Has Howle given up on sale of Vero Electric?
“Echoing Brunjes, Moss, Sykes and Howle all said a sale of Vero Beach’s Shores customers is now a vital step toward a sale of the full system, though no one, including Brunjes, explained how a partial sale would clear the way for a sale of the remainder of Vero Electric. Howle’s support for a partial sale suggests he may no longer believe in the 5-point plan he laid out last year.”
Joining Vero Beach City Councilman Harry Howle in a new majority, Laura Moss and Lange Sykes, whose campaigns were heavily backed by Indian River Shores residents and by Florida Power and Light, took their place on the Vero Beach City Council this week. Together, Howle, Moss and Sykes acted quickly to re-start negotiations on a sale of Vero Electric’s Indian River Shores customers to FPL.
The new council majority also voted yesterday to fire the City’s special utility council, Schef Wright. Wright has successfully represented the City before the Florida Pubic Service Commission and the Florida Supreme Court in cases brought by Indian River Shores and by the Indian River County Commission. Wright also led the negotiations on a revised wholesale power agreement with the Orlando Utilities Commission.
When first hired by the City, Wright received a letter of congratulations from FPL’s lead counsel. Now Moss, Sykes and Howle argue he is somehow in collaboration with the Florida Municipal Power Agency to block the sale of Vero Electric. Throughout his time in working for the City, Wright has continued discussions with FPL on how to move the sale forward, and all along FPL officials have said they have no new ideas for how to resolve Vero Beach’s contract obligations with the FMPA and its bondholders.
In a letter dated Nov. 18, Wright wrote, “…the sale process was, in practical terms, suspended when the OUC and the FMPA were unable to agree on terms that would satisfy their respective bond covenants and bond counsel.”
Several months ago, FPL offered $13 million, and later $30 million, for Vero Electric’s Shores customers. A team of five independent utility experts, hired by the City and led by Wright, calculated that carving off the City’s Shores customers and downsizing the system would require a sale price of $47 million, without the move leading to higher electric rates and higher taxes. By a vote of 3-2, the previous Council rejected FPL’s $30 million offer but let it be known the City would consider an offer at $47 million.
With former Vice Mayor Randy Old’s loss to Lange Sykes by 48 votes, the balance of power on the Council has shifted to a new majority sympathetic with—if not beholden to—Shores interests. FPL spokeswoman, Amy Brunjes, whose company contributed $55,000 to a political action committee that supported Moss and Sykes, was at yesterday’s Council meeting. Brunjes, who is married to Press Journal publisher, Bob Brunjes, let it be known the utility giant remains interested in acquiring Vero Electric’s 3500 Shores customers “in the context of a full sale.”
Echoing Brunjes, Moss, Sykes and Howle all said a sale of Vero Beach’s Shores customers is now a vital step toward a sale of the full system, though no one, including Brunjes, explained how a partial sale would clear the way for a sale of the remainder of Vero Electric. Howle’s support for a partial sale suggests he may no longer believe in the 5-point plan he laid out last year.
Finance Commission Chairman Peter Gorry and others spoke at yesterday’s meeting, arguing a sale to the Shores will make a sale of the remainder of the system less valuable and could well disadvantage the remaining customers and ratepayers. Gorry cautioned that if the Council accepts too low a price for a partial sale, and if existing contractual obligations which have so far blocked the sale of the full system cannot be resolved, the remaining customers of Vero Electric could be stuck paying higher rates.
Howle, in his campaign last year, assured voters the only thing standing in the way of a sale of the full system to FPL was Council resolve. Now Howle has the votes he has said were needed, but for some reason he now claims to believe a partial sale is an essential first step toward a full sale. As Gorry and others said, though, a sale of the full system is by no means assured, and this move, though it will benefit the Shores, may ultimately cost everyone else.
Citing the City’s existing bond covenants, Vero Beach resident and former bond trader, Steve McDonald, raised serious questions about whether a partial sale would put the City’s credit rating in jeopardy. McDonald also argued that the bond covenants would require any sale proceeds to remain in the electric utility. They could not be used, he said, to pay down pension liabilities, a proposal made by Shores Mayor Brian Barefoot.
If McDonald is correct about the legal restrictions on how proceeds from a partial sale can be used, then the Shores-FPL funded PAC that supported Moss and Sykes did indeed mislead voters into believing a the proposed $30 million deal could benefit City residents in any number of other ways.
After several hours of discussion and debate, Wright was fired, and FPL was invited to submit a new offer for a partial sale.