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LOUIS HAUResidents decide to give their electric utility franchise to a municipal power company.
WINTER PARK - Progress Energy Florida Inc. suffered a resounding defeat Tuesday when residents of this central Florida town voted overwhelmingly to oust the energy giant and turn over its electric utility franchise to a municipal power company.
The 69 percent to 31 percent vote marks the first time in more than 40 years that a Florida town has ended a franchise agreement with an investor-owned utility. It delivered a humiliating blow to Progress, which had spent more than a half-million dollars in an effort to keep this town of 26,000 residents and nine square miles within its service territory.
In the balloting, voters decided to approve $50-million in bonds to buy out Progress Energy's facilities in Winter Park. The vote was 5,384 to 2,413.
"It was beyond my greatest expectation," said City Commissioner John Eckbert, a leader of the anti-Progress Energy campaign. "I've never been prouder of the people of Winter Park."
The defeat marks a second major embarrassment for Progress Energy Florida and its St. Petersburg-based president and chief executive, Bill Habermeyer. On his watch, the company also lost a standoff in July with the state Office of Public Counsel over the size of a rate refund.
Responding to Tuesday night's outcome, Progress regional vice president Rodney Gaddy acknowledged longstanding complaints about service and reliability in the town. "The legacy of the problems we had in Winter Park really had an effect today," he said.
City officials said they will seek bids for contracts to operate and maintain the electric system for the city and to supply power. At the same time, however, they said they will give Progress Energy a last chance to make a more attractive offer to renew its agreement with Winter Park.
Turnout for the election was high. Voting booths at the First Baptist Church on New York Avenue experienced brisk traffic during lunch hour, with as many as 20 people at a time standing in line to vote on the only matter on the special election ballot.
Real estate developer Doug Freedman, 33, said he voted for a takeover of the electric system as "a good business move" for Winter Park. He also said his home suffers from power failures about four times a month.
"I'm tired of that," Freedman said. Progress has acknowledged that the lights go out in Winter Park more frequently than in most other places, but it blames the town's canopy of oak trees that often fall on power lines in bad weather.
The Winter Park Taxpayer's Committee, a political action committee formed to support Progress Energy, raised $523,750. All but $750 was contributed by the power company, according to financial records filed with the Department of State's division of elections. The company spent heavily on TV commercials, billboards, newspaper ads and direct mail.
"If they're spending so much money trying to convince us that this is a bad idea, maybe it's a good idea," said Larry Martin, 53, a copier technician, who voted to break with Progress.
Winter Park Power Options, a political action committee that sought a break with Progress, raised $47,282, mostly from local residents. Most of its money was spent on mail and signs.
Some of those who voted to keep Progress Energy were bothered by speculation that Winter Park officials would end up turning over management of the town's power grid to the municipal utility from the big city to the south.
"It's a power play by the Orlando Utilities Commission, certain law firms in Orlando and the Orlando Sentinel," said Patrick Doyle, 62, a real estate attorney. "They labeled Progress Energy as an out-of-state company, as if the Sentinel is not." Progress Energy Florida is owned by Progress Energy of Raleigh, N.C. The Sentinel is owned by the Tribune Co. of Chicago.
During the campaign, Progress warned that ousting it would leave Winter Park residents saddled with unmanageable debt, higher electricity rates and greater reliability problems. Winter Park city officials countered that the town would be able to manage the additional debt and argued that taking over the electric system would improve reliability and improve customer service.
The vote marked the climax of a longrunning fight between this affluent Orange County town and Progress Energy Florida, formerly Florida Power Corp. Long-standing complaints about reliability and service had prompted Winter Park officials to consider striking out on their own as their 30-year franchise agreement with Progress expired in 2001, about the same time as in many other Florida towns.
But the company sought to squelch such efforts by declaring in 2000 that it would not honor clauses in franchise agreements that gave towns the option of buying out their local electric system at the end of the agreement. Winter Park and neighboring Casselberry sued the company and won court rulings that ordered Progress to keep the buyout clauses.
During the last two years, 28 towns have signed new franchise agreements with Progress, ranging in length from 10 to 30 years. Casselberry was among those that acquiesced. Under the pacts, a town agrees to designate Progress as its electric utility while the company agrees to pay the local government an annual franchise fee equal to about 6 percent of the revenues generated from local customers. The company also keeps ownership of utility poles, power lines and substations.
Only four franchise agreements remain unsigned, including ones for Belleair in the Tampa Bay area, Edgewood and Apopka.
- Louis Hau can be reached at hau@sptimes.com or 813 226-3404.