Vero Beach voters OK FPL deal, but hurdles remain

VERO BEACH, Fla. - VERO BEACH — Proponents of the sale of the city's electric system to Florida Power & Light Co. cleared a major hurdle Tuesday night as voters gave their OK to the deal, but still have a lot of steps to be taken before the transaction can be closed.

Voters approved the sale of the electric system by a vote of 2,339 to 1,330, close to the results of a 2011 referendum on leasing the power plant land to FPL. The results include absentee and provisional ballots.

"Absolutely wonderful, couldn't be better news," said Vero Beach Mayor Craig Fletcher of the results.

FPL representatives also were happy with the results.

"We're very appreciative to have the support of the Vero Beach community, and we look forward to working together to complete the sale," said FPL spokeswoman Sarah Gatewood.

Gatewood and City Manager Jim O'Connor said the goal is still to close the deal by the first quarter of 2014.

"We still have some hurdles, but that is our goal," said O'Connor. "We have to set goals for ourselves."

Gatewood said that is the company's target date as well so "we can bring lower bills to Vero Beach."

The city's electric rates currently are about 38 percent higher than FPL's rates and FPL said the sale could result in savings of about $23 million annually to customers of the city's electric system.

The sale of the system, however, will mean the city will have to find to way make due without the $7.3 million the utility system provides to fund other operations.

Some of this shortfall can be made up from money the city makes off the sale, cuts in expenses and implementation of a franchise fee as well as a utility tax on city electric users.

Fletcher believes the city can make the necessary adjustments in the budget to avoid a tax increase.

He said there may be some shortfall the first year, but the situation will improve in the following years.

Former Vero Beach Attorney Charles Vitunac, who had formed a political action committee campaigning against passage of the referendum, said he had hoped people would see through the "misinformation" that was put out by the supporters.

He said voters had the information that his group put out in their advertisements and "I guess they didn't buy it. They'll have to live with the results of it."

Vitunac contends residents could have to live with high electric rates for the next four years while the deal plays itself out.

Fletcher said the opposition's "scare tactics" were rejected by voters and resulted in bringing more people out to support the sale.

Steve Faherty, who along with Glenn Heran was at the forefront of efforts to get the city out of the electric business, described the results as "great news" and said it really supports the results of the 2011 referendum as well as city council elections in which those supporting a sale have been elected.

"It's hard to believe that Glenn and I are going on our sixth year on this, but it looks like the end is in sight," said Faherty, who doesn't think city taxes will have to be raised as a result of the sale.

The most daunting task now appears to be the resolution of the city's current wholesale power contracts that they are involved with through the Florida Municipal Power Agency. Unless the city can come to some agreement with the other municipalities belonging to the agency and bond holders, there is a chance the sale to FPL won't be closed until Oct. 1, 2016, or later.

Fletcher said he is about 70 percent sure the situation with the agency can be resolved.

Vero Beach has reached an agreement with Orlando Utilities Commission to take over the city's obligations under the FMPA contracts, but the power agency has yet to sign off on that deal.

The next step in the process is to try to convince the agency that the transaction with Orlando Utilities will not endanger the tax-exempt bonds used to purchase interest in the Stanton I and II coal-powered plants and the St. Lucie Nuclear Power Plant.

Gatewood also notes that other regulatory approvals have to be obtained from other state and federal agencies as well, including the Florida Public Service Commission and the Federal Energy Regulatory Commission.

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