2003-2013 losses reported to Public Service Commission
COMMENTARY
MARK SCHUMANN
Recently, the Press Journal and the island weekly have spent much ink and paper lamenting losses the Florida Municipal Power Agency suffered hedging fuel costs. As regrettable as the setbacks are, the FMPA was not alone when it got caught on the wrong side of the 2009 fall in natural gas prices.
According to reports filed with the Florida Public Service Commission, Florida Power & Light lost $3.6 billion between 2003 and 2013 hedging fuel prices. New utility “expert” and Press Journal columnist Larry Reisman has yet to report this news, though he has described the FMPA’s fuel hedging as “unorthodox,” “risky,” “poor” investments.
While bashing the FMPA, Reisman can’t say enough about how much better off everyone will be if Vero Beach’s electric utility were sold to the utility giant that employes his publisher’s wife as its vice president of external affairs.
In his latest column, the Press Journal’s pundit repeated FPL’s claim that the 34,000 customers of Vero Electric will save some $20 million a year, if the sale can be concluded. Neither Reisman nor FPL representatives have published their calculations.
Reisman claimed the rate differential between Vero Electric and FPL is 27 percent for 1000 kilowatt hours. In truth, available statistics reveal FPL’s rate is $97.08, compared to Vero Beach’s rate of $123.93 – a differential of 21.6 percent. Reisman also knows, but fails to consider, that in the event of a sale, in-city customers of Vero Electric would pay a 6 percent franchise fee on top of FPL’s rate. Accounting for a franchise fee, the rate differential between Vero Electric and FPL is 16.9 percent, not the 27 percent Reisman reports.
Reisman also knows, but refuses to report, that the city is taking meaningful steps to further lower rates. Making this point, of course, would not be helpful to his boss’s wife at FPL. What is Reisman’s motivation for reporting just half the truth? Only he can say.
Reisman argues the FMPA board of directors should be composed almost exclusively of elected officials, many of whom would be prone to making compromised short-term decisions out of political expediency. To put a large, complex utility in the hands of politicians who serve two-year terms at the pleasure of voters would be about as wise as giving an advertising executive with no newsroom experience the reins of a daily newspaper.
Quite simply, Reisman’s proposal is a recipe for failure.
Indian River Guardian 
Next up for Mr. Reisman will be taking over for Russ Lemmon, who used to be the utility expert, the counting out of state license plates.
It was so strange when the City Council actually prevented their very-knowledgeable staff from attending the utility FMPA meetings. And it goes on today. Do they really think they can just learn this all on the run?? You can’t. Indeed, you actually need experts. What a huge mistake when you think you know it all.
Lynne, I generally agree with you, though I also think the FMPA and the City of Vero Beach will benefit from Randy Old’s participation on the board.
Mark, not often do I laugh when I read about this matter. Thanks. Oh, and as a thought experiment, imagine PJ’s coverage of all this a few years ago written by Kenric Ward.
I confessed I do not know what Kenric had to say regarding the proposed power sale. Was he thoughtful and balanced in his reporting, or did he, like Reisman and Lemmon before him, serve as a propagandist for Florida Power & Light? If Kenric wasn’t willing to serve up the party line, maybe that had something to do with his departure.