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