When changes in facts do not lead to altered opinions

Calcified minds are impervious to new information

COMMENTARY

“The difference between 30 percent and 3 percent is not a rounding error. Sykes, Solari, Gilmore, Moss, Turner, Howle and other so-called pro-sale advocates did not arrive at their exaggerated numbers by touching the wrong key on a calculator. No, theirs is an intentional effort to push for the sale by misleading the public into believing it would significantly benefit the local economy. Just as importantly, their claims of being able to find a way around the contractual obligations that have so far prevented the sale are nothing more than empty promises.”

MARK SCHUMANN

Bob Solari
Bob Solari

Testifying before the Florida Public Service Commission this week, Florida Power & Light attorney R. Wayde Litchfield said that, if approved, the FPL’s proposed $1.3 billion rate increase will bring the utility giant’s rates closer to the statewide averages.

FPL’s willingness to justify its latest rate hike request on the basis of Litchfield’s argument signals a radical departure for the company, for FPL has spent heavily on a years-long marketing, advertising and public relations campaign positioning the Juno based, investor owned utility as the lowest cost electric provider in the state.

If approved, FPL’s rate hike request will bring the company’s monthly charge for 1000 kWh to $107.29 in June 2019. Adding a 6 percent franchise fee to $107.29 yields an average monthly bill of $113.73.  If Vero Electric’s rate remain the same, (all indications are the City’s rates will continue to decline in the coming years), that would leave a FPL-Vero Electric rate differential of 3.2 percent.

For a high-volume residential user paying an average of $400 a months, a 3.2 percent differential means a higher bill  by $12 dollars a month in the hottest months.  For the average-size home, the higher rate paid to Vero Electric will come closer to $6 a months.

The fact that FPL is seeking rate increases that will eliminate any meaningful rate differential between itself and Vero Beach has not keep politicians like State House of Representatives candidate Lange Sykes, Indian River County Commission candidates Richard Gilmore and Bob Solari, Vero Beach City Council candidate Laura Moss and Council members Pilar Turner and Harry Howle from continuing speak of a rate differential of 20-30 percent.

The difference between 30 percent and 3 percent is not a rounding error. Sykes, Solari, Gilmore, Moss, Turner, Howle and other so-called pro-sale advocates did not arrive at their exaggerated numbers by touching the wrong key on a calculator. No, theirs is an intentional effort to push for the sale by misleading the public into believing it would significantly benefit the local economy. Just as importantly, their claims of being able to find a way around the contractual obligations that have so far prevented the sale are nothing more than empty promises.

Recently, Solari wrote, “…the best single thing that can be done for the economic development in Indian River County is to sell Vero Electric and get low FPL rates. The sale has been blocked by the Florida Municipal Power Agency, which sees a sale as threatening its bureaucracy and by a Vero Beach government, which is unwilling to loose the transfer of money from county residents to the City’s General Fund.”

Solari did not mention that the transfer, which comes to approximately 6 percent, is equal to the franchise fee the County Commission assesses on bills to customers of Vero Electric and FPL. He also did not bother to explain that the purchase and sale agreement between FPL and Vero Beach signed in the spring of 2013, cannot be executed because doing so would violate existing bond covenants and other contracts.

Though Solari raised selling Vero Electric as one the three most important issues facing his office, and though he claimed to be the best candidate to push the sale forward, he did not mention that in attempting to strip Vero Electric of its customers outside the City, the County Commission, at great expense to taxpayers, lost its appeal to the Florida Supreme Court.

This proposed sale of Vero Electric to FPL is a story I have followed closely for more than five years. When you know the background of a complicated story such as the proposed sale of Vero Electric, it is disappointing to see politicians twist, distort and ignore the facts, all in pursuit of votes.

 

2 comments

  1. Solari should recommend the county eliminate the 6% franchise fee if he is serious about lowering electric rates. He won’t do this . What he is doing is using the impossible sale of Vero Electric to FP&L for political purposes. Turner is worse, in fact ,because she sits on the city council ,and is privy to all the facts and sticks to her sell at any cost position. Moss is in over her head and is completely run by others. When she does not stick to her assigned script she is lost. Howle knows a full sale cannot be completed ,but boasts he can do it. He is wrong. The sell people have lost at every level . All four are in favor of the Indian River Shores sale, and don’t care what effect it will have on all Vero rate payers. This includes both city and county customers.

  2. I find it hard to believe that, even when presented with solid evidence, some will not accept that evidence, and continue barking up a wrong tree.
    The sale of Vero’s electric utility is not possible unless all commitments (bonds financed, etc.) are met. Do those seeking change even know what questions to ask? Do they know that certain bonds have been refinanced? Do they know the current financial situation?
    Jay Kramer has done yeoman’s work in bringing Vero’s electric utility customers the best possible outcome, yet making certain VB Utilities lives up to its commitments. It Matters. Vero Beach’s current contract with Orlando Utilities (a well-run and respected utility) is bringing VBU customers
    good service at very competitive rates. Thank you Jay Kramer.

    FPL seeks significant increases in its base rates – to occur over the next 3 years. In 2017 alone, under FPL’s proposal, as described before Florida’s Public Service Commission, FPL’s base rates would increase by $866 million, with additional increases the following two years.

    I think it would be wise to see where we are in three years before even proposing such drastic steps as trying to carve out territorial agreements, which are not under local control.

    Watch what you wish for.

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