FPL sets Aug. 25 deadline for City to accept partial sale offer

Kramer describes FPL’s offer as an “ultimatum”

COMMENTARY

MARK SCHUMANN

Jay Kramer
Jay Kramer

Addressing the Utilities Commission this morning, Vero Beach Mayor Jay Kramer said he would not support selling Vero Electric’s Indian River Shores customers for the $30 million Florida Power & Light has offered.

Given threats by the island weekly and others to use Kramer’s position against him in his Aug. 30 county commission primary contest against Bob Solari, Kramer’s strong stand for Vero Beach residents and electric customers is a display of political courage. Residents of Vero Beach, and county customers of Vero Electric, would do well to take note of Kramer’s willingness to stand up for them despite threats from Shores residents and their propaganda machine, the island “weakly.”

In his letter to Kramer amending the offer by imposing a deadline, FPL vice president Sam Forrest claimed to be motivated to “take the politics out of it.”

More likely, FPL imposed the Aug. 25 deadline, in advance of the Aug. 30 primary election, to put maximum political pressure on Kramer. FPL went from being a reluctant participant in the Shore’s partial sale scheme to calling the shots, and in doing so the utility giant again demonstrated its preference for playing hardball.

According to Kramer, because FPL’s proposed purchase price falls some $15 million short the number the City has set, the deal would amount to “throwing the remaining customers under the bus,” and all to benefit residents in the Shores.

As City Council candidate Tony Young pointed out, the proposed partial sale “shows preference to a wealthy neighborhood.”  Young suggested that if the residents of Oslo objected to their electric rates, they would not receive the same considerations that are now being afforded the residents of Indian River Shores. 

A team of five utility experts hired by the City to evaluate the likely impact of selling off Vero Electric’s Shores customers estimated the sale price would need to be at least $42.5 million to protect Vero Beach taxpayers and electric customers from facing higher taxes and higher electric rates as a result of any so-called partial sale.

A sale of the full system would be another matter, for under a full sale the City would no longer be running an electric utility and thus would not be saddled with contractual obligations and contingent liabilities.  Though City officials have said they would be interested in selling the full system to FPL, the contract approved by voters in the spring of 2012 cannot be executed because there is simply not enough money on the table to settle Vero Beach’s existing contractual obligations.

The value of FPL’s last offer for the full system was just under $200 million. Based on how much FPL is willing to pay per meter for Vero Electric’s Shores customers, one might conclude the full system of 34,000 meters is really worth closer to $325 million. Perhaps at $325 million a sale could be concluded that would benefit everyone, and not just the residents of Indian River Shores.  “That works for me,” Kramer said.

 

10 comments

  1. Jay Kramer showed the courage of his convictions. The type of man that should be elected to the county commission. 325 million seems a little light, I think north of 400 million is the real value.

  2. The point is that the Shores customers are being “taxed” illegally to fund City projects. This has been going on for years now. I can see why as a City resident Kramer would like to hold on to this wonderful “Cash Cow”, but the decent thing to do is to let it go. We who live in the Shores have the financial burden of contributing unjustly by over 30% to the City’s coffers. It is not right and Jay is making the wrong decision as far as I am concerned.To Vero:”Let my people go”!

  3. The facts also are that without City of Vero Beach, Indian River Shores may not have progressed as quickly as it did. I understand South Island residents could have had FPL but it wasn’t able to take them on back then. So, FPL missed opportunities in the past but now wants to reap benefits off of our City. I am sorry Indian River Shores does not appreciate Vero’s willingness to take them on when they did. I’m sorry the portion of county just north of IRS on FPL was annexed by IRS. But I am supremely grateful to Jay Kramer for showing his willingness to stand up for us Vero Beach residents. We will NOT be bullied by anyone.

  4. Larry, You know I like and respect you, so I hope you will not mind my pointing out that there is nothing, absolutely nothing illegal about the common and widespread practice of municipal electric utilities earning a return on investment. Rather than being paid out as dividends to investors, or as multi-million dollar bonuses to executives, as is done by investor owned utilities, the profits from public utilities are used to help pay for municipal services. Certainly when the early developers of the Shores had to decide between INVITING Vero Beach to provide utilities to their new community, or asking their well-to-do home buyers to relieve themselves in outhouses and use kerosine lanterns to light their homes, they wisely chose to ask Vero Beach for help. If you now want to “be let go,” then come up with enough money to keep from hurting everyone else in the process. Come up with $42.5 million.

  5. First FPL offered Vero $13,000,000 to buy Vero Electric, a truly ridiculous figure. Did they really think it would close the deal? Only a fool would back that deal ,but some did. Raising the amount to $30,000,000 is another insult to to city and all Vero Electric customers inside and outside the city . Let them come up with $42.5 million which experts have valued it at. Anyone who doesn’t see the heavy political hand of FPL in giving a Aug.25th ultimatum is blind . Rule # one,” Never give in to a bully” Rule # two, Protect all Vero ratepayers now and for the next 50 years” There is absolutely no reason why Vero customers should subsidize Indian River shores or any other entity.

  6. Larry, Larry, Larry……there are a lot of things in Vero Beach that citizens of Indian River Shores enjoy paid by us. I heard that your Mayor even uses our dog park!

  7. FPL’s ultimatum means nothing. As far as I am concerned this is just another political stunt by FPL and certain politicians.

  8. John, Interestingly, FPL’s $30 million offer includes $3 million – just $3 million – from the Town of Indian River Shores. Based on persistant claims made by Shores’ consultants and their legal team, it would appear the Town will save $2 million a year switching to FPL. If the potential savings to the Town’s residents are truly that great, they surely they can afford to kick in more than $3 million total to help make the deal happen. After all, $3 million is chump change compared to how much that crowd was willing to spend to renovate the John’s Island Club.

  9. Mark, Let Indian River Shores kick in the difference between $30 million dollars, that is on the table now,and the $42 million needed to close the deal. By saving $2 million a year the Shores will be free and clear in just 6 years. Of course, there are contingency problems that must be overcome to complete the sale.

  10. Dearest friends, how amazing is it that money and electricity divide us. Yet as residents we are all caring and friends, nothing will stop that! I do hope that this issue is resolved, and I do believe that FP&L should be the one to do that, let them come up with the difference in price, they are getting a fabulous deal and everyone will be happy. I do hope my immediate neighbors also see it that way and hold no grudges when it comes to the election for County Commissioner. It has cost me a lot of money these years for electricity, however it went to benefit the City and not some stupid project as a train that does not even stop here. A toast to my friends in the City, FP&L, you are the winner, step up to the plate and make everyone happy!

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