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FMPA vote letting Vero exit statewide power co-op imminent


By the time Vero Beach 32963 hits mailboxes this week, the Florida Municipal Power Agency should have already voted to allow the City of Vero Beach to exit the statewide electric co-op – should being the operative word.

The vote was scheduled to happen last Thursday morning (March 15), and a motion to approve the long-awaited escape had been made and seconded, but then electric co-op members got nervous about not having enough time to review four complex resolutions presented to them only hours prior to the meeting in Orlando.

So the critical vote needed before the city closes on its $185 million sale of the Vero Beach electric utility to Florida Power & Light was tabled for one week.

The 19 member cities that have ownership stakes in FMPA’s power projects, along with Vero Beach, have already approved the Vero sale and exit from the electric business in concept. Over the past five months, FMPA officials traveled the state educating city officials about the details of the exit agreement and each governing board has given the formal go-ahead for that city’s designee to approve the deal.

Vero must exit its membership in the co-op and its long-term legal entanglements in order to close the sale with FPL. In exchange for letting Vero out, the FMPA is set to receive $108 million from the utility sale proceeds. FMPA officials have said the organization will use the cash infusion to get out of its last remaining interest-rate swaps, which got the co-op into hot water for risky investment practices during an operational audit published by the Florida Auditor General’s Office in January 2015.

Vero and a handful of allies voted to go forward with approving the resolutions last Thursday, but about three-quarters of the members voted to give board members more time to dig into the documents and further discuss the four resolutions this past Wednesday, March 21, in a previously scheduled telephone-only board meeting. FMPA board members routinely participate and vote by telephone, since the 31 member cities are strewn across the state from Key West to the Panhandle.

One ripple effect of FMPA tabling the vote is that a meeting with FPL, FMPA and Vero’s transactional attorney, Nat Doliner, that was scheduled for this past Tuesday during the City Council meeting, won’t happen until later.

But the delay shouldn’t move the target closing date of Oct. 1 off track, City Manager Jim O’Connor said.

Last week a somewhat misleading possible closing date of July 1 appeared on a timeline put out by FMPA, but that date simply reflects a range put forth by FPL to determine how a swifter conclusion might affect the cash needed to satisfy commitments to all parties at closing.

O’Connor also said he was pleased the transaction was tentatively set to be heard before the Florida Public Service Commission in late April. “That’s good; that means they completed the audit they were conducting and that it went well,” he said.

The PSC must vote to approve two matters related to the Vero electric sale. The Commission’s primary job is to ensure the transaction is equitable – not only to Vero’s customers, who will after the closing be charged lower FPL rates for the electricity they use, but also to FPL’s existing 4.9 million customers across Florida.

PSC approval of the acquisition means that the sale price of $185 million, plus other consideration, will not raise the rates of FPL’s customer base.

The second matter the PSC must vote on is to redraw the electric territory maps to connect Vero Beach proper, the southern portion of the Town of Indian River Shores and the pockets of unincorporated Indian River County now served by Vero Electric with FPL’s existing territory.