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April 15, 2014 <br />The Honorable Richard Winger <br />Mayor of Vero Beach <br />1053 20th Place <br />Vero Beach, FL 32960 <br />Dear Mayor Winger: <br />Thank you for your leadership in meeting with FMPA earlier this month. While we are disappointed that <br />FMPA specifically requested FPL not attend the meeting, we do appreciate your efforts to move the sale <br />forward. <br />After reviewing the minutes of the April 2nd meeting between the City and FMPA, I want to follow up on <br />FMPA's desire to have an FPL guaranty to satisfy the City's contingent liabilities. First, I find it difficult to <br />believe that FMPA actually expects FPL to enter into an unconditional and unlimited guaranty. Not only is it <br />unfair to put such an onerous burden on FPL's existing customers, but such a requirement is not <br />commercially reasonable in any transaction and no responsible counterparty could agree to provide that kind <br />of guaranty. We have always agreed with FMPA leadership that FMPA members and bondholders should <br />not be disadvantaged by the sale of Vero's electric system and have worked diligently to structure a deal that <br />meets or exceeds that test. However it is clear that this latest reuest b FMPA for an unlimited and <br />indefinite FPL guaranty, in addition to benefits the City is already proposing actua f y puts 'fP ' members <br />and bondholders in a ar superior position than the currently enjoy today. This new approach Gy MMtT' <br />on y a. .s a..tiona comexr o t e transaction <br />conducive to the parties reaehin an agreement. <br />After many weeks of requesting that FMPA meet with FPL, I did finally speak with Nick Guarriello on <br />Friday. I expressed FPL's concern on issuing any such guaranty and my hope that FMPA will eventually <br />agree to meet with FPL so we can seek a more reasonable and commercially viable solution. <br />I would also like to clarify comments made about the $52 million proposal. In February, with the intent to <br />move the transaction forward, FPL accepted FMPA's request for a lump sum payment of $52 million to <br />compensate them for agreeing to the sale. FMPA offered and FPL accepted, subject to technical issues that <br />we believed, based on our previous conversations with FMPA, would be acceptable to them. To be clear, we <br />have not taken that deal off the table and FPL will stand by its agreement if the City and its customers would <br />like to pursue it. Based on our calculations, we continue to believe that such a large payment more than fairly <br />compensates FMPA members for any perceived risk they hold and that bondholders would actually be better <br />off from both a credit and financial perspective. Unfortunately, based on our reading of the minutes, it <br />appears FMPA is no longer willing to honor that offer and would instead like for the City and FPL to pursue <br />a separate agreement with OUC. Again, in an effort to accommodate FMPA's wishes, we are in active and <br />constructive discussions with OUC to try and identify another path forward. <br />Again Mayor, all of us at FPL appreciate your efforts to move this process forward and we remain hopeful <br />that your determination to have productive discussions will result in all of the parties being allowed to come <br />to the table so we can work together to negotiate in good faith the remaining issues. We look forward to <br />continuing to work together with you to bring lower electric bills to Vero Beach customers. <br />Florida Power & Light Company <br />ears punitive in nature anis, un ortunat y, not <br />700 Universe Boulevard, Juno Beach, FL 33408 <br />