By Michael Salerno
For Hometown News
SOUTH DAYTONA - With a majority of the voting public on its side, Florida Power & Light fought City Hall and won.
Citizens rejected the option of the city establishing a municipal electric utility, with 63 percent of voters who turned out to the polls deciding against the city operating its own electrical distribution system. Opponents of city-run electric were backed by a political action committee that received around $500,000 in funding from FPL.
The outcome now leaves city leaders forced to explore alternative options with a number of legal questions that need to be addressed.
"The next step will depend on the terms and conditions offered by FPL to renew the 30-year franchise agreement," Mayor George Locke said. "It's my hope that good faith negotiations can be accomplished with FPL."
Raymond Lawrence, chairman of the political action committee Take Back Our Power, said he hopes the outcome of the referendum means the city can work out an agreement with FPL and end the political divide in the community over the issue.
"It's time now to put all that behind us," Mr. Lawrence said. "It's a free country. We all have our opinions. We're fortunate to live in a country where we can express those opinions."
Mr. Lawrence formed Take Back Our Power last year with financial support from FPL in an attempt to get the referendum on the ballot, which first required a charter amendment referendum that was approved by the voting public in August. Throughout the year the issue has polarized the community, as both the city and FPL had been accused of misinforming the electorate.
For the last five years, city leaders evaluated the possibility of buying FPL's assets to establish their own electric utility after learning if they renewed their franchise agreement with FPL, they would lose valuable purchase language without compensation. The City Council voted 4-1 in July 2011 to exercise their purchase option and buy FPL's assets, currently valued at $12.1 million.
Pam Rauch, FPL's vice president of external affairs, did not offer a specific answer as to whether or not FPL would compensate the city for the purchase language in their 1978 franchise agreement that would be lost forever with the signing of a new 30-year contract. She did say, however, that she looks forward to negotiating "a mutually beneficial franchise agreement."
"Regardless of the negotiations on a franchise agreement, we will continue to serve our customers in South Daytona," Ms. Rauch said.
City Attorney Scott Simpson said, in his legal opinion, acquiring FPL's assets and establishing a municipal electric utility are two separate issues. While the voters disapproved of the city forming an electric utility, city leaders still have a contract in place to buy FPL's assets, equipment to operate the utility that includes meters, transmission lines and one of FPL's two substations located in the city.
"The city exercised the purchase option, so the city has a contractual obligation to buy FPL's assets, regardless what the vote of the people was," Mr. Simpson said. "If the city took ownership of FPL's assets, one of the things they could do is establish the municipal electric utility. The citizens don't want us to do that, (but) the city may have other options available. Those have not been fully explored."
City leaders spent more than $2 million in consultant and attorney fees since 2007 to explore the feasibility of a municipal electric utility. Those costs are likely to go up as the city determines what the next step is.
It's up to city council members to decide whether to explore those options, or if they should go back to the negotiating table with FPL on a new 30-year franchise agreement, Mr. Simpson said. He added it's unlikely a decision would be made immediately following the election; the council's agenda for its Tuesday meeting did not include any new business related to the electric system negotiations.
Ms. Rauch said she is "pleased" city voters voted down the formation of the municipal electric utility because it shows they trust FPL's track record for low rates and high service.
"We look forward to continuing to provide our customers with the lowest bills in the state, reliability that is among the best in the nation and award-winning customer service," Ms. Rauch said.