NEWS ANALYSIS

“Nothing would better serve FPL’s appetite for growth and its aversion to competition than a breakup of the FMPA, which serves customers in 31 cities across Florida.” 

Editor’s note: Some 99 percent of the press coverage of the Auditor General’s preliminary findings has been by Vero Beach media. A tempered, impartial report on the audit was posted Jan. 30 by Orlando Sentinel reporter, Kevin Spear. See: State auditors fault power agency’s practices

MARK SCHUMANN

After first hearing from Indian River County Attorney Dylan Reingold and utility activist Glen Heran, the Florida Municipal Power Agency’s executive committee and board of directors today approved the agency’s responses to 15 findings resulting from a six-month audit by the State Auditor General’s Office.

Reingold told the FMPA board the audit’s fundings justify management changes and regulation of the joint action agency by the Florida Public Service Commission.  “Your options are to blame, sweep it under the rug, make excuses or actually do something,” Reingold said.

Reingold represents a county commission that has vowed to destroy the FMPA. One FMPA board member objected to Reingold’s comments, saying the agency’s meetings and records are open to the public. The major issues raised in the audit — fuel hedging, interest rate swaps and an investment in Public Gas Partners — he said, have all been known for years and have been extensively discussed at FMPA’s board meetings.

Kissimmee Mayor Jim Swan, addressing Riengold, Heran and a contingent from Indian River County, said, “I think you can’t get along with one another down there.”

Swan accused Indian River County’s representatives of dragging the FMPA into Vero Beach and Indian River County’s “local problems.”  “And now you want to impose your costs on my constituents,” he said.

FMPA chairman Bill Conrad said he wanted to see the agency “use the audit for positive purposes.”

Vero Beach City Councilman Randy Old, who represents the city on the FMPA board, approved the agency’s response to the audit. Old told the board, though, the response did not go far enough. He urged the board to commit to forming a committee to work with an “independent, third party consultant” to review the FMPA’s governance and management practices. The board is to consider Old’s proposal at a meeting later this week.

Beyond questions about Orlando Magic tickets and the cost of paying a vendor to maintain indoor plants, the real issues raised in the Auditor General’s report focus on losses the FMPA suffered through fuel hedging, interest rate swaps and an investment in Public Gas Partners. FMPA staff and board members are quick to point out those initiatives were taken under a previous general manager. That explanation, though, leaves unaddressed the question of the FMPA board’s ultimate responsibility for those very same decisions.

A point of major debate in today’s meeting was whether to include an attachment explaining the FMPA’s perspective on the context of the audit, which was lobbied for by Indian River County and by Florida Power & Light. Two-hundred thousand dollars to pay for the audit was included in the state budget at the close of the 2014 legislative session by Sen. Joe Negron, who several months earlier received a $50,000 contribution from FPL. The FMPA board decided the attachment sounded defensive, and chose not to include it in its response to the Auditor General.

Though partisans will see what they want in the audit and in the FMPA’s responses to it, the findings are not likely to lead rational legislators to try to force a breakup of the agency. That move was recently called for by Press Journal columnist Larry Reisman, who’s publisher is married to a key FPL vice president. In 2013, FPL CEO Eric Silagy told a groups of investors one of his company’s growth opportunities is to take over municipal utilities.  Nothing would better serve FPL’s appetite for growth and its aversion to competition than a breakup of the FMPA, which serves customers in 31 cities across Florida.

The FMPA isn’t taking any chances, though. At its next meeting, in addition to considering Old’s suggestions, the board will take up a proposal to hire additional lobbying help and a communications consultant to counter Indian River County’s plans to carry out a statewide public relations attack on the agency.

This afternoon, the FMPA issued the following press release about the action taken at today’s joint meeting of the board and executive committee.

Utility’s Board and Executive Committee approve response to address audit findings

ORLANDO, Fla., Feb. 16, 2015 – Florida Municipal Power Agency (FMPA) Board of Directors and All-Requirements Project Executive Committee members met today to review a draft response to the Florida Auditor General’s preliminary and tentative operational audit report.

The Board and Executive Committee both approved a draft response to the audit report with a few edits suggested during the meeting. FMPA will provide these written comments to the Auditor General by the Feb. 20 deadline.

“As we work to finalize our response to the Auditor General, FMPA continues to value input from the public, and we appreciate those who attended our Board meeting today in Orlando,” said FMPA Board Chairman and Mayor of the City of Newberry Bill Conrad.

“We are approaching our response to this audit as an opportunity to improve how we operate, to serve our customers better and to make any changes to our policies that lead to that result. We are proud of the 37 years of service that FMPA has provided in this state while saving our members hundreds of millions of dollars in power supply costs. As this process moves forward we look forward to sharing our next steps, and we remain committed to using this as an opportunity to get better, and enhancing our services at all levels for our customers,” said Conrad.