Municipal Utilities Spark Highly Charged Debate

Feb 8, 2015

 

Credit Ian Britton

A dispute over utility territories has sparks flying as Indian River County works to push Vero Beach’s service back across city lines. Meanwhile stake holders are engaged in an energetic debate over a bill that could impact municipally owned utilities across the state. 

About 60 percent of Vero Beach’s city-owned-utility customers live outside the city limits in Indian River County. Rep. Debbie Mayfield (R-Vero Beach) says that means the majority of the utility customers have no recourse if they have a dispute with the utility. 

“They can’t go to the Public Service Commission because municipalities are exempt from the Public Service Commission. They can’t go to the county because the county doesn’t have jurisdiction over the municipalities,” Mayfield says.

She says Indian River County citizens could pay as much as 15 percent less for their utility bills if they switched to Florida Power and Light instead of using Vero Beach’s utility. An agreement the county has with the city to provide those services will expire soon. But during a recent Public Service Commission hearing, the state’s utility regulators told Vero Beach it’s required to provide the service it does now – whether the county wants that service or not. 

Mayfield says it’s unfair.

“So a municipality can go into the unincorporated area and provide utility services without having to get permission from the county commissioners in that county to provide utility service," Mayfield says.

Mayfield says she has a bill that could address some of the issues. It would require cities providing service in parts of the county to get permission from the county to do that. That’s not too far off from what’s happening now.

“But it would force the city to have to negotiate," Mayfield says.  "Because it’s like, okay, we know we have to work with you on this now, because the law says we can’t be here unless we work with you and come up with a deal."

But there are a few sticking points with Mayfield’s bill. 

Florida League of Cities Associate Director of Legislative Affairs Ryan Matthews says he’s worried the measure could force cities into flouting the law.  He wonders whether the measure would be prospective or retrospective. 

“If the bill took effect on July 1st, on July 2nd would every city have to go to a county if they provided service in the unincorporated area and say is this okay? I’m unclear on that,” Matthews says. 

And Matthews says there’s also a question about which types utilities the measure affects.

“Whether this bill by opening up chapter 180 if it brings electrical utilities that’s again a far greater concern for us. We have 34 members who own and operate their own electrical utility. Not to mention the 200 some odd who have a water utility or waste water utility.”

Mayfield says the bill does not include electric utilities—just water and natural gas. But Matthews worries if the bill passes, that’s a question the courts might have to answer. And if the bill did apply to electric utilities that could circle back to the PSC’s ruling – putting utilities between a rock and a hard place. The utility regulators say utilities must continue to provide service in their designated territories. But if a county revokes its permission, the city would be breaking the law under Mayfield’s bill, which could open it up for lawsuits. 

Executive Director of the Florida Municipal Electric Association Barry Moline says potential court cases and lawsuits are no way to create the right kind of environment for a municipal utility to do its job.

“You know, it makes sense when you just say it. It’s like, well, that makes sense. You know if you’re working together and trying to bring in business or whatever your goals are – trying to do all those things together – if everybody is on the same page then you pretty much all move in that direction," Moline says. "But in Vero Beach they’re fighting each other. And they don’t agree on their future and the culture they currently have is one of distrust.”

Moline says there could be other solutions for addressing Mayfield’s concerns. For example, he says, Vero Beach officials are looking into the creation of a utility authority that would oversee the utility and have representatives from the city and county.