Attorney: Deal can happen
By Jessica Tuggle
VERO BEACH - Transactional attorneys representing Vero Beach in selling its electric utility are confident a sale will go through by 2014.
One of the biggest challenges for the attorneys was finding an agreeable way to exit the city's current wholesale power contracts. Based on statements to the city council during the Aug. 16 meeting, that challenge has been met.
Attorney John Igoe told the council he was pleased to bring them some good news, including a purchase price increase from Florida Power & Light from $100 million to $115 million; voluntary termination of the wholesale power supply agreement between the city and the Orlando Utilities Commission with a $20 million payment from the city; an agreement that FP&L will purchase power from the Orlando Utilities Commission for the first three years after the sale is completed and permanently assigning the Vero Beach-owned Florida Municipal Power Agency entitlements to the Orlando Utilities Commission.
"This is really good news," Mr. Igoe said.
Councilman Dick Winger said the job seemed to be of Mount Everest proportions and he and other members of the council commended the attorneys on their success.
According to the term sheet Mr. Igoe presented, the purchase offer from FP&L is approximately $179.6 million. That amount is based on an assumption of pension liability of $14.4 million, $7.7 million in transmission upgrades, $7.8 million in substation relocation, $4.7 million for to decommission the power plant and $30 million for three-years of power from the Orlando Utilities Commission.
The city would pay a total of $54 million to the Orlando Utilities Commission, to terminate the wholesale power supply agreement and permanently assign the Florida Municipal Power Agency, which provides coal and nuclear power, to the Orlando Utilities Commission.
The city also has about $46 million in debt on the utility system. Mr. Igoe said the city's payout of about $100 million will be less than the amount FP&L has offered, so it will make about $15 million in the whole deal.
Mr. Igoe said the next step is to take the terms he outlined for the council into a formal memorandum of understanding, which would be presented to the council and the city utilities commission before the council would be asked to formally approve the terms.
Council members thanked Mr. Igoe for his diligent work and said they would direct city staff to crunch some numbers to provide a clearer picture of how selling the utility would affect the city's revenue and budget.
For more information, visit www.covb.org.