New Tampa

Lighting contract is raising eyebrows

As Osprey Pointe's neighborhood association president tries to negotiate new service agreements, he is stunned TECO won't lower its prices on aging equipment.

By JOSH ZIMMER, Times Staff Writer
© St. Petersburg Times
published March 28, 2003

HUNTER'S GREEN -- Wayne Crawford of Hunter's Green wishes he could get a deal this good.

When his Osprey Pointe neighborhood was under construction, the developer contracted with Tampa Electric Co. to install the light poles and the underground wiring. The seven-year contract -- signed by the developer-controlled Osprey Pointe Neighborhood Association -- allowed Hillsborough County's sole energy provider to more than recoup its upfront costs.

Now, as Osprey Pointe's three lighting contracts expire, some residents are resenting the arrangement.

Fingering one of the association's recent street lighting bills, Crawford, the association's president, said Osprey Pointe's monthly payment for 70 lights is about $3,400. Of that, $2,700 goes toward the maintenance and rental of light poles and fixtures, he estimated. That means over the life of that contract, that maintenance comes out to $227,000 -- much more than it cost TECO to install the system.

And Osprey Pointe, a collection of 157 homes in three neighborhoods, is only one of many communities within Hunter's Green, Crawford points out. TECO has similar outdoor lighting contracts with most of them.

"It's a good deal," for TECO, he says.

The issue of TECO's outdoor lighting contracts has come to the fore as Crawford, the association's president, tries to negotiate new service agreements. To date, he has been flabbergasted by TECO's terms, saying the company refuses to give Osprey Pointe lower prices on aging equipment.

Some of his anger was muted after he learned TECO only charges what the Florida Public Service Commission, the state's utility regulator, allows.

The outdoor lighting contracts, which TECO calls service agreements, are governed by tariff schedules approved by the PSC, TECO spokesman Ross Bannister said. The schedules list different prices for a variety of light pole and light fixtures.

Bannister acknowledges the arrangement is a good deal for the company. He estimated TECO earns $30-million a year from the contracts.

In return, he says residents get reliable service, with the costs of that service built into the contracts.

"What Tampa Electric assumes as part of that is we'll replace them (the poles), we'll repair them," he said. "That's what this is all about.

"We can't make any more than what is allowed by the PSC," he said. "And we're not over that."

TECO filed its tariff schedule years ago, commission spokesman Kevin Bloom said. Staff could have questioned the prices TECO was requesting in its cost study but did not, he said. The commissioners gave the tariffs the final blessing in 1989.

"Our electric people have never had a specific challenge to TECO's tariff (schedule)," Bloom said.

Others share Crawford's frustration with the system. In fact, at least three other Hunter's Green communities -- Pinnacle, Lakeside and Laurel Ridge -- representing 121 homes dropped their service contracts with TECO when the opportunity arose, Hunter's Green Community Association manager Ann Johnson said. Pinnacle and Lakeside purchased their lights. Laurel Ridge had TECO remove the existing ones and paid an independent contractor to install a new system.

Street lighting is one of the biggest expenses for any association, said Harold Shankland, president of Hunter's Green's 78-home Quail Creek Neighborhood Association. Like others, he wonders why residents cannot get a break for renewing contracts with TECO.

The lights have "all been depreciated and paid for," he said.

Crawford, a former insurance company executive, said the association is weighing its options -- all of them a financial burden, in his opinion.

In correspondence with Crawford, TECO said it would allow Osprey Pointe to sign another seven-year contract. But the association would have to pay $182,000 upfront to do so.

The association also could buy out the system. After some prodding, Crawford said he convinced the company to lower its asking price from $40,000 to $15,000 for light poles and fixtures. But any savings would be more than lost in the expense of installing new wiring, he said.

TECO had to comply with the National Electric Safety Code. The association would have to meet National Electric Code standards, which would require a costly investment in boring new lines under streets and driveways.

In the utilities industry, "it's about the most expensive thing you can do," Bloom said.

Essentially, Crawford thinks the association should not be charged any more tariffs, that paying for the maintenance and electricity costs of the street lights should be enough to satisfy TECO. So far, TECO isn't budging.

The association currently is paying month-to-month, Crawford said.

Osprey Pointe isn't the first community to wonder about the contracts, Johnson said.

"It's more economical for a developer to enter into these lease agreements than to underwrite the overall cost of installing the street lights," Johnson said. "The downside is it leaves the residents with this issue to deal with. In some cases I think they're a little bit surprised."

-- Josh Zimmer covers Keystone/Odessa, Citrus Park and the environment. He can be reached at 269-5314 or zimmer@sptimes.com .

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