Monday, November 17, 2008

City staff to discuss FPL deal

City staff to discuss FPL deal

Cobb: Agreement means $1.4 million franchise fee for city

Publication Date: 11/14/08

Few residents attended the city's meeting Thursday on possibly renewing its 30-year franchise with Florida Power & Light, but it was clear they had major concerns with it.

The five residents who came to the meeting had two main questions: Why does the franchise agreement have to be 30 years, and what do city residents get out of it?

John Regan, city chief operations officer, said the purpose of the meeting was to see what issues residents had with the franchise. City staff will now take that input and decide how to pursue negotiations with FPL.

Dave Cobb, FPL spokesman, said the franchise provides financial stability for the company and the city in turn collects a franchise fee of $1.4 million.

Without the fee, Regan said, the city will have to find another form of taxation. He did not have examples of how the city would do that.

The city also collects the fee from churches and schools such as Flagler College and Florida School for the Deaf and the Blind, some of the city's biggest electricity users. Churches and schools are exempt from other city taxes.

St. Johns County uses FPL, but it does not have a franchise agreement. Resident Melinda Rakoncay wants the city to do the same thing.

"County residents get the same electricity I do, and they don't pay," she said.

Resident Crail Marlowe had a problem with such a long agreement with FPL.

"A 30-year agreement is an awful long time," Marlowe said.

Regan said he met with Cobb and other FPL staff briefly before the meeting and discussed possibly having a 15-year agreement.

"We're going to continue talking with them," he said.

The city has three main options: renew its franchise with FPL, use FPL's services without the franchise, or buy out FPL's equipment in St. Augustine and start its own electric company.

City staff is gathering information on all the options, although they have warned city commissioners that it could cost $50 million to buy out FPL.

Regan said city staff will take the information from the meeting and continue negotiations with FPL.

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