COMMENTARY

“If the PSC dismisses the County’s petition, or issues a ruling affirming the supremacy of PSC-approved territory agreements, the central pillar of the Shores’ lawsuit against the City will crumble, leaving the Shores Town Council and the County Commission with little option but to finally attempt the novel approach of seeking to be part of the solution to lower rates, rather than a part of the problem.”

MARK SCHUMANN

In its precedent-setting petition to the Florida Public Service Commission, the Indian River County Commission is asking the PSC to set aside a long-standing system of utility service territory agreements that many believe is vital to maintaining stability, economic efficiencies and service reliability in Florida’s electric utility industry.  The PSC is likely to decide on the County petition by early October.

In preparing their response to the County, PSC Commissioners will not be without input from utilities contending they will be adversely impacted if the County gets its way. To date, Duke Energy, the Orlando Utilities Commission, Tampa Electric Company, the Florida Electric Cooperatives Association, the Florida Municipal Electric Association and even Florida Power & Light have requested permission to intervene in the County’s petition. Yes, even FPL, though more gentle in the wording of its initial filing, seems poised to raise concerns about the implications of the County’s petition.

The Florida Electric Cooperatives Association was the sharpest in its assessment, arguing that if the PSC were to honor the County’s request the consequences would be “devastating.”  “The relief requested by the County could have devastating impact on the reliability of the electric grid and on the electric rates for cooperative consumer members,” read the FECA’s filing with the PSC.

Duke Energy’s filing suggested the degree to which the state’s investor-owned utilities are prepared to oppose the County’s petition. “Approval of the County’s assertion that it has the authority to expel its electric service provider due to the expiration of a franchise agreement, notwithstanding the existing Commission-approved territory agreement between the City and Florida Power & Light, could significantly impact the provision of electric services throughout the State, as well as eviscerate the Commission’s jurisdiction over territorial agreements in general,” an attorney for Duke Energy wrote.

The Tampa Electric Company weighed in as well, advising the PSC that the County’s argument is “entirely inconsistent” with Commission precedent and state law. “Tampa Electric believes the Board (Indian River County Commission) is urging the Commission (PSC) to adopt interpretations of its jurisdictions, in relationship to an electric utility franchise agreement, which are entirely inconsistent with Chapter 366, Florida Statutes, both on its face and as interpreted and applied in the past by this Commission and the Florida Supreme Court.”

Writing on behalf of the FMEA. Kissimmee Utility Authority Vice President and General Counsel, Arthur Lacerte, Jr, outlined what many in the municipal power industry see as the major issues raised by the County’s to force Vero Beach to discontinue service to Vero Electric’s out-of-city customers.

1. Are the Commission’s orders and jurisdiction with respect to electric utility service areas and territorial matters exclusive and superior to franchise agreements authorized by municipalities and counties?

2. Does a county or municipality, by virtue of an authorized franchise agreement, have the right or power to determine what utility provides electric service in an existing Commission-approved service area?

3. Does an electric utility have the right to continue to serve customers within its Commission-approved service territory after the expiration of a franchise agreement which purports to exclusively grant franchise rights to provide retail electric utility service within portions of that existing Commission-approved service territory?

In summarizing a 52-page motion to dismiss the County Commission’s petition, Vero Beach’s special counsel, Schef Wright wrote, “…the Board’s (County Commission’s) decision with respect to the County-City Franchise Agreement is of no effect or consequence to the Commission’s (PSC’s) jurisdiction; correspondingly, the Commission need not, and would not, take any action on the County’s decision to terminate the Franchise or to extend it.  The County may terminate the Franchise if it wishes, as may the City, but neither act would affect the Commission’s exclusive jurisdiction over service areas, territorial agreements, planning, and the avoidance of uneconomic duplication of electric service facilities.”

In a parallel move on Vero Beach’s utility service territory, the Indian River Shores Town Council filed suit last month seeking to force Vero Beach to remove its utility infrastructure from within the town and to abandon its Shores customers when the franchise agreement between the Shores and City expires in late 2016.  State law requires the Shores and the City to first mediate their differences. Mediation is expected to begin later this month, though it is unclear on what basis the City would or could concede to the Shores’ demand.

If the PSC dismisses the County’s petition, or issues a ruling affirming the supremacy of PSC-approved territory agreements, the central pillar of the Shores’ lawsuit against the City will crumble, leaving the Shores Town Council and the County Commission with little option but to finally attempt the novel approach of seeking to be part of the solution to lower rates, rather than a part of the problem.