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Shores moves ahead with electric lawsuit against Vero


Now that a judge has sidestepped the issue of Vero’s electric service territory and referred it to state regulators, the Town of Indian River Shores has narrowed its lawsuit against Vero Beach to two counts, with a new one focusing on the use of public rights of way by utilities.

A 20-page amended complaint filed last week by the Town of Indian River Shores also underscored the single count of the original lawsuit not dismissed in November – the count alleging that Vero has breached its current franchise agreement with the Shores by mismanaging its utility and charging unreasonable rates, with the Shores seeking monetary damages.

This count – which at some point will almost surely be tried before a jury – will force Vero city officials to prove that rates which soared to 58 percent higher than Florida Power and Light in 2009, and which still hover at close to 30 percent higher than FPL, were and are justified.

In her order refusing to dismiss this count, Judge Cynthia Cox wrote “the Town seeks an award of damages in an amount reflecting the difference between the amount the City has charged the Town and the amount the Town would have paid if such rates had been reasonable.”

Shores Town Manager Robbie Stabe said “We are glad that the Court denied the City’s motion to dismiss the Town’s claim for breach of contract, and we look forward to continuing to take whatever action is necessary to achieve rate relief for our citizens.”

This count will enable Shores’ attorneys to subpoena and depose current and former Vero city officials – both elected and paid employees – to account for the practices and power contracts that cause Vero customers to pay so much more than their neighbors on the FPL system.

Meanwhile, Shores Mayor Brian Barefoot last week explained the new count in the updated lawsuit, saying that Vero continuing to use the Shores’ rights of way and other public lands after the expiration of the franchise agreement constitutes an “unauthorized encroachment” into the Town.

Vero’s franchise agreement expires on Nov. 6, 2016, eleven months from now. Shores officials argue that, after that date, unless the parties can come to terms on a new franchise agreement, Vero has no right to operate its utility business on the Town’s public lands.

“The Town believes that it has a right under the Florida Constitution and the statutes to be protected from such unauthorized encroachments by another municipality,” Barefoot said.

“Thus, we have asked the Court to declare that our Town, rather than the City, has a right to determine how our public places are to be used, and that upon expiration of the Franchise Agreement the City must either remove its electric facilities from our public places or, provided it has the requisite legal authority, properly condemn the affected property of the Town and pay the Town just compensation,” Barefoot said.

Vero Beach City Attorney Wayne Coment says Vero’s legal team now will respond to the Shores’ amended complaint “within the 20 days after its filing as also provided by Judge Cox's order.”

Vero has retained renowned trial attorney John Frost to handle the bulk of the oral arguments, with lead utility attorney Robert Scheffel “Schef” Wright still on board to steer the more technical aspects of the case. Wright is an expert in regulatory law and routinely argues before the Florida Public Service Commission, where Cox said the Shores’ questions about where the Shores stands after the franchise expires will go next.

If the two decisions handed down in February upholding Vero’s territory and sublimating local governments’ property rights to the PSC-granted territory are any indication, the commission will likely side with Vero, necessitating an appeal to the Florida Supreme Court.

The Board of County Commissioners was set to argue its own appeal to be freed from Vero’s service territory to the Florida Supreme Court this Thursday in Tallahassee.

But even after the matter is appealed, sources close to the case say, the Florida Supreme Court could end up remanding the whole issue back to a local Circuit Court judge – in other words, right back where the Shores started in July 2014.

Short of being able to negotiate a settlement with the newly constituted Vero City Council, it now seems a near-impossibility that the Shores will have a clear path to contract with FPL as a service provider when its franchise expires in November 2016.