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Now browsing: Hometown News > News > Volusia County

South Daytona, FPL debate electric referendum
Rating: 2.5 / 5 (22 votes)  
Posted: 2012 Oct 26 - 00:14



By Michael Salerno

For Hometown News



SOUTH DAYTONA - A recent debate forum didn't pit Democrat versus Republican, instead it was city versus electric company.

The League of Women Voters organized an informational forum where Brandon Young, a city councilman, and Pamela Rauch, Florida Power & Light's vice president of development and external affairs, debated their views on the city's proposed $12.1 million purchase of FPL's electrical distribution system, an issue that will go before South Daytona voters in a Nov. 6 referendum.

Mr. Young expressed the city's position that a municipally run electric system would keep profits in the community while matching or beating FPL's rates and local control would result in faster responses to power outages after a storm. Ms. Rauch countered a city takeover of the utility would be a "big risk" that could adversely affect electric rates and reliability.

Mr. Young summarized his view by saying the City Council believed exercising their right to purchase FPL's electric utility, which was approved 4-1 in July 2011, was a sound business decision.

"I believe the industry experts who say this purchase is a great deal for the city, and that it will be profitable," Mr. Young said. "... And I believe FPL has established just how valuable this system is by the very fact that they've spent millions trying to keep it and more than $250,000 (in contributions to a political action committee) trying to influence your votes."

City leaders had the legal authority to decide whether to buy the system or not because of a 1982 vote that delegated FPL franchise renewal decisions to the city council instead of by referendum, he said.

Ms. Rauch said FPL has a proven track record of low bills, high reliability and quality customer service, which she believes could be lost with a transition to city electric.

"When you go to the polls on Nov. 6, consider that currently you enjoy the lowest rates in the state, the highest reliability in the state (and) award winning customer service that has been ranked No. 1 in the nation for eight years," Ms. Rauch said, "and that the city is basing (the utility purchase) on some assumptions that are not complete and accurate."

During the forum, Mr. Young and Ms. Rauch discussed what the impacts of a "yes" or "no" vote on the referendum would have on citizens, as well as their visions for the city's electric system, what protections customers would have from arbitrary rate increases, and if either side would seek to recover costs associated with legal action on the purchase.

City leaders first became interested in buying FPL's electric utility in 2007 when their franchise agreement was up for renewal. The 2008 contract proposed by FPL removed what city leaders considered valuable purchase language, leading them to research the feasibility of buying the system.

Mr. Young said FPL never offered the city any compensation for removing the old buyout language.

"If you're going to give up something, give something for it," he said.

If the purchase goes forward, Ms. Rauch said, "hurdles" would still remain before the city-run system goes live.

"There are many agreements that would have to be negotiated, such as purchase and sale agreements, transmission, a wholesale power agreement," she said. "There will be a lot of steps post-election, one way or the other."

Mr. Young said the city has secured financing for the utility - a $22 million line of credit from Fifth Third Bank, approved by city leaders in December 2011 - adding he hoped a yes vote would mean the city could move forward with the utility purchase without further legal wrangling, such as the debate over whether "stranded costs" associated with lost future profits would be included in the city's cost to buy the system.

In his closing statements, Mr. Young said a yes vote supporting the city's purchase would mean local control of the electric system and its profits.

"Trust in your neighbors who are elected officials, department heads and employees of your local government," Mr. Young said, "and not Tallahassee-appointed Public Service Commission members hundreds of miles away and FPL executives in South Florida."

Ms. Rauch, urging for a no vote, questioned the city's financial projections and encouraged the voting public to consider FPL's track record when deciding whether a city-owned utility is a good idea.

"Rates, we believe, will go up (if the city buys the utility)," she said. "We believe reliability will be compromised. Is this a risk you're willing to take?"

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