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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 <br />December 17, 2014 <br />Page 5 <br />