Kramer describes FPL’s offer as an “ultimatum”
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.