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Motion to sell assets fails at heated FMPA board meeting
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| By: Mark J. Crawford, Editor |
September 05, 2009 |
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Cities interested in exiting the Florida Municipal Power Agency may not have gotten anywhere at last week's agency board meeting in Orlando, but irate customers definitely made themselves heard during a three-hour session that morning, according to Starke Operations Manager Ricky Thompson.
Green Cove Springs, locked into the same long-term all-requirements power contract the city of Starke is, made a stand at the meeting, requesting that the board issue a request for proposals for the purchase of agency assets or alternatively conduct a feasibility study on the dissolution of the ARP project and distribution of those assets among the members.
Translation: Green Cove wants out, just like the city of Starke and some other all-requirements members.
Thompson, who represents Starke on the FMPA board, supported the motion, but it ultimately failed miserably with a 2-13 vote.
As a way of potentially reducing customer costs, Green Cove Springs also asked that the natural gas hedging policy be put on the agenda. Futures contracts entered into by the agency have caused customers to pay above-market-value prices for the fuel being used to generate electricity because fuel prices dipped quite a bit. That increased customers' fuel adjustment rates and drove their utility bills up as the agency lost many millions of dollars paying more than necessary for natural gas.
Green Cove moved that the member cities direct FMPA staff to limit hedging contracts to no more than 30 percent of the agency's estimated fuel needs in any three-month period. The motion, supported by the city of Starke, failed, according to Thompson, as did a subsequent motion to table the issue.
Thompson said the city of Kissimmee then moved to suspend hedging until the business model working group, which Thompson also sits on, makes a policy recommendation to the executive committee on its gas hedging program.
So, for the time being at least, the agency won't be able to lock in any prices on natural gas purchases beyond what is already hedged. In addition, a portion of the current contract is expiring later this year, which should cause bills to drop.
Starke and Green Cove Springs are not the only cities unhappy with the management of FMPA, Thompson said. Others include Lake Worth and Fort Meade, which had dozens of protestors with signs present at the meeting. Several spoke during the public comments portion of the meeting, telling stories that many locally can identify with. Power bills that exceed mortgage payments. People on fixed incomes who cannot pay for both electricity and medicine. A grocery store in danger of closing.
Familiar stories, indeed.
According to The Ledger, Fort Meade signed the all-requirements contract in 2000, but it did not begin receiving power from FMPA until this year because of a preexisting contract with Tampa Electric. Before Fort Meade was paying around $80 per 1,000 kilowatt-hours for wholesale power. That jumped to $130 under FMPA, which dug deeply into the utility profits the city uses to help pay for services.
As a result the city had to raise rates on customers. At more than $172 per 1,000 kWh in July, Fort Meade was the most expensive municipal electric utility in the state, according to a survey from the Florida Municipal Electric Association.
The same survey also shows Starke near the bottom of those municipal utilities, at around $134 per 1,000 kWh. However, any higher than 1,000 kWh, and the city's residential rates jump. At 2,500 kWh, Starke is among the highest utilities again at almost $375, but it's still not as high as Fort Meade at almost $413.
Thompson said Fort Meade wants similar shows of outrage from fed-up customers in other cities.
"I told them I would try to get some from here," Thompson said, adding that Green Cove and Lake Worth may do the same.
Any who do attend one of the agency board meetings should not necessarily expect a response from the FMPA. Thompson said the board's response last Thursday was no response at all.
Still, Thompson, who is used to hearing from local customers when utility bills rise, said it was the first such show directed squarely at the full FMPA board and staff since he has been involved with the agency.
"I've never seen people that upset," Thompson said. The FMPA CEO's was plastered on one of the protest signs, he said. Others begged to be let out of the FMPA contract.
Starke, Green Cove Springs, Lake Worth and Fort Meade have all given formal notice of their intent to exit FMPA. The contract terms still stand, however, unless the cities plan to buy their way out.
Starke gave its notice 5 years ago, which leaves 25 years to go unless something changes.
FMPA Assistant General Manager Mark McCain said at the conclusion of the comment period last Thursday, FMPA officials offered to visit Fort Meade to address electric rates or any other topic as it has done for Starke and other members.
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©Bradford County Telegraph 2010
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Joe Riley |
Oct, 06 2009 |
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FMPA needs to relize that Rate payers are suffering because of their poor management of the Company and they need to fold. I am a rate payer and live in Green Cove Springs. I pay the City roughly $6,000 per year for utilities and 80f that is for electricity. This has gotten out of hand and should no longer be tolerated. IF the only reason that this company has not been audited by the state is because they are "owned" by cities and not a "public" company...They are a major cause of people not being able to pay their bills and buy food for their kids...With so many cities wanting out of their orginization a "light" should go on over their shallow thinking heads and they should fess-up that they are running the company into the ground...Take a look at the salaries that are getting paid out..SHAMEFUL
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