Eckels questions Mayor Seiler about FPL franchise

[drbillftldle]

You're probably right about the 5-0. But in 25 years of public service, I've never been on a board that was so blatantly deceived. Ethical and Sunshine thing also. It's hard to let that pass without going on the record.

I didn't go to the meetings. Until last week, I thought that the city would incorporate into a brief for the FPSC some of the new info and suggestions I had developed. Reality check.

If you are interested academically, I could send you the stuff from Homeland Security.

[drbillftldle]

It is not too late to reopen negotiations. The proposed franchise agreement should at least be submitted to outside legal opinion. It remains to be seen whether the powers that be will act in the public good based on good information, rather than the disinformation supplied by FPL and filtered through city negotiators. Your input is needed to speak at the commission meeting tomorrow night. TiVo your TV shows and come live. Reality is better. Make it so.

[DenFtlaud]

We could do this we could do that ... In this economy the could do's could be expensive. All the contracts are for 30 years. It's time to approve this and move on already. Did you attend the PSC hearings on the FP&L rate hike at the Broward County Main Library in June? I couldn't attend, but I have sent a letter opposing it. I also attended the last hearinf the PSC held in FL and very few people were in attendance.

[DenFtlaud]

Prediction: FP&L Franchise Agreement approved 5-0.  Stay home. Don't waste your time attending the meeting.

[drbillftldle]

For the last three months, the primary UAC researcher has tried to meet with city negotiators to give them this data and to suggest strategies. Those efforts were rebuffed by city negotiators, despite public promises to the contrary. One might speculate that they thought this knowledge would complicate their negotiations. Unlike recent union negotiations, the FPL franchise negotiations excluded the public. We should all wonder why. Litigation is a bogus issue.

[drbillftldle]

Ft. Lauderdale stands to make 6% of $30M in franchise fees. Ft. Lauderdale has not expressed any opposition to the rate hike. FPL is a vertically integrated monopoly. They have no reason to give us an agreement with any favorable clauses. We should be suspicious that what they give in one part, they taketh away in another. We should all wonder why Ft. Lauderdale hasn't opposed the rate hike.

[drbillftldle]

FPL wants a $13B rate hike to ensure it gets enough investment from stockholders. FPL's parent company, the FPL Group, is traded on the stock exchange (FPL isnt). The company reported net income of $1.7B last year. It had a return on equity over five years of 75+ %; 13+ % last year; on track for 44% this year. That's better than the S&P 500 and virtually all Fortune 500 companies. The rate hike would cost Fort Lauderdale residents $30M a year.Rate hike? I don't think so.

[drbillftldle]

Until two years ago utilities only reported adjusted data, which excluded outages caused by major storms and about eight other categories. In 03, FPL reported about 70 minutes as an average outage duration. Unadjusted data counting storm outages raised this to 4500 minutes. To put these on the same graph the axis had to be changed from linear to logarithmic. The hidden cost of these outages avoided by undergrounding could go back in our economy, instead of to FPL stockholders.

[drbillftldle]

As for a cost of the buyout, utilities always overestimate the value for their grids as a scare tactic. They quoted up to $900 million. More likely, it is half that. After all, we wouldn't be buying their generating plants and nuclear power plants. Even adding this on as a second bond issue, we would recoup costs in as little as 10 years. Hidden costs prevented by outages would immediately have gone back into our economy.

[drbillftldle]

Utilities on barrier islands in North Carolina that have completely undergrounded report that outages from storms are virtually eliminated. If we undergrounded, then the majority of this $57M would not be lost and would contribute to our local economy. Net income, gross GDP, tax revenues, etc., would all increase, more than recouping the cost of undergrounding within six or seven years.

[drbillftldle]

Let's talk about the hidden cost of electrical outages. The Department of Homeland Security has estimated that an electrical outage costs us $112 per person per day, not including storm damage restoration costs which are passed on to us in our FPL bills. According to FPL, the service area suffered an average of 11 days per year of outages from major storms over the last 10 years. This works out to about $57M per year for Fort Lauderdale that is lost to our GDP.

[drbillftldle]

The Department of Homeland Security has estimated that an electrical outage costs us $112 per person per day, not including storm damage restoration costs which are passed on to us in our FPL bills. According to FPL, the service area suffered an average of 11 days per year of outages from major storms over the last 10 years. This works out to about $57M per year for Fort Lauderdale that is lost to our GDP.

[drbillftldle]

FPL has quoted costs for undergrounding of about $200 per linear foot to underground, this works out to more than $10-$15,000 per home. The new agreement might commit citizens to pay 75%. This is another scare tactic. We could say 20% by doing ourselves. Cost to underground in other cities seems to run around $3500-$4500 per home. We have an estimate of $400+ M. That could be spread over 20 years by the aforementioned bond issue.

[drbillftldle]

In response to our inquiries, several banks have indicated they would buy city bonds issued under similar circumstances, regardless of whether the money was used for undergrounding or buying out the FPL grid. And we would only be buying their grid; we would not be buying any of their generating facilities or nuclear power plants. That could easily be subcontracted. FPL would still be required by law to transmit electricity to us regardless of where we bought it.

[drbillftldle]

The Florida Supreme Court has ruled that as long as we are negotiating in good faith on renewing the franchise or buying out the grid, the utility cannot stop collecting and distributing fees. It's a scare tactic by FPL. Several states fund storm damage restoration costs by creating public benefit entities that issue bonds, whose repayment is guaranteed because the repayment was irrevocably linked to some particular income stream such as electric bills or property taxes. They all rated AAA.

[DenFtlaud]

It's also my understanding from the video, that the City can't negotiate a contract of less than 30 years. To attempt to do so, could jeopardize our ability to collect the franchise tax, which also according to the video amouts to I believe the figure stated was about 18 million dollars.

[estrobel2008]

We may end up doing it in the end but we MUST make changes to include more allowances for renewables. Within 5 years Solar will not need incentives within 10 years gulfstream power will probably be a reality, within 15 we may have smart grids that can control our major devices and pass power back and forth from hydrogen storage units in our homes. We need to think about what can happen over the next 30 years before we sign our energy future over.

[DenFtlaud]

It isn't going to happen! The FPL franchise will be renewed. It's to costly for the City of Fort Lauderdale to take this on. In a tropical storm or hurricane the City would have to pay for repairs. This could be very very expensive. Why spend money on a consultant in this economy for something that doesn't make economic sense?

[estrobel2008]

We pay for it now.. FP&L charges us for hurricane repairs, they pay Georgia and Alabama etc huge amounts of money to come down and help them repair our lines and then they pass that expense on to us. (Check your bill a few years ago for the post-hurricane charges

[DenFtlaud]

I know all of what you said. Do you think the City of Fort Lauderdale could get all the power companies to come and fix our grids after a storm like FP&L is able to do? There is NO overwhelming reason that the City should go into the utility business of providing electricity. You just can't take this on because you think "It's a good idea" because of FUTURE changes in the way that electricity service MAYBE delivered. Especially in the worse economy of most of our lifetimes.