of the OUC contract and would then be left with only the higher-priced FMPA power. As a consequence, Vero Electric’s fuel costs would rise 7 to 10 percent.

Because transmission and distribution costs and customer service costs could not be cut by two-thirds after a so-called “partial sale,” a much smaller Vero Electric will have higher operating costs per customer than it does today. In total, these factors are likely to drive up rates for Vero Electric’s remaining city customers as much as 25 percent.

How could Vero Beach voters logically support such a plan?

Through inevitable tax increases, Vero Beach residents and taxpayers would be further hurt by a partial sale. Currently, Vero Electric contributes approximately $5.5 million to the City’s general fund to help pay for municipal services, such as police protection, parks and recreation. (This transfer represents 6 percent of Vero Electric operating revenues.  In contrast, the PSC allows FPL a return on its investment of some 11 percent.) In a partial sale, $3.3 million of the utility transfer would be lost. Vero Electric also pays for approximately $1.7 million in administrative expenses, such as the salaries and health insurance benefits of city council members. In a partial sale, some $1 million of the transfer to cover administrative expenses would also be lost.

Quite simply, without making still more drastic cuts to city services, a splitting up of Vero Electric would leave the city some $4 million short. Even if half of that deficit could be made up in spending cuts, city residents would still be facing a 50 percent tax increase on top of higher electric rates.

So, again I ask, how could this proposal possibly be one Vero Beach voters will logically support?

How and why Turner, Heady and Wilson are so pleased to see the County Commission and the Shores Town Council attempt to pull off an assault on the very city they seek to serve is a question only they can explain.

One comment

  1. Mark what you say is absolutely correct! If I lived within the city limits I would not want to do a thing either, I would have to feel very good getting a “free lunch” at the expense of those good neighbors not living in the city and paying high electric rates. My problem of course is that I am one of the victims and I do not feel so good about it. If Heady has a plan that would end this madness then I am one to support it. I feel for the City of Vero Beach for sooner or later they will have to face the reality of higher taxes and a cut in services. There is no way that the lawsuit from IRShores is frivolous and a waste of $250,000! How Vero got itself into this mess will some day be exposed, but I guarantee it is no picnic for the present city council that has to take the “heat”!

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