CC Minutes 03/11/2003 - Laserfiche WebLink

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City Commission Special Workshop Presentations Investor Owned Electrical Providers Page 5 and thank you for coming hem and hope you get as much out of this workshop as we got out of yours. I would certainly like to recognize former Commissioners Dave Henson and Owen Sheppard as well as different members of Casselberry's citizens advisory boards that are here. Thank you for taking your time out of your schedule to be here. This workshop this evening is an ongoing investigation in terms of what the City's options are with regard to the electric service provider. In terms of a brief overview, the City of Casselberry had a 30-year franchise agreement with Florida Power Corporation, which expired in April 2001. Several years ago, the City entered into negotiations with Florida Power to renew that franchise agreement. One of the key sticking points in negotiations was Florida Powers's refusal to honor the right to purchase clause that was in the original agreement. Those negotiations between the City and Florida Power very simply failed to produce an acceptable agreement or provide for repurchase option or provide service or quality guarantees as well as rate guarantees. We conducted a feasibility study; we had a citizens committee that took a look at this issue with the idea of finding out what the City's options were. Interestingly enough this whole system is worth about, over a thirty year franchise agreement, the annual revenues are about $20 - $25 billion dollars. So over a 30-year franchise term, you are talking about between six hundred and seven hundred fifty million dollars, which is a pretty substantial amount. So for the City to undertake its due diligence, it was certainly not to be done overnight and not taken lightly. As part of this whole process over the last several years, there has been some litigation between the City and Florida Power. As I indicated, Florida Power refused to honor its contract with the City and allow the City's purchase option. The City legally challenged that and both Circuit and Appellate Courts upheld the City's tights. As part of those proceedings we were directed to Arbitration where an arbitrator last summer ruled that the cost of the system would be about $22 million dollars - just over. Then of course many of you may recall some of the activities that went on tight around election time - October, November; there was a lot of saber rattling within the City. After the election, what the Commission did was to look, ok, where are we, where do we go from here and what the Commission did at that point in time was to say o.k., we have two options (1) negotiate a franchise, a responsive franchise agreement with Florida Power. (2) In the event that we are not successful with that, what are our other options? Who else can provide the electric service to the City? What other options are there? So what the Commission is doing is taking a look at other possibilities. Tonight is the first in a series of workshops that we will be having. Tonight we will be heating from two different private entities who have an interest in providing the electric service to the City of Casselberry. One obviously is Florida Power, who formerly had the franchise agreement with the City of Casselberry. The second will be from a company out of California, a private company by the name of Enco who has the same interest to provide electric service to the City of Casselberry. So we are here to take a look and listen to those two proposals. At a subsequent workshop, we will be heating from municipally owned utilities that are interested as well in providing electric service to the City of Casselberry and we will evaluate those as well. This is the first in a series of workshops in exploring what our options are and who best can provide the