Winter Park, Fla.-area power outages prompt calls to oust utility

Jun 29, 2004 - The Orlando Sentinel, Fla.
Author(s): Andrea Perera

Jun. 29--WINTER PARK, Fla. -- Power failures like the ones this past stormy weekend are what drove city residents to take a stand.

 

Winter Park voters gave their government the overwhelming message in September that they wanted to buy out their power provider, Progress Energy Florida. They were tired of their lights going out - - during good and bad weather.

 

A referendum, which gave the city permission to buy Progress' system, passed by a vote of 69 percent to 31 percent. With almost half of Winter Park's voters casting ballots, it was the biggest turnout in more than a decade. It also will be the first time in 50 years that a city in Florida will take control of a private utility.

 

With the past few days of thunderstorms fresh on their minds, Winter Park officials say now more than ever they think the right choice is to run their own system. According to Progress Energy, thousands of customers in the region -- including hundreds in Winter Park -- lost power during the weekend.

 

The city will make sure its residents get a better response than they ever did under Progress, said City Commissioner John Eckbert, who led the campaign to buy the utility.

 

"There will be a lot tighter leash on accountability," he said.

 

Still, critics of the buyout wonder whether the city will be able to handle the occasional storm and actually bring in new revenue.

 

Fae Moxley, treasurer of Winter Park Taxpayers Against Government Owned Electric, the group that fought the referendum, said she's afraid the city has unwittingly taken on a lot of risk.

 

"It's just inconceivable to me that the city would want to own the equipment.

 

And the whole point was we can make a lot of money," Moxley said. "I never believed that. And I don't believe that now."

 

City officials say that once they begin providing service in June 2005, they will make about $1 million in the first year of operation.

 

But Progress Energy, which is keeping close track of the city's planning, disputes those numbers. In an April letter to city commissioners, Billy Raley, regional vice president of Progress, wrote that the city's consultant had produced overly optimistic estimates of profit.

 

Raley wrote that if the city calculates it correctly, in that first year the outcome would be somewhere between a profit of $347,427 and a loss of $3 million.

 

The city's consultant stands by his rates.

 

Eckbert said Progress' letter was just its latest "propaganda piece."

 

"Progress Energy has always maintained that this was an economic loser and we're fools for taking it over," he said.

 

City officials say they have been working on the buyout idea for years. They are confident that they are methodically doing exactly what they need to do.

 

"Finding the right people to run the system, and running it well, we don't see as a difficult challenge," Assistant City Manager Randy Knight said.

 

So far, the city has found investment-banking firms to underwrite the bonds to buy the system.

 

They have contracted with Progress Energy to generate the bulk power.

 

Next, they're looking for an electric-utility director and a company to maintain and operate the power system.

 

That was the source of residents' dissatisfaction in the first place.

 

C.J. Drake, hired this year as Central Florida spokesman for Progress Energy, said more than 300 Winter Park residents experienced power failures during each day this past weekend. But Drake said many of the problems were resolved by the evening, and in general, the company's reliability in Winter Park has improved.

 

The average amount of time the city experienced power loss decreased by 77 percent from January 2000 to April 2004.

 

Still, Drake said Progress representatives don't know yet whether they will put in a bid to operate and maintain Winter Park's power system. Those bids are due July 1.

 

"At this point, we don't know what we're going to do," Drake said. "We're still thinking about it."

 

Knight, who said his lights went out during the weekend, said he expects that contracting with Progress for that service could be very unpopular.

 

"Obviously, if we turned around and hired Progress Energy to be the ones that maintained poles and wires, I think our citizenry would be very upset with that because they had done such a poor job in the past," Knight said.

 

 


© Copyright 2004 NetContent, Inc. Duplication and distribution restricted.

Visit http://www.powermarketers.com/index.shtml for excellent coverage on your energy news front.