Towns consider idea for power

By AMY WIMMER

© St. Petersburg Times, published April 26, 2000

ST. PETE BEACH -- A few beach towns are looking into the costs and ramifications of creating their own city-run electric companies.

Some communities along the beach say it's high time to move power, telephone and cable lines underground -- a project that would beautify the Pinellas coast and make hurricane-prone beaches safer. But the price tag Florida Power Corp. attached to the project is prohibitive, city officials say.

Some of those officials are questioning whether the project would be more economical if they controlled the power lines. They are raising the question now because time is running out on several Florida Power Corp. franchise agreements reached nearly 30 years ago.

Representatives from most of the beach towns will hear more about the prospect of creating municipal electric companies at a Barrier Islands Government Council (Big-C) meeting this morning. So far, the Pinellas beach city most interested in such a venture is the largest -- St. Pete Beach.

And even that city stresses that its interest is preliminary. The St. Pete Beach City Commission has not yet discussed the issue, though city staffers are exploring it.

"Instead of using the profits to impress stockholders, you could take the excess revenue generated over expenditures, and you could do something like reduce rates or underground utilities," St. Pete Beach City Manager Carl Schwing said.

"We're not even sure if it's financially feasible to think about very hard, but we are looking at it," Schwing said.

From Treasure Island City Manager Chuck Coward: "I have little or no interest myself in such a project."

From Madeira Beach Mayor Tom DeCesare: "I don't know if there'd be that much of a savings."

From Redington Shores Mayor J.J. Beyrouti: "We're pretty happy with Florida Power."

Two other Pinellas communities -- the city of Dunedin and the town of Belleair -- have already studied the possibility of purchasing Florida Power's power lines, poles and substations. A consultant found Dunedin would save 12.8 percent compared with its 1998 rates; Belleair would save 12.4 percent.

Florida Power disputes those figures, and a company study shows the communities would have to significantly raise electric rates to pull off the plan.

On Tuesday, a Florida Power spokeswoman said the company would help any city weigh the risks of such a plan.

"We're always committed to helping the communities that want to understand the whole municipalization of their electrical service," Florida Power spokeswoman Cheryl Krauss said. "That's what we're doing currently with Belleair and Dunedin.

"We're always answering any questions that they might have about this and helping them understand the whole evaluation."

Madeira Beach City Manager Mike Bonfield said the beach towns looking to renew franchise agreements with Florida Power could also ask the company to reconsider the costs of putting utilities underground.

"That's one component that we've talked about and asked them to look at," Bonfield said.

Terry Gannon, a former St. Pete Beach mayor who has researched municipally run electric companies in Florida, will present his information to the Big-C today.

Gannon said he recognizes some communities fear forming their own utility would be an overwhelming task. But he points out the advantages: cities could collect revenues without raising ad valorem taxes; they could raise enough money to move utility lines underground; and they might even provide better service, Gannon contends.

He also points to more than 30 municipalities in Florida that are already doing it successfully. In New Smyrna Beach last year, for example, the city's utility company restored electrical service after a hurricane before private companies did, he said.

"The whole prospect of this looks daunting," Gannon said. "You've got to look at it in terms of what's valuable for the community."

The franchise agreements begin expiring next year, with Treasure Island's due in March 2001. The agreements also run out in 2001 for Redington Beach, Belleair Beach, Madeira Beach, North Redington Beach, South Pasadena and St. Pete Beach.

In 2002, the agreements expire in Indian Shores, Belleair Shores, Indian Rocks Beach and the two cities already considering taking over the electric utilities -- Dunedin and Belleair.

Florida Power has already renewed agreements with eight Pinellas municipalities.

St. Pete Beach has had a municipally owned electric company within its boundaries before.

According to Frank Hurley Jr.'s book Surf, Sand and Post Card Sunsets, electricity first came to the Pass-a-Grille neighborhood of St. Pete Beach when the town annexed the old Pass-a-Grille Hotel, which was already electrically powered. The town operated its own power plant until after Florida Power began stringing a line across Boca Ciega Bay in 1926.

Florida Power has estimated that burying power lines along Gulf Boulevard would cost $4-million to $5-million in St. Pete Beach alone. Burying utilities throughout the entire city would cost about $38-million.

Still, the idea remains just an idea throughout the beach towns.

"It's so new, and to us, it appears to be a rather large undertaking," said Bonfield, the Madeira Beach city manager. "A lot of our beach communities, we're pretty small.

And Florida Power has no plans to give up.

"We've been here for 100 years, and we want to be here for 100 years more," said Krauss, the spokeswoman. "(Carolina Power & Light) will be here at our side for the next 100."

Times researcher Mary Mellstrom contributed to this report.

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