County Commission to sow seeds of discontent statewide

COMMENTARY

“Looking outside for the solution and blaming others may make for good politics, but it is certainly a poor example of leadership.”

“Proving they believe animus is a contagion, the members of the County Commission last week approved hiring a consultant to help stir up discontent in other FMPA cities.”

“It is time for the members of the FMPA board to prove they are more than a band of bubbas who travel to Orlando once a month to sign off on every recommendation made by their professional staff.”

MARK SCHUMANN

When the Florida Public Service Commission meets in Tallahassee Tuesday, the regulatory agency is expected to respond to separate requests from Indian River County and the City of Vero Beach for clarification on what rights, if any, Vero Beach has to continue serving some 20,000 electric customers outside its city limits beyond 2017. That is when the franchise agreement between the City and the County is set to expire.

No one disputes that the contract authorizing Vero Beach to collect a 6 percent fee on behalf of the County will expire in 2017. The question is whether PSC-approved service territory agreements are superior to and survive the expiration of franchise agreements.

Every municipal and investor owned electric utility in Florida, including Florida Power & Light, is urging the PSC to assert its authority to insure a stable statewide power grid. Franchise agreements, they say, cannot be the sole, determining source of authority for utilities to serve their customers. Indian River County’s claim, if affirmed by the PSC, would unsettle the power grid and would almost surely scare away bond investors upon whom utilities depend for much needed capital.

If the PSC rules in favor of Vero Beach, as it almost surely will, the decision will be a major setback to the members of the Indian River County Commission, who, as puppets of FPL, are determined to help the utility giant bully its way across the state buying municipal utilities – starting with Vero Electric.

Despite the anticipation of a setback in Tallahassee Tuesday, the County Commission is now energized, even puffed up with indignation over recently released preliminary findings in the State Auditor General’s review of the Florida Municipal Power Agency. Never mind that the most troubling findings in the audit have been known for years. And never mind that the FMPA board has already taken steps to reduce the agency’s risk in its efforts to hedge the cost of fuel.

Still, the State Auditor General’s findings are significant, and should not be minimized. If the members of the FMPA board are serious about their responsibilities, they will act quickly and decisively when they meet next, likely later this week. At a minimum, the FMPA board should hire an outside consultant to help establish more effective and assertive oversight.

To increase public confidence in the process, the FMPA board should appoint a committee to vet and recommend a consultant who will then report directly to the board. Whoever is hired to help the FMPA improve its operations and governance should not be a puppet of staff. It is time for the members of the FMPA board to prove they are more than a band of bubbas who travel to Orlando once a month to sign off on every recommendation made by their professional staff.

However, it is important to keep in mind that nothing the FMPA board does to improve operations, reduce costs and strengthen oversight will be enough to satisfy the Indian River County Commission. After all, improvements at the FMPA will do nothing to further FPL’s effort to expand its customer base, starting with the acquisition of Vero Electric. And let’s face it, if the Commissioners really believed every ill, every problem, every challenge facing Indian River County would magically resolve itself if electric rates were only lower, they would have long ago exercised their power to drop the six percent franchise fee now tacked on to Vero Electric’s bills.

With the Auditor General’s preliminary findings in hand, the County Commission now seems determined to find a way to strong-arm the FMPA into letting Vero Beach out of its contracts, even if doing so means appealing to the Florida Legislature and the courts to force a break up of the joint action agency.

Proving they believe animus is a contagion, the members of the County Commission last week approved hiring a consultant to help stir up discontent in other FMPA cities. This effort to spread the hostility and spitefulness that has so poisoned Vero Beach and Indian River County politics began last December, when State Rep. Debbie Mayfield (Vero Beach) sent a letter to the editors of every newspaper serving FMPA communities. “The FMPA has a monopolistic dictatorship that’s boarding on un-American,” Mayfield, or whoever wrote the letter for her, claimed.

Mayfield, or her ghost writer, added, “…chances are, if you are a customer of a municipal power provider you could be paying too much for your power.”

Is Mayfield’s claim true, and will it resonate in other communities across the state? Let’s consider the facts. Allowing for a 6 percent franchise fee, nine of the 14 members of the FMPA’s All Requirements Project have rates lower than the average for Florida’s investor owned utilities. Kissimmee Electric, which receives its power from the All Requirements Project, has the lowest bill in the state at 1000 kilowatt hours. In many other categories, Tallahassee and Quincy, both municipal utilities, have rates lower than all five investor owned utilities in Florida.

One utility activist went before the Vero Beach City Council this past week proposing to invite representatives from every FMPA city to attend a gripe session to be held in Vero Beach. Given that these municipally owned utilities are returning on average 6 percent to their local governments to help fund basic services, while charging rates competitive with investor owned power providers, why would their leaders have any interest in breaking up the FMPA?

Indian River County has many qualities that make it a special community, but the reality is Vero Beach/Indian River County is not the center of the universe. State Rep. Debbie Mayfield and the members of the Indian River County Commission, not to mention the local daily newspaper, may be in FPL’s pocket, but it is worth considering that every other FMPA city has its own representation in the Florida Legislature. It is even more important to remember that everyone has equal standing before the courts.

The notion, which seems to be gaining traction in some circles, that the sale of Vero Electric to FPL can and will finally be accomplished by dismantling the FMPA is pure delusion. As they say, though, nothing dies harder than a bad idea.

As utility activist, Steven Faherty, wrote in one of his recent email updates, “the fight continues,” and it continues, largely, because the members of the Indian River County Commission lack statesmanship.  Rather than supporting the Vero Beach City Council in its effort to lower rates, the County Commission continues to waste taxpayer money in one ill-advised assault after another on the FMPA.  Looking outside for the solution and blaming others may make for good politics, but it is certainly a poor example of leadership.

Below are the comparative rates for 1000 kWh of residential use based on the latest statewide bill comparison available from the Florida Municipal Electric Association.

Editor’s note: This story, first posted at 9:28 a.m., was corrected at 6:59 p.m. Kissimmee Electric’s rate for 1000 kWh was originally listed as $98.41.  Kissimmee Electric’s reporting of its rates to the FMEA has not included an 8 percent transfer to the city’s general fund.  Accounting for the transfer, KUA’s rate is $107.00, $14.81 per kWh below the statewide average for Florida’s investor owned utilities.  

Investor Owned Utilities		w/ franchise fee
Florida Power & Light	98.97	104.91
Tampa Electric	107.39	113.93
Gulf Power	128.7	136.42
Duke Energy	122.16	129.49
Average	114.3	121.81
FMPA All Requirements Members
Bushnell		140.05
Clewiston		102.32
Fort Mead		134.56
Fort Pierce		119.34
Green Cove Springs		130.5
Havana		108.69
Jacksonville Beach		123.91
Key West		129.92
Kissimmee		107.00
Lake Worth		114.73
Leesburg		138.97
Newberry		125.5
Ocala		118.64
Stark		120.95
Average		122.45
Vero Beach		123.93