“The Shores Town Council may well press ahead with a lawsuit that could cost Shores taxpayers and Vero Electric customers million of dollars, but in the end no one will be well served. It is time for the Shores Town Council and the Indian River County Commission to support the Vero Beach City Council as it moves ahead with lowering electric rates and hopefully forming a utility authority that can fairly represent all 34,000 customers of Vero Electric.”

COMMENTARY

MARK SCHUMANN

The news coming out of Tallahassee yesterday was not good, at least not for the Indian River County Commission, the Indian River Shores Town Council and pro-sale utility activists who are hoping the Florida Public Service Commission will assist them in forcing Vero Beach out of the electric utility business.

Though some are already putting the best possible spin on what is clearly a setback, the fact is the PSC’s Office of the General Council and Division of Economics jointly released a report yesterday recommending the PSC deny the Indian River County Commission’s request for a statement clarifying the County’s claimed rights when the franchise agreement between the City and the County expires in 2016.

The PSC is expected to hear oral arguments and then act on or dismiss the County’s request when it meets in Tallahassee November 25.

Following release of the PSC staff recommendation yesterday, Indian River County Attorney Dylan Reingold was quoted in a press report saying, “We are reviewing the PSC staff report and we look forward to presenting our position on November 25.”

Essentially, the County’s argument that it should be free to force Vero Beach to surrender its out-of-city electric customers and utility infrastructure when the franchise agreement expires in 2016. The Town of Indian River Shores is making the same claim in a lawsuit brought against Vero Beach in circuit court. The franchise agreement between the Shores and Vero Beach expires in 2017.

Underlying the franchise agreement, however, are several PSC-approved service territory agreements dating back as far as 1971. To answer the County’s request for clarification of its “rights” post 2016, the PSC would first have to agree with the premise of the County’s argument, which is that PSC service territory assignments to utility providers are subordinate to franchise agreements between municipalities and utilities. Every electric utility in Florida, including Florida Power & Light, has appealed to the PSC to reject the County’s argument.

The stakes are high, for if the PSC were to subordinate existing service territory assignments to less stable franchise agreements, Florida’s utility landscape could undergo tectonic shifts. Destabilizing service areas and customer bases could make it impossible for utilities to raise the capital they need to continue providing a stable supply of electric power across the state.

Though the Indian River County Commission and the Indian River Shores Town Council do not want to hear this, the PSC’s responsibility for maintaining a secure supply of power statewide is a far more important priority than worrying about any single group’s claimed right to buy power from which every Florida utility happens to be the lowest cost provider at any given time. This argument rests on little more than a presumption of privilege.

If the PCS follows the recommendations of its staff and rejects the County’s request, it will be for the five members of the County Commission to explain why they spent taxpayer money on yet another long shot. The Commission should also answer to the public for having driven up bills for Vero Electric customers by forcing Vero Beach to defend itself. Over the past several years, Vero Electric’s customers have already paid some $2 million in legal fees to compensate $500-hour transactional attorneys for their failed effort to craft a deal to sell the utility to FPL. Enough is enough.

Assuming the County’s PSC filing is set aside next week, the one remaining black hole threatening to suck in millions of dollars from the customers of Vero Electric will be the lawsuit brought against Vero Beach by the Town of Indian River Shores.

Yesterday, Shores Mayor Brian Barefoot released the following statement. “Earlier today, the staff of the Florida Public Service Commission (PSC) issued a memorandum recommending that the PSC decline to issue a declaratory statement to Indian River County, which had petitioned for guidance regarding the County’s rights upon the expiration of its franchise agreement with the Vero Beach electric utility. The PSC staff recommendation appears to be based on procedural grounds, and does not address the substantive issues raised in the County’s petition,” Barefoot said.

Mayor Barefoot is an intelligent man who has access to competent legal counsel. Before he continues to insist PSC staff is recommending dismissal of the County’s request solely on “procedural grounds” he might do well to read the PSC staff report more closely.

The Shores Town Council may well press ahead with a lawsuit that could cost Shores taxpayers and Vero Electric customers million, but in the end no one will be well served. It is time for the Shores Town Council and the Indian River County Commission to support the Vero Beach City Council as it moves ahead with lowering electric rates and hopefully forming a utility authority that can fairly represent all 34,000 customers of Vero Electric.