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Michael P. Bist <br />Garvin B. Bowden** <br />Benjamin B. Bush <br />David S. Dee <br />Erin W. Duncan <br />Charles R. Gardner <br />John T. LaVia, III <br />Telephone <br />850-385-0070 <br />Gardner, Bist, Wiener, <br />Bowden, Bush, Dee, <br />LaVia & Wright, P.A. <br />ATTORNEYS AT LAW <br />1300 Thomaswood Drive <br />Tallahassee, Florida 32308 <br />www.gbwlegal.com <br />Bruce I. Wiener** <br />Wendy Russell Wiener <br />Bedford Wilder <br />Robert Scheffel 'Scher' <br />Facsimile <br />850-385-5416 *"Board Certified Real Estate Lawyer <br />MEMORANDUM <br />October 20, 2014 <br />TO: JAMES R. O'CONNOR, CITY MANAGER <br />WAYNE R. COMENT, CITY ATTORN <br />FROM: ROBERT SCHEFFEL WRIGHT <br />SUBJECT: STATUS OF VERO BEACH •'TE REDi"TION EFFORTS <br />This memorandum summarizes the status of our ongoing efforts to <br />identify and implement rate reduction measures for all City of Vero <br />Beach electric customers. The memo proceeds with a summary, <br />including the status of our discussions with Orlando Utilities <br />Commission ("OUC") for revised pricing under the City's 2008 Power <br />Purchase Agreement ("PPA") with OUC, and then continues with a <br />discussion of additional measures, including potential amounts of <br />savings and timing considerations. <br />Summary <br />In summary, OUC senior management have agreed to recommend to <br />the OUC Board reductions in the capacity payments under the 2008 PPA <br />between OUC and the City by approximately $7 million per year for <br />the first three years following implementation of the revised PPA. <br />Part of the revised arrangement includes the City purchasing peaking <br />capacity from OUC for the remainder of the PPA term, which would <br />enable the City to retire the City Power Plant. Together with <br />additional savings that would be realized through reduced costs of <br />compliance with North American Electric Reliability Corporation <br />("NERC") regulatory requirements and the corresponding reduction in <br />the general fund transfer from electric rates (assuming that the <br />transfer is re -set to be 6 percent of the new, lower revenues), <br />these savings would - assuming that all other things remain equal <br />and that they can be implemented promptly - enable the City to <br />