CC Minutes 03/11/2003 - Laserfiche WebLink

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City Commission Special Workshop Presentations Investor Owned Electrical Providers Page 8 in. Economies of scale do indeed matter. Progress Energy has more than fifteen hundred employees located in Central Florida alone. Now I would like to address the purchase option. At the Commissioner's last workshop on government electric, Commissioner Clark summarized the issues that he felt needed to be addressed. He indicated that there were three main issues - consistent reliable electric power; confident ongoing maintenance and reasonable electric rates. Progress Energy is delivering on all of these. In addition, throughout our process with you, the purchase option is being considered by the City of Casselberry an important issue to any resolution and I am going to talk about that first. We didn't originally include a purchase option in our franchise renewal discussions with Casselberry, and I am sorry we didn't and I will say that we just underestimated the City's interest in a purchase option. I want to emphasize that we are now offering this to the City, which I will discuss in a few minutes. But I want you to know about our perspective and where we were coming fi.om when we made this initial decision. Since 1994, eight-six communities like yours have signed franchises without purchase options. Eight-six communities like Casselberry have signed franchises without purchase options. They were balance a fair negotiations with these communities and we remain on excellent terms with all of them. I can assure you without any doubt whatsoever that we respond to the needs of all of our customers, those eight-six communities, the same way we do for customers in communities with a purchase option. There is no difference at all. So I think you can see it was easy to underestimate a few towns interest in the purchase option. Over the past two years, just in the last two years, twenty-six cities have entered into franchises, twenty-four of the twenty-six did not have purchase options. Again, it was easy to underestimate the importance of the purchase option. At the November workshop on government electric, Tom Cloud said the only stumbling block to a franchise was the exclusion of the purchase option. In fact, Progress Energy has formally offered the City of Casselberry a fair and equitable purchase option. Let me tell you about the offers. The history of offers we made to Casselberry to include purchase options. The first purchase option off'er was made July 17, 2002 before the Arbitration ever took place. We offered it recognizing that this was the main issue for Casselberry. We also hoped that both parties could avoid the time, effbrt and the cost associated with arbitration. We then formally resubmitted a purchase option to the City's negotiating team and to the Mayor and Commissioners in February. In between July 2002 and February of this year, the purchase option was offered repeatedly in various conversations with City representatives. The last offer included the Oviedo style purchase option that was approved by Mr. Cloud and Ms. Reischmann. In addition, Progress Energy franchise policies include other flexibility's depending on the City's objectives. Next I want to address liability issues. It is important to know that Progress Energy is regulated by the Florida Public Service Commission. Your negotiators have sought to include reliability standards in a new franchise agreement. By law, Progress Energy is prohibited from offering preferential treatment to any customer or group of customers. We simply can't do that. I have carefully studied the service we provide to your citizens, our customers in Casselberry and I am very proud of the results. Our customers are satisfied and compliment us on the job we do.