VERO BEACH, Fla. - The City Council took another step Tuesday toward a potential sale of the city's electric system.
The council unanimously voted to approve a modified letter of intent from Florida Power & Light that allows for negotiations to begin for the possible sale of the city's system to the private utility.
The modification will specify that all terms involved in a potential deal can be accepted, rejected or negotiated and remove a specific figure that FPL would pay for the utility. The original document had included a price of up to $100 million in cash for the utility. Some people have said they believe the system is worth more than that..
The modified letter of intent will instead refer to a mutually agreed-upon price.
"We look forward to starting negotiations," said FPL External Affairs Manager Amy Brunjes.
FPL is expected to deliver the modified letter of intent to city officials Friday for their signature.
The negotiation process still has to be established and it could take several months to approve any deal that might be reached.
A purchase would require approvals from the Federal Enegy Regulatory Commission and the Federal Trade Commission and the U.S. Department of Justice would also review any deal. The Florida Public Service Commission would have to approve a new territorial agreement and the rates. FPL officials have said they could provide city customers with FPL rates under the proposed offer where they would pay the city about $100 million in cash.
. A referendum vote also may be required regarding FPL's use of the city's current power plant.
City officials will also have to try to reach some resolution with Florida Municipal Power Agency and Orlando Utilities Commission on wholesale power contracts. FPL officials said they can not be directly involved in such negotiations on these issues, although they are willing to provide what support they can.
FPL is proposing to the retention of city electric employees for two years and to assume their pension liability.
In addition to lower rates, FPL officials also pointed to energy-saving programs and rebates that can further lower customers' bills.
The reduced rates will save city electric customers $11 million in the first year alone, with $5 million of that savings enjoyed by customers within the city's corporate limits, according to FPL officials. In addition, FPL said it would pay more than $1.7 million in additional taxes to local government entities within the city's service territory.
The city has hired its own consultants to value its system as well as determine the impact of a potential deal with FPL. One of the areas to be examined is the potential impact on property taxes if the city no longer receives its annual $5.6 million transfer into the general fund.
The City Council decided to hold off on the letter of intent Monday while awaiting for a review by its consultants in conjunction with Acting City Attorney Wayne Coment. Several revisions to the document were proposed by the consultants and Coment. Vice Mayor Pilar Turner was upset that the proposed revisions to the document were not approved by the City Council and some of them seemed like a response to a hostile takeover.
Coment indicated he was trying to protect the city's interest regarding his suggested revisions. He also denied that city staff was attempting to hold things up.
FPL officials indicated that some of the items were better addressed in negotiations and indicated they were not precluding anything from being discussed.
"Everything is on the table," Brunjes told the council.
Such comments apparently helped influence Councilman Craig Fletcher to change his vote on moving ahead with the letter of intent. He said his initial reaction to the letter was that some items were being excluded from discussion.
Copyright 2011 Scripps Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Latest Local News Stories