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****PRELIMINARY AND TENTATIVE FINDINGS****
<br />pay operating, debt service, and other specified costs. The Board and the Executive Committee are responsible for
<br />approving the rate structures for the non -ARP and ARP projects, respectively.
<br />The majority of financial activity occurs in the ARP, in which the FMPA is responsible for providing all electricity
<br />needs for the ARP members that are not provided by other FMPA projects. In contrast, the other projects have less
<br />financial activity, as these projects represent minority ownership in joint electricity projects with other power
<br />providers. Revenues and expenses for the various projects for the 2012-13 fiscal year, the most recent audited
<br />information available as of December 2014, were as noted in Table 2 (amounts reported in thousands):
<br />Table 2
<br />Description
<br />All St. Lucie Stanton Stanton II Tri -City Agency
<br />Requirements Project Project Project Project Fund (1)
<br />Project
<br />Operating Revenue $ 481,573 $ 46,230 $ 23,260 $ 51,003 $ 9,122 $ 12,531
<br />Operating Expenses 431,660 44,771 16,539 36,064 6,477 12,718
<br />Nonoperating Net Expense 8,276 11,277 3,102 7,342 1,429 11
<br />Note (1): The Agency Fund is not associated with a particular project railer, it accounts for general operations benefiting all
<br />projects.
<br />Source: 17VMP:1 2012-13 fiscal year audited financial statements
<br />FINDINGS AND RECOMMENDATIONS
<br />The FMPA was created pursuant to interlocal agreements among several municipalities. Although the FMPA is a
<br />governmental entity, many of the laws applicable to local governments, including municipalities, do not apply to the
<br />FMPA. Further, unlike investor owned utilities (IOUs), the FMPA is not subject to any rate -setting authority by the
<br />Florida Public Service Commission, which is consistent with JAAs in other states. As noted in the Background
<br />section, oversight of the FMPA's activities is provided by the Board composed of member municipalities for
<br />non -ARP projects and by an Executive Committee for the ARP project.
<br />Table No. 3 shows comparative monthly residential service bills for the 2013 calendar year for IOUs, non-FMPA
<br />member municipal electrical utilities, FMPA ARP members, and FMPA non -ARP members. The FMPA ARP
<br />members' weighted average monthly bills are greater than the weighted average IOU bills and weighted average
<br />non-FMPA member municipal electric utilities' monthly bills by $7.12 (6 percent), and $4.09 (3 percent), respectively.
<br />Additionally, the weighted average bill for an FMPA ARP member is higher than the weighted average bill for an
<br />FMPA non -ARP member by $4.81, or 4 percent. There are multiple factors that impact FMPA ARP members'
<br />residential rates, some of which are not attributable to FMPA, including:
<br />Y Several ARP members also participate in non -ARP projects. Consequently, the ARP member receives power
<br />from multiple sources at differing wholesale rates, which are factored into customer billings.
<br />Y ARP members add additional costs, such as electrical service costs associated with delivery of power, to
<br />customer billings.
<br />Y According to Moody's Investors Service, "Many FMPA member electric utilities have sizable transfers of
<br />electric fund revenues to their municipal General Funds which can sometimes contribute to above average
<br />retail rates for some members."
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