ST LUCIE COUNTY

Customers want to sell FPUA, but lack of will from local leaders shows that's unlikely

Olivia McKelvey
Treasure Coast Newspapers

FORT PIERCE— Business has been somewhat difficult lately at Panaderia La Perla, an authentic Mexican bakery on U.S. 1 that's been selling churros, flan, tres leches and a variety of pastries for 13 years. 

In the past two months, without much increased use, the bakery's utility bill has spiked by at least $800, according to owner Jose Miranda. 

"It's been challenging," Miranda said. "It's the slowest time of the year for a bakery, especially with ours being a Mexican bakery and everyone going to Mexico for summer vacation." 

Miranda is one of many business owners and residential customers of Fort Pierce Utilities Authority that have seen large increases in utility costs recently, some saying July was the largest bill they've ever seen after living here for decades. 

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Bill spikes are largely attributed to high costs for natural gas — which have more than doubled since late May, according to FPUA Director Javier Cisneros.

The 10% rate increases for water and sewer services and the 5% hikes for electricity and gas that the city approved in May, effective in July and again in October, also played a role. 

And for some of FPUA's 28,000 customers, the bills have become such a burden that more than 1,200 people have signed a petition to "flip the switch" and sell FPUA to Florida Power & Light Co. 

Many argue that if Vero Beach could do the same thing with its city-owned electric utility, so can Fort Pierce. 

In 2018, after years of talks, proposals and negotiations, Vero Beach sold its electric system to FPL for $185 million. 

FPUA officials and local leaders, however, say it's not an apples-to-apples comparison, and that in the future FPL rates might be higher than FPUA's.

High utility bills

Like Miranda, Noe Gomez, owner of multi-services Gomez — a translation, notary and interpretation company — saw his FPUA water and electricity bill jump. It was up by nearly $300 last month. 

Since his business typically revolves around seasonal agriculture work between January and May, business slows down in the summer and Gomez was expecting his bill to decease.

At home, Gomez also is experiencing hardships with his electricity bill, which nearly tripled in July. 

And for Rhett Lloyd, a Fort Pierce resident for more than 30 years, high FPUA bills have been a problem since the early 2000s.

Lloyd spearheaded the NOFPUA website in 2013, a movement solely dedicated to getting rid of the last municipally owned utility on the Treasure Coast.

Desire to sell

FPUA electric rates remain higher than FPL's, according to the Florida Municipal Electric Association, a trade group representing 33 municipally owned utility systems. An FPUA residential customer using 1,000 kilowatt hours pays $134.84. An FPL customer would pay $117.57.

While FPL rates currently are cheaper, that may not be true in the future, according to a recent FPL regulatory filing with the Public Service Commission. 

Additionally, some FPUA customers, such as Lloyd, live outside the city and feel they have no voice in setting rates, which ultimately are decided by the City Commission. 

It's a sentiment that more than 60% of Vero Beach’s 34,000 electric customers felt before its utility was sold to FPL. 

That's not necessarily the case here, since more then 90% of FPUA customers live inside city limits, Cisneros argues. 

And while elected officials view the 6% of FPUA profits, or about $6 million annually, that's funneled into the city's general fund — which pays city employees, including police, and funds maintenance for roads and parks — as crucial, some residents refer to it as a hidden tax. 

What would it take to sell FPUA?

A sale of FPUA would need 60% voter approval in a referendum, according to the city charter.

If that passes, FPUA would have to cancel its contract with FMPA. 

This proved a challenge for Vero Beach. FMPA told Vero Beach it needed to pay $108 million and get approval of all 20 member cities to leave the co-op. 

In the end, all cities approved and FPL's $185 million purchase included the cost of getting out of FMPA's contract.

Finally, any sale would need Public Service Commission approval.

Local leaders' input

It seems unlikely that city commissioners and FPUA officials would support the sale of the utility. 

"The grass is always greener until you get there, right?" Mayor Linda Hudson said. "... Right now I would not support (a sale) because Florida Power & Light is not going to be any better than Fort Pierce Utilities Authority."

FPL, Duke Energy Florida and Tampa Electric Co. estimated in regulatory filings last month that they will spend nearly $3.4 billion more than expected this year on power-plant fuel. 

FPUA is able to modify its power-cost adjustment monthly while an investor-owned utility such as FPL must go through a filing process with the Public Service Commission.

And while, for now, FPL's rates remains lower than FPUA's, that might not be the case after the commission reviews its regulatory filings this fall as the cost of natural gas continues to rise. 

"My goal is to be at or lower than FPL," Cisneros said. "There is no desire to to sell, because we are competitive. We've always been competitive."

Other city commissioners also were hesitant to support selling FPUA. 

"I'm not going to flat out say I can't support it," said Commissioner Curtis Johnson Jr. "I think we need to have a better conversation with the community.  Bills are high, those are facts, but to sell to FPL, knowing that FPL is going to go through some of these same things, rate hikes, is short sighted."

Commissioners Jeremiah Johnson and Tom Perona said the idea of selling FPUA should at least be examined periodically.

"I think it needs to be looked at from time to time," Perona said. "But my suspicion is that there is going to be no political will, no financial will and no will from the utility authority to investigate that much more than to be satisfied knowing that what they have is better than selling it."

Olivia McKelvey is TCPalm's watchdog reporter for St. Lucie County. You can reach her at olivia.mckelvey@tcpalm.com, 772-521-4380 and on Twitter @olivia_mckelvey.