Meeting to focus on power proposal

St. Pete Beach will try to shed some light on whether forming its own power company is an economically feasible idea.

By AMY WIMMER

© St. Petersburg Times, published July 5, 2000

ST. PETE BEACH -- With little more than a year left in the city's franchise agreement with Florida Power Corp., St. Pete Beach community leaders this weekend will take a close look at considering a municipal electric company to power the city.

The St. Pete Beach Council of Presidents, a group composed of homeowners and business associations, has invited all the players to Saturday's meeting: hoteliers, business organizations, community-group leaders and representatives from surrounding cities.

Also invited are officials from cities throughout Florida that are operating -- or thinking about operating -- their own electric companies. A Florida Power representative also will attend.

Many of Florida Power's franchise agreements with Pinellas County municipalities expire within the next couple of years, which is leading some cities to consider other alternatives for providing power. Combined with the growing interest in underground utility lines along the beaches, city officials' curiosity about taking over some of Florida Power's infrastructure has been piqued.

"A lot of people never thought of it," said Terry Gannon, a former mayor of St. Pete Beach who has researched the municipalization of electric services and is pushing the city to explore it. "It's one of those situations where, almost your entire life, you only had one provider of power. You don't think of it in terms of other options."

Gannon has invited the executive director of the Florida Municipal Electric Association; a utilities official from Orlando, which has its own electric company; the general manager for Florida and the Southeast for Duke Power; and a public works and utilities official from Dunedin, which also is looking into forming its own electric company.

At issue is whether such a move would be economical for any of the beach cities. Dunedin and Belleair are pursuing their own municipal electric company, though Florida Power says that the consultant who prepared a report for the cities grossly underestimated the costs of the plan.

One factor that could determine whether a city electric company would be cost-effective is the issue of stranded costs. If Florida Power can show that it built infrastructure and supplied power to an area with a reasonable understanding that it always would serve that area, a city electric company could be forced to reimburse Florida Power for that lost revenue.

Gannon says Florida Power should not be entitled to stranded costs for its Pinellas County operations because franchise agreements include clauses allowing the city to buy Florida Power's infrastructure when the 30-year agreements expire.

The agreements expire in 2001 for St. Pete Beach, Redington Beach, Treasure Island, Belleair Beach, Madeira Beach, South Pasadena and North Redington Beach. They expire in 2002 for Belleair Shores, Indian Shores, Indian Rocks Beach, Dunedin and Belleair.

"(Florida Power) is taking a very aggressive stance," Gannon said. "They're trying to protect their turf."

Gannon and Jack Ohlhaber, president of the Council of Presidents, met Monday with Florida Power representatives to collect information about the company's opposition to municipalization of electric services.

Ohlhaber said the meeting would be a low-key discussion of the alternatives.

"Our franchise agreement is coming up for renewal, so it forces us to look at alternatives now," Ohlhaber said.

If you go

The St. Pete Beach Council of Presidents meeting will take place at 10 a.m. Saturday at Legion Hall inside City Hall, 7701 Boca Ciega Drive.

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