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Mediator Alvarez brought up the rates and felt the electric generation mix was dis- <br /> proportionate. He explained the rates were dependent on the prices of oil, coal, gas, or nuclear. <br /> It was one of the reasons for the difference in rates between the City and FPL. Attorney Wright <br /> replied in the affirmative and commented the City was coal heavy, whereas FPL rates were gas <br /> driven. <br /> No Representation of the Town or County Citizens in the Utility Decision Making <br /> Commissioner O'Bryan brought up the fact that there was no representation from the <br /> Town or County citizens and discussed the transfers between the electric utility and the City's <br /> general fund. He brought up the Return on Investment (ROI) and noted FPL's ROI goes to the <br /> shareholders. They were the ones who put up the money to buy the stocks and invest the capital, <br /> whereas with the City, it was the customers of the electric utility making the investment. He <br /> continued stating that when FMPA passed on their excessive fuel costs to the City, the City did <br /> not raise taxes to pay for it; they raised the electric rates. It was the County's contention that <br /> besides the issue of whether a government agency should be making a ROI, they felt the ROI <br /> should go back to customers of the electric utility. He concluded that the County's position to <br /> take the 60% paid for by citizens outside the city limits, and to use that to subsidize the taxes for <br /> the city residents was immoral and wrong. He stated the 60% included those residents in the <br /> County and the Town, who could not vote in the City elections or have a voice on how the <br /> money was spent. <br /> Mediator Alvarez wondered whether it would be in the interest of the County and Town <br /> to have a governance of the utility to be more representative of the citizens they serve, if the City <br /> electric rates were the same as FPL rates (long term) today. <br /> Attorney May said his research showed the percentage of non-resident customers today, <br /> with over 60% of the customers being outside the municipal limits, and currently disenfranchised <br /> with no say on utilities management, was unprecedented. He felt if a utility authority was <br /> created, it would have control over the utilities finances, operations, and rate setting, including <br /> whether to continue or discontinue the utility revenue transfer. <br /> Commissioner O'Bryan indicated the County recommendation was a full sale of the <br /> City's utilities to FPL to get out from under the FMPA. He said if the County signed a 30-year <br /> agreement with the City, and they agreed to charge the County residents a rate equal to FPL, he <br /> felt it would be fair enough. <br /> Mayor Winger of the City, pointed out FPL was currently seeking $750 million to add to <br /> the rates in Oklahoma, as well as adding hundreds of millions of dollars to bills across their <br /> service area allowed by public law for engineering of nuclear reactors at Turkey Point. He <br /> indicated under Florida Law, a fair amount of engineering development of public utilities was <br /> actually paid by the ratepayers. <br /> Town of Indian River Shores - City of Vero Beach - Indian River County <br /> Electric Utilities Mediation Page 5 <br /> December 17, 2014 <br />