Regulators Sign Off on FPL Utility Deal
State regulators cleared the way for Florida Power & Light to finalize a long-discussed deal to buy the city of Vero Beach’s electric utility and add about 35,000 customers in Indian River County.
With approvals from the state Public Service Commission, FPL plans to close the $185 million deal by the end of the year and, after closure, immediately start serving the new customers, said Sarah Gatewood, a spokeswoman for the utility.
Utility service has long been a heavily debated issue in Indian River County, with the Vero Beach utility also serving some unincorporated areas of the county and part of the town of Indian River Shores. FPL serves other areas of the county.
The Public Service Commission on Tuesday approved ending what is known as a “territorial agreement,” which has divvied up the county between the city utility and FPL. The commission also approved FPL being able to charge its rates to the customers absorbed from the city utility — a move that regulators and FPL say will mean lower rates for those customers.
Commissioner Julie Brown pointed to a “voluminous” amount of benefits to the public, FPL customers and the city and said the plan will remove the “longstanding disenfranchisement of those outside the city limits.” Current Vero Beach residential customers who use 1,000 kilowatt hours of electricity a month — a common benchmark — will see their bills drop from $126.10 a month to $99.37, according to the commission.
“I’m glad that we could finally bring some closure here to the issue before us before the end of the year,” Brown said. “Obviously, there are plenty of public benefits here.”
Perhaps the most-controversial issue before the commission was FPL’s request for approval of a $114 million “acquisition adjustment,” which represents the difference between the $185 million purchase price and the lower value of the city assets FPL is buying. The Public Service Commission approved FPL’s request, which is expected to lead to the $114 million being built into the rates that FPL’s overall customers will pay in the future.
The acquisition adjustment was opposed by the state Office of Public Counsel, which represents consumers in utility issues. While the office did not oppose the purchase of the Vero Beach utility, Public Counsel J.R. Kelly said FPL could have moved forward with the deal without the adjustment.
But Gatewood said FPL’s current customers will ultimately see an estimated $130 million in savings from the deal. At least in part, that is because bringing in the 35,000 additional customers will help spread costs, she said.
Also, a Public Service Commission staff analysis indicated the $114 million will have minimal impacts on the monthly bills of FPL customers. FPL is operating under a four-year rate settlement scheduled to last through 2020, and the $114 million would come into play the next time the utility asks the Public Service Commission to approve new base rates.
Reposted with permission from The News Service of Florida