October 1, 2014

Municipal Utilities in Florida

A surge in interest for Florida's municipal utilities

For the first time since 1992, a Florida municipal utility may go into private hands. And it's not the only municipal in the state that has explored a sale.

Mike Vogel | 3/4/2013

Factors that argue against selling, say Kramer and Moline, are locking the city into FPL and giving up local control and responsiveness. (Kramer believes the utility must go, but opposes the FPL sale, saying the city should have opened bidding to a variety of potential buyers.)

Moline says Vero residents won’t get a premium for the system because by law FPL can’t distribute the cost among its other rate payers. The city also would lose $5 million in surplus revenue the municipal utility pays into the city general fund, a substantial hit in a city with only a $20.5-million budget.

Fletcher responds that $3 million of the loss will be negated by eliminating an annual $3 million pension fund payment. The remainder can be made up by budget cuts, he says. Should the cuts not be sufficient, Vero can afford higher taxes. It has a low property tax rate.

Even if voters approve, it’s unclear exactly when the deal could close. The city and FPL say the system can change hands in January. But unless Vero resolves contractual obligations to FMPA, the sale may be delayed until October 2016.

All that said, Fletcher — and even Kramer, the deal’s opponent — predict voters will vote to sell the system.

“What a great idea it is,” Fletcher says.

Tags: Energy & Utilities

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