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