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Large power users pose real threat to Vero Electric deal


Somebody in charge of the Vero Beach electric sale should have known the $185 million deal was on a collision course with a coalition of Florida Power & Light’s largest commercial customers, but Vero’s 34,000 unsuspecting ratepayers had no clue the group wielding power to potentially block them from getting low FPL rates come October even existed until last week.

The Florida Industrial Power Users Group (or FIPUG) objected to the Florida Public Service Commission’s proposed approval of the Vero deal on the basis it would unfairly take money out of FIPUG members’ pockets.

With hearings on the group’s complaint scheduled for Oct. 10 and 11 in Tallahassee, the hoped-for Oct. 1 sale closing date is out the window unless the FIPUG challenge, plus three less credible objections filed by local opponents to the sale, are dropped.

“The reason we are pursuing this is because we are concerned about FPL ratepayers and FIPUG members being asked to pay for an acquisition adjustment of $200 million,” Moyle said, citing figures in the PSC’s staff report alleging FPL is paying too much for the Vero system.

FPL contends the deal is a major win-win for everyone and that it was “carefully crafted” to not negatively impact customers across the state.

According to extensive public record, FIPUG challenges FPL and other investor-owned utilities just about every time they mount a rate case or ask the Florida Public Service Commission to allow them to book the costs of a new power plant, solar facility or technology and wrap that investment into the rates of FPL’s 4.9 million customers.

FIPUG acts very publicly – challenging decisions via the Florida Public Service Commission’s objection processes and also appealing matters directly to the Florida Supreme Court – but internally, FIPUG operates largely in the shadows. Its member list is secret, and its finances are not subject to public record requests. Its board of directors is not known, if it even has a board of directors.

Attorney Jon C. Moyle Jr. is the primary face of FIPUG, and he denied Vero Beach 32963’s request Monday for a member list. Moyle said FIPUG’s private internal business is private, period. “We have a practice of not naming members,” he said. When asked to characterize his membership by industry, he said only, “We represent large users of electric that typically use energy on a 24/7 basis, some 365 days a year.”

A Tallahassee native and University of Florida law school graduate practicing utilities and government law for 31 years, Moyle took over for FIPUG’s founder, the late Tampa-based attorney John McWhirter, who, after operating a successful law practice in Tallahassee and elsewhere, established FIPUG to advocate for the economic interests of Florida’s largest commercial electric consumers.

Moyle is a registered lobbyist with the State of Florida, and records show that, in addition to FIPUG, he represents the Florida Inland Navigation District, Waste Management, the Florida State University Board of Directors, Woodbury Health Products, Wheelabrator Technologies and the Children’s Services Council of Palm Beach County.

Moyle, who has served as chief litigator for FIPUG for more than a decade, said the clout of his FIPUG members rarely comes under scrutiny when he files protests of proposed rate hikes or regulatory actions. Though there is no public list of members, he said, the courts and regulatory agencies know FIPUG’s history and who he represents.

“Utilities typically do not challenge who our members are, because over the years they have an understanding that we represent large users of electricity,” Moyle said.

Sometimes FIPUG loses and gets its objections flat-out denied, but sometimes Moyle and other industry groups or large commercial customers are able to eke out last-minute concessions from FPL, Tampa Electric or other companies.

The group, shadowy or not, seems to be an ever-present fly in FPL’s ointment, but why would huge companies like paper and lumber mills, cement manufacturers, chemical companies, retail chains and soft drink giants be interested in the Vero electric sale? It’s all about the precedent, according to Moyle.

“We doubt that this is the last time a muni (municipal-owned electric utility) will be purchased by an investor-owned utility,” Moyle said. “We are focused on the merits of the case regarding the acquisition adjustment; that the acquisition adjustment is something that should be fairly considered.”

Moyle takes the PSC to task for not delving into an evidentiary hearing and calling upon experts to testify in defense of FPL’s numbers. FPL claims that the addition of Vero’s customers to its system will yield net-positive financial benefits in the long run for its existing base of ratepayers. FIPUG contends this is not the case.

The Florida Office of Public Counsel also criticized FPL’s numbers, as did the PSC staff and Chairman Art Graham, but a majority of the five-person panel sided with FPL.

On June 5, the PSC voted 3-2 to approve the Vero electric sale, complete with a $116.2 million cost adjustment above the book value of the utility under the premise that the $185 million purchase price constitutes “extraordinary circumstances” due to Vero’s 61 percent of customers outside the city limits and Vero’s neighbors’ morass of legal and regulatory challenges prompted by rate disparities of more than 30 percent.

The PSC voted to allow FPL to absorb that adjustment without hitting Vero customers with a surcharge.  Moyle claims his members who pay FPL commercial and demand rates will bear the brunt of that $116.2 million, plus the loss of return on that investment, the full impact on FPL’s base totaling more than $200 million.

Indian River Shores Mayor Tom Slater expressed his frustration with the FIPUG challenge, saying he felt they are trying to prevent other large users of power in Vero from having the same playing field. “They’ve been enjoying low rates all along, but they don’t want anyone else to get those rates,” Slater said

Slater pointed out that Indian River Medical Center alone is expected to save $700,000 per year on FPL after the deal closes. Slater suggested that if the public knew which companies belong to FIPUG, the pressure of public opinion might be brought to bear on those members and if they knew how much they were potentially hurting the larger Vero Beach community, they might be persuaded to yank the objection so the sale could proceed.

As speculation swirled last week about which if any local corporations might belong to FIPUG, FPL spokesperson Sarah Gatewood said FPL had been told that Piper Aircraft was a member, but Piper officials flatly denied that.

“To be clear, Piper Aircraft is not affiliated with the Florida Industrial Power Users Group and does not support their objectives in seeking to block this sale.  Piper believes that the advantages provided by FPL should be made available to all of those within Indian River County and not solely those represented by the Florida Industrial Power Users Group,” said Piper Senior Director of Marketing and Communications Jacqueline Carlon, who underscored Piper’s pro-sale position.

“Piper Aircraft is a proud manufacturer of seven different models of aircraft and an employer of nearly 1,000 individuals in Indian River County, Florida. As such, operating costs are a key focus for our company and Piper Aircraft supports the sale of Vero Beach Utilities to FPL,” Carlon said.

The next step in the PSC process is a status hearing scheduled for Oct. 3 to check on various deadlines objecting parties and FPL must meet to keep the hearing on track to begin Oct. 10.