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    Dunedin waiting on power decision

    While it is still investigating going into the electricity business, city officials say they might be persuaded not to.

    By LEON M. TUCKER

    © St. Petersburg Times,
    published June 22, 2001


    DUNEDIN -- For a year and a half, the city has threatened to fire Florida Power as its utility carrier if the company did not give in to a number of demands as the two sides negotiate a new contract.

    The city wants the utility to give up control of its poles and wires should the city decide to go into business for itself. And with less than seven months left on the current contract, the city's public works director has been busy drawing up plans to do that.

    But even though other cities, such as Belleair, Winter Park and Casselberry, have followed Dunedin's lead and contested their utility company in court, Dunedin may end up signing a deal before the Jan. 1 deadline after all.

    "It may be that the best thing to do is sign a franchise agreement," said Bob Brotherton, the city's director of public works. "But that is the commission's call."

    Still, Brotherton has been working on a five-year business plan for the city to buy and distribute power on its own if a deal is not made.

    The plan includes the price of wholesale power and the overall cost to the city to run the service.

    "It was quite clear that we would be losing significant rights under their new (franchise) agreement," said Brotherton. "So we immediately began looking at our options."

    Brotherton's plan is expected to be finished by September.

    In its research, Dunedin sponsored a study that reports Florida Power's new contract proposal would overcharge the city to the tune of $3.6-million if it ever decided to purchase the company's utility hardware and go into the power business.

    City Manager John Lawrence wants to keep considering both options anyway.

    "There are some unknowns there that would probably lead to some litigation that would soak up a lot of legal fees," Lawrence said. "So we want to keep both avenues alive."

    Florida Power disputes the figures.

    Company officials say the city would lose money to higher operating expenses, high acquisition and legal costs. Such setbacks, they add, would inevitably be passed on to customers in the form of higher electric rates and reduced service.

    "If you make a slight error (in figures) it can really damage you in the millions of dollars," said Nancy Loehr, regional manager for Florida Power. "It's a risky day for people to get into the electric business."

    While similar inquiries into the benefits of the municipalization of power have been made by other cities throughout the state, the results have been mixed.

    Belleair is suing Florida Power for the right to purchase the company's distribution equipment.

    Dunedin considered joining the action but decided not to when contract talks took a turn for the better.

    In Seminole County, a judge in November ruled that the city of Casselberry has the right to buy all of Florida Power Corp.'s lines and equipment in the city.

    Though the company -- which is not related to Florida Power -- is appealing the decision, city commissioners in neighboring Winter Park voted earlier this month to not enter franchise agreement with the corporation and to negotiate with the Orlando Utilities Commission to operate the system.

    The catch: Like Dunedin and Belleair, Winter Park and Casselberry have to get control of the company's poles and wires before they can get into the power business.

    Florida Power, meanwhile, has renewed contracts with Belleair Bluffs, Seminole, Treasure Island, Redington Beach, Belleair Beach, Madeira Beach, North Redington Beach and St. Pete Beach.

    The cities of South Pasadena and Gulfport are deciding whether to renew contracts with the company.

    "They were appreciative of the community partnership we have with them," Loehr said of the eight municipalities that renewed. "The franchise agreement is also flexible enough that we all were comfortable with it -- I would like to see the city of Dunedin feel comfortable to move forward with this franchise."

    But comfort, for Lawrence, simply is a matter of getting something in return for giving up the right to purchase Florida Power's wires and poles.

    "I would say a significant partnership with the city, like undergrounding our utilities, would be something that would work," Lawrence said. "So what I've been waiting for is for (Florida Power) to say "if you give up this then we will do this.' "

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