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Carlos Alvarez,Esq. <br /> December 11, 2014 <br /> Page 2 <br /> Summary of Conflict <br /> This conflict involves an extremely rare situation in which one municipality,the City,seeks <br /> to exert extra-territorial monopoly utility powers and extract monopoly profits within the sovereign <br /> boundaries of another municipality, the Town, without the Town's consent. <br /> The City currently operates its electric utility within the Town as an unregulated monopoly, <br /> yet the City has been given no statutory or constitutional power provide extra-territorial electric <br /> service within the Town's municipal boundaries. The Town, on the other hand, has the express <br /> statutory power and responsibility to furnish its residents with electric utility service, and has <br /> temporarily delegated that power to the City pursuant to a Franchise Agreement(Exhibit A),which <br /> will expire on November 6, 2016. The Town has elected not to renew its Franchise Agreement <br /> with the City at the expiration of its term because the City continues to mismanage its electric <br /> utility and subject the Town and its citizens to unreasonable electric rates and oppressive utility <br /> practices. <br /> The Town and its residents receiving electric service from the City are captive non-resident <br /> electric customers of the City and have no electoral voice in how the City manages its electric <br /> utility or sets its electric rates. The City has set its rates in such a way that the Town and other <br /> captive non-resident customers are required to produce millions of dollars of surplus electric <br /> revenues that the City then diverts to its General Operating Fund to be used for general purposes <br /> that are entirely unrelated to the City's electric utility. This diversion of surplus electric revenues <br /> results in a massive subsidy that unjustly enriches the City at the expense of the Town and other <br /> captive non-resident customers. <br /> In addition to diverting electric revenues to its General Operating Fund,the City has made <br /> a series of imprudent management decisions that have driven the City's electric power supply costs <br /> to excessive levels. This in turn has resulted in the City charging unreasonable and oppressive <br /> electric rates to the Town and other captive non-resident customers. Again, the Town and other <br /> captive non-resident customers have no voice in electing the City officials who ratified these <br /> unreasonable rates and imprudent management decisions and will continue to make decisions <br /> regarding the City's electric service and rates in the future. <br /> As captive non-resident customers of the City,the Town and its residents receiving electric <br /> service from the City continue to be disenfranchised by the City's refusal to comply with the <br /> referendum requirements of Section 366.04(7), which the Florida legislature passed in 2008 to <br /> give non-resident customers a meaningful voice in electing the board that controls the City's <br /> electric utility. <br /> For these and other reasons, the Town has lost all confidence in the City's ability to <br /> properly manage its electric utility and treat its non-resident customers fairly. Accordingly, the <br /> Town seeks to exercise its express statutory right to furnish electric service to its inhabitants <br /> independent of the City upon the expiration of the Franchise Agreement. The Town also seeks <br /> damages for unjust enrichment and unreasonable rates. <br /> (� <br />