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Despite ruling, Belleair utility still uncertain

A court decision allowing the town to buy the power company's equipment faces appeal and beyond that, even more questions remain.

© St. Petersburg Times,
published December 9, 2001

BELLEAIR -- A judge has ruled this town has the right to buy Florida Power utility poles, wires and other equipment needed to create its own power company.

Town officials say the ruling comes as no surprise.

"That has been our expectation all along," said Mayor George Mariani. "The (existing) contract is in very plain English -- so we feel vindicated."

In August of 2000, Belleair sued in Circuit Court for the right to buy Florida Power equipment so it could, if it chose, create a power company.

Florida Power argued that state law did not obligate it to sell. Late last month, Circuit Judge W. Douglas Baird disagreed and ordered both sides to come to an agreement over the equipment's worth. The judge gave them until March 15 to arrive at the amount.

Florida Power vowed to appeal the judge's decision.

"It is the first step in a very long process," said Nancy Loehr, regional manager for Florida Power. "And I'm pretty confident that by the end of the appeal process we are going to prevail."

The current franchise agreement between Belleair and the power company expired Dec. 1. And until the arbitration is complete, the judgment also called for Florida Power to continue paying franchise fees -- payments for use of public rights of way -- to Belleair.

Florida Power collects franchise fees from customers and forwards the money to cities.

A number of cities around the country have determined they could save millions by creating their own utilities; one study showed that Dunedin could save $3.5-million and Belleair could save $552,000 per year. Dunedin, at one time, considered joining Belleair's action but decided not to when it determined it could renegotiate a contract with Florida Power that it could live with.

Last month Dunedin commissioners cast the first of two votes to finalize a 10-year commitment with Florida Power.

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

Meanwhile, in Seminole County a judge in November ruled that the city of Casselberry, too, has the right to buy all of Florida Power Corp.'s lines and equipment in the city. Florida Power Corp. is not related to Florida Power.

Despite Belleair's victory, Dunedin officials say they are put off by the mixed track record cities have in forming their own utilities. Some lost money, while others could not reliably provide power.

"I would still be very concerned with the risk of operating a municipal electric utility," said Vice Mayor Deborah Kynes. "Especially within the current environment of (deregulation) and its volatility."

Commissioner Cecil Englebert agreed.

"We made the right decision," he said "And 10 years gives us plenty of time to look at new technology and determine if we need to get into that type of thing."

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