ML19351F068
| ML19351F068 | |
| Person / Time | |
|---|---|
| Site: | Saint Lucie  |
| Issue date: | 03/26/1976 |
| From: | FT. PIERCE, FL |
| To: | FT. PIERCE, FL |
| Shared Package | |
| ML17209A483 | List: |
| References | |
| 359970, NUDOCS 8012290393 | |
| Download: ML19351F068 (13) | |
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4.. MINUTES OF. A SPECI AL JOINT AND T!!!! Font PILRCE CITY CO;i:XSSICH, FRIDAY, MARC!!
20, 1976. AT NEETINC 3:30 P.M. 06 T!!E FO Chstrasn. Cwell Menge; Vice Chairman }.: l
- Utilitics Authority t6ahors Present:
San Reilly; Secretary, llavert L. Penn; Crnest E. Settic, itsyor Ben L. Bryan, i.' l
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Jr., Ex-Officio Member Charles Jackson .
Commissioners Browning, Csynon, Les11c, Lor,g
- City Commissioners Present: {
and Hayor-Coc=issioner Bryan.
Director of Utilitics, Wsiter Us1dwin;U. A. Attorney, Charles' liarry Schindchette and Ken Danicis of ,
Others Present: i R.P. Brown; City Clerk, Inez Lowery; Florida Power and Light; Attorneys George Speigel and Bob Jsblon; Fis Agent, D.C. Ituskey; s
l Assistant. John Litton; Director of Finance,11111 Ilidic; Bob ,
Administrativ:
- Superintendent Electrical E1cetric Engineer, Transmission. Troy Lee; Tom Neulton; Customer U. Manar.ct, Service A. Chief Enginecr, John Skinner:
Fradd; Power plant Superintendent, Jack Smith; Ann Wilder of the Miami Ifersid. -
Don Turk, TWA Dir. Communications.
Mr.Menge enlled the Utilitics Authority meeting to ordct. '
- Hayor Bryan called the City Commission to order.
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- Mr. Menge said we have with us todsy Mr. SpeigelMr.and firm in Washin;; ton that Menge Mr. iJablen from so forth. He thinks they have something to bring us at this time. 3 turned the aceting over to Mr. Spiegel and Mr. lirown. I Mr. Brown stated he might say a word by way of introduction in for those who do not know Mr. Speigel.Cas Transmission suit which is pending in the Districtj and Federal C Miami. It started in 1971. t'e had an initisl scetleme'nt
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. itcs in this kind of work or his firm does and he is pr:hably the most i ,
, qualified attorney in the country in this particulst kind of work involv ng Gas Transmission Co: panics and all facets of utilities.
, He hss never visited here Although t
Mr. Speigel said it is a pleasure to be here.although he has represented th l
' his firm does work in gas perhaps the 1srgest part of his work is desling with electric problens. Their law firm does almost nothing but represent municips1 groups municips1 utilitics, .uthoritics who own their own i '
elcetric, gss and municips1 operations.
with major Their work power companics in thebasically country and is negotist ng i
for them, arrsn;;cmpnts '
l occasionally dealing with the Federal Power Commission The thing that strikesThey and himhave other about agenc;! es the their interests. a good ,
in order to protectFort Pib ic situation is that it is like so many things.IIcre they are losing their jgas l :
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operation here and something has happened.
, supply which was producing energy at a fairly cheap rate and hsyc had to shift to oil. Every utility faced with that particular situation found thatWha their rates were escalating.is first to evaluate There was a fue: whether you need to operate your s ;
in view of the change of economics.The fuel was coming in pretty cheaply. He q the systen to operate base load. ld have s
'wss a esp put on the price of gas and but for that cap, the Now the City wants 'I gonc up. It no longer makes sense to operate base load.theything have with Florida Power and that should to operste under a vary exec 11cnt agreement Ligh t. There is an interconnection agreement and the first f ,
be studied is what the economics of the operation would be -- what kind oa rates could be charged -- onAn operation like that which is contempleted then by Florids Power and f.ight. the industry,ds Power ,
the screement and contemplated as being donc throughout f Flori -
the plant would uperate as part of a combined system made Floridaup Power o and and Light, this.Jy< tem.snd some.of the other systems that .
The hours the plant would operste would be greatly i
- Light display to them. of oil burned would be greatly decreased lic hasn'tf the opera f decreased, the amount
, looked at all the engineering aspects oa flow factor cyclinn piant. The plant probshly operate as a peaking plant, is in the bestyou interert of the
" would he turned on and generate whenever it On that basis That is would find one analysis , t
' combined systems in that hour to generate. I
, that the total cost of power is conoderably . cheaper.
that needs to be made. 5997D
- The second analysis is the fact that with the new generator coming .
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- you are temporsrily surplus in espacity. When you add generating units --, ,
i you don't get just enough to tske carc of this year and next year; you e i- <
have to size it big enough so you have a fairly ef ficient unit and,therefore, .
- you put in more capacity than is needed in the year in which it is installed.
It usually tskes 3, 4, or 5 years to grow into that espacity. What they do '-
is sell their excess capacity. . .
The analysis has to be made of what you could sell that excess capacity T
' for, what price, on a short, long or medium term basis. There are some 40 or 50 sepsrste cicetric utilitics in Florida. An snalysis needs to be made as 8-to what their relationships are between how much capscity they harc and how auch load do they have. Some yests ago the City of Lakcisnd wasto selling the City temporary excess espacity over Florids Power and Light's system, of Jacksonville. Florids Power and Light was transmitting the power. The wsy the arrangement was semantics 11y put together was a sale from Lakeland to Florida Power and Light and a ssic from Florids Power and Light to Jacksonville.
In connection with the t'cw Smyrna situation, Florids Pouer and Light agreed to transmit power for New Smyrns Beach anti he thiaks they agreed to transmit power for this espacity. He hasn't. looked at Florida Power and Light's balance between espscity an't load, lie doesn't know yet whether they need it. If there
- is some other system that necds it, it is salaole. It seems to him in talking with Charlie Brown Isst week, that a study has to be made as to whether under a revised operating basis with Florida Power and Light, you would want to see whether your rates in Fort Picree might be redcced down. lie doesn't know how far down. They might well get below Florida Power and Light.
I Any business has good
, There times and is snother hard times.theme You thathave needs to he a good struck here.If you look back on the history.
business.
of thc husiness , you will see that it has been a good business. It hasitproduced comes g j
,It has had a lot of economic benefits to the City. Like any businessinto hard times
.Powcr and Light's rates are lower than Fort Pierce's rates. There are a number <
of reasons, s lot of which are to the credit of Florlds Power and Light.
They've gone deeply into nuclest generation. TheyAs tooklong their as chances. They those nuclent esde their judgements and made the investments. ,t gene ators are running and they don't run inte sny specist prohicms, grest.
D u lon't know what could happen tomorrow. If they develop problems with son.. of these nuclesr generators, suddenly the situation could change snd if and when they like the City are faced with running out of their fuci supply, lic you might find in another year or two that the situation is reversed.has seen p cipation of lower rates from ancther company and two or three years later, g you find that because of situations and circumstances, this doesn't material-faces Fort Pierce, )
b ize. lic doesn't mean'to underestimate the prob 1cm that he would say that as the owners of this business, it would seem to aske sensegood at low to first see if there is another way of operating it at a profit,
- rates and evaluate that along with everything else that any be evaluated. '
He said he would be happy to answer questions because he's tried to say a lot
- in a reistively short tzme.
Mr. Henge said he understands one of the actions this board needs tothat takeis -
is to file our intentions to buy a picec of the nucicar power plantis in the process of being to be built in South Dade County. Ile asked if thatMr. Bsidwin said he is waiting * '
done or are we waiting for direction on that.We have written them asked them about it some. time-
- for some word to go shcad. Hr. Henge understands our ago , but haven't gotten any further with it. intentions!uve to be filed in the early par
.this. .
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Mr. Settic asked Mr. Spelget if he is going to get into some of these -
lie said he is representing the Aut hority in gas matters and if;-they d
+ him .to represent thenin cicetric matters, he will be gisd to do it.
said to
- 'Mr. Settle as'ked him what some of the siternatives are". Mr. Spelget be specific, the Authority has a fine . interconnection agreement with Florids Power and 1.ight. Ile remembers this very acutely because he when he argued - the bruunht that case for the City of Cainesville in the Supreme Court, lie said that all Cainesville is asking' agrecuent for from Florid.:up un the day of the argument. Power Corporation is what Fort Pierce has fro e
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- There is an agrccuent, but Fort Picree is not utilizing it to its full extent. -
. ~. T The first thing that needs to be donc is to make an analysis which ultimately p l has to be a joint study between Fort picrec and Florida power and Light, as to --
. how the two systems can most economically benefit from a combined operation which generally will have centrs11 cd dispatch by Florida power and Light. 4 Then an evaluation of the costs, chstges and rates would bc necessary. Mr.
Scttic said Mr. Spelgel is speaking of pesk load. Mr. Speigc1 said that is
. right. lic 'would have to knou the characteristics of the generating unit. -
Ides 11y this would be pesking and reserve espacity. Every cicctrical system has to have base load espacity, peaking capacity such as turbines and generally
- their oldcr capscity which usually isn't worth very much, they hold in reserve . .c In the event of outages of the good units, they have to bring in the oldcr stuff. #
- We're on a combined operation basis and Fort pie:cc wouldn't .bc burning sJ1- the
. .- 011 they're burning, energy costs would be resluced. ,
Mr. Scttic asked Mr. Speigel if he represents the DfJA. Mr. Speigel said he doesn't represent the n!UA as such. Ile represents a number of citics in FMUA.
Mr. Scttic said he knows Mr. Speigel represents the so-culled seven citics.
As Mr. Settic undcrstands it the FMUA can go in together now and build their own nuclear plant. !!c asked if this is correct. Mr. Speigel said he desit
- . with the cdges of that issue. lie isn't sure and would have to turn to some Florida lawyers on that. There was Legisistion passed in connection with the Chrystal River generator. Therc, Florida Powcr Corporation sold 100 megsustts to a number of municipals in Florids and there was specisl Icgisistion reintco to that. There was snother bill introduced which he believes was opposed by Florida Power and 1.ight under which the municiosis could have done what Mr.
Settle is saying. Mr. Settic asked if that bill was passed. Mr. Brown said Don Turk could orobably tell Mr. Settic. Mr. Turk introduced hinscif. He stated he is Director of Communications for n'UA. Ile stated there were 2 bills intro-duced in session lost year. One was in respons: to the Constitutional Amendment
\ . approved in November, 1974, which would allow private esmpanics and municipals
- to be involved together in generstion snd tran;rnssion facilitics. There wert 2 introduced last year: One to allow participation in Florids power Corporacicn's .
huc1 car unit and another which became known short titic-wise as joint power authority uhich FMUA introduced. The bill that allowed terf cooperatives
.to participate in Florida Power Corporations nuclesr unit passed and the othes is still on file in the House of Representatives. There is some disagreement f '
- as to whether cities could get together with present legisistion. It has not '
been tested. Tha bill MIUA filed pertaining to joint power is still in the Icgis1sture. Mr. Settic said so at this point the answer is no. Mr. Turk - 1 said that probably would be the quickest answer.
. Mr. Settle said that would bring out another question in his mind. If we file intervention in the Dsde County plant of FPf,1, sotconc has said, and he is i going back in his mind and doesn't know who said it or where or when, that the
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' bonds could be sold on future revenue of this participation in this plant.
He asked if that is possible. Mr. Huskey said that is a possibic mesns. If l
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- you can show a sufficient savings over a period of time, it is a possibic way of financing. .
- Hr. Settic asked what the cost per megswatt was for this plant down here. 1 1
Mr. Schindchette stated that if he recalls correctly it was around $1,000 to l
$1,100 per kilowatt. Mayor Bryan asked what he estimates the cost of the new plant to be. Mr. Schindchette said it would be approximately $800,000,000 l -
It will be in the same sres per kilowa.tt, but that doesn't include inflation.
Mr. Scttic said 10'. of that would be $30,000,000. If we can show that we're going to save enough money to psy off the 80'aillion dollars
.saidover a 20 areyear
,. Mr. Iluskey there a number period, we can sell the bonds on that basis.of citics that have donc exactly that in connectio Corporation deal. The same process could be followed except that this is s 11ttIc bit differcut situation in that they anticipate being on the aline sonc-tiac late this year. It wasn't an 8 or 10 year proposition. It was It year to s' would bc I
. yest and a half before they could start receiving thosc henefits. Mr. Settic N financing over a longer period of time for .a unit
- just starting. b said he is tryint to picturc this in his own mind. He asked Mr. Spelgic how C7 auch Icad time is involved. Suppose we intervene in the second in plant time,and either in c7 vant to buy 10*. of the plant in Dade County-- at what point ,,
. - construction, application or completion, do we have to cose up with the 80 : ""
million dollars.
Hr. Speiget said it varies depending upon in how the matter-is as a participant--
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- resolved. . lf the company says they are willing to let you
'. and :sy to let's sit down and get the contract draf ts d and the studies out,.
there are 2 thing. you need to do: You have to take a good cluse:louk at the l
cconcaic data that only the company has -- what is it really going to cont?
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Secondly, you hsyc to iron out the contrsets'. When you are putting your l[ l
~.* noney ou t for s plant sumcwhere else, you have to make sure you have the transmission and everythine else. Thcrc is one company out west that is i. ,
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moving along fast and if the compsuy does thst, the municipal is going to .,.
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- have to put up its money and come in on the ladder. Some of these situatlons '
Up in New England, they were arguing and litigating while the plant was being
- built. The result was that they didn't have to put in any money until after ,.
the plant was operating and they already knew what they were getting into.
It depends on now the course of events go with the company. Mr. Scttic said ,
looking at it frora our own particulst standpoint if wc are looking at Icudtime -- f and he doesn't know 'sw long it tskes-- Maybe Ilsrry can answer this if we file intervention and are successful and they say they'll sell u.s a percentsge ,
of the plant or regardic?s of whether we don't , what point in time is the
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Dade County plant going to be in omerstion. Arc we talking, ten years, five years or what? Mr. Daniels said 1s35-86. Mr. Settic said this is abnut 10 years.
He doubts seriously if we could pay interest on the hands for that length of time. Mr. Huskey said you wouldn't need to sell 80 million dollars worth of
- bonds at one time. You would sell 4 or 5 series of bonds. You aren't going to need to put up to million dollsrs. Mr. Settic said possihty we could work it out like the company out west and rut it up af terMr. it isHuskey in operation. Florids said he is sure
- Power and 1.ight's got all the money in the world.
- that Florida Pn'rer and 1.lght 'isn't going to borrow 300 million dollars. They'io going to borrow it as,they need it.
Mr. Spelgel sal.1 the idesi situstion is that you argue with Florlds power .nd Light up until the day the plant is ready to go into operation. At that tr' you finally get your contract. Once they dec2de to go In any shesd with ne:;otiations you,pe.
some tt .c want to see your money as fast as possibic.
are pushing and some are pulling. The way he looks at it is the petition :o g
intervene is for the purpose of establishing your right to have the oppernialty i' ' .
. to buy. When you petition to inttrvenc you're not making your decision pecacfc
- you can't make a decision until you have more vf the facts and the wholc Icgsi ,
eclationship clarified. It costs money to do thst. You're talking sheut millier s of dollars in investments. You're going to have to spend money on consultants l analyzing the thing before you commir yourscif. You can study everything in tl c :
horld unless you know you have something that' is rest. That is the posttion
- l he has taken in every proceeding he's handled. The duty of the company to make a proposal. a definitive proposal with the facts and data is needed by City officials to make an intelligent determination as to whether or not they I
want to do it. lic remembers this in connection with the Mainc Yankee plant i where the company said drsmatically before the FCC, "h' ell, Mr. Speigel, are your clients ready to put up their money?" lie said they are not ready until you give us a propossi,snd we know we have an offer, the people can spend the money needed to evalus.te the offer and get it. At the first stage you develop j your right to have the proposal made definitively. Thereaf ter, you nake your studies and sit down to negotiate with the company. Everything may he finc l
a except the price for some of the back up and things like that may be too much.
In that case if isn't ecc.nomic. !!c stated he worked this out with Florida I
Power Corporation in 6 months which he felt was darn good considering it was a : ,
l first. It can he done in 6 months. More likely it would tske htsyor a yearDryan before said !
i this group would be presented .and vote to spend the moncr.
Florids power Corporation was in a bind, were they not? Mr. Speiget said it :
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- was partly that and it was partly that there were some good relationships '
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- developed between Florida Power Corporation and the municipals and cooperatives they do business with. .About 3 er 4 years ago litigation and arguing ter ainsted.
They are willing to do business on that basis. ,. ,
Mr. Fcnn said as long as Mr. Speigel is saying that the Anthority is rot l ob11 gating itself to the pisnt itself and that we're just going to use our i
privilege of intervening and 1ctting then know that we are interested, he l
- doesn't see why we couldn't go shcad and intervene. Mr. Menge said if this ,
had been done some five years ago on unit no. I we would be in on that now.
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Mayor firyan asked what is involved in intervention' in terms of what we obligate C
. 't ourselves to. Mr. Speicel said when you're intervening, draf t ing the petition .c 1sn too expensive a proposition, although it is becoming a enre expensive g*
doev ent. The big question is, is it going to go to hearings and what kind of hear.ngs are they going to be. It is difficult to know. Very few of them have gone to hearings. 8 cme have gone to hearing < and they've been long and difficult.
l There are a number of other cit ies in Florida that are ennsidering Ita inter-s ica ll y ,
I vening. If that would happen, the cost would be split smone. them.
- j you'rc intervening in t*ood faith with intention of pursuinr, the matter., Un
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4 the other hand, realit.ics being what they arc, if you're faced with a long, to
'g expensive hearing procedure, you have to re evaluate how deeply you want .,
- get into the proceedings. Ile would say they're committing themselves to an i'
- intervention and to the cost of a reistively short hearing, not 100 days Mr.
of b, hearings. flayor Dryan asked how much Mr. Spelgel is ts1 king the same thing. Inter-shout. ~~
Speigel said if there is a group it would cost about vention is talking shout 2 - 4 thousand dollars. There'd be some additional
- pleadings and then there'll be contrsets. Ifith all preliminaries sud everything sise, you'd probably get up to maybe $10,000 for all the citics participating.
Cencrally speaking, most of these cases have been resolved, depending upcn the g position the Justice Department takes. lic can think offhand of three esses that :
have gonc to lengthy litigation, two of which his firm was involved. One of there in Louisisnns, they were abic to confine to a relatively short hearing. f
- One in Michigan couldn't be confined sad went to 70-80testimony days of hearings. Ifhat ,'
in and didn't
. they did in that particular proceeding was to pu,t appear at the hearings. They put in their esse and told the Administrutive Law Judge that it was fine if the Company and the Department of Justice wanted to So into an intc11 cetus 1 bit of resesrch, but they just couldn't spend the money. If you go to a reasonably sppropriate hearing you're talking about costs in the order of 40 - 80 thousand dollars, Icgal and technics 1 personnel.
- Re would say , he should be abic to answer this question more briefly. Lawyers
. always expect other people to answer to il e point. He thinks in terms of immediate committnent, it's in the neighbtrhood of 5 - 10 thousand dollar:.
spread among a group of cities. Mayor Bryan said as an individus1 city, if
. wc decided to do this, could we pull out at any time we wanted to with no further obligation. He asked if that wou'd be correct or not. Mr. Speige: said -
hs would think it's correct, subject to what lawyers know. You make a gooc faith representation, but that as genersi, is the experience. That's the under-standing smong the groups.
- - \ Nr. Settic said he is not willing to concide a sale to Florida Power and Light at this point because we haven't scen proposuls of any kind and don't tvcn know if they're interested. In light of that and what the Mayor has said ,
over and over and what he fully concurs w.th, that it scens that atomic power 3
,is the only way we're going to be abic to go to get this rate down, he would make a motion that we file for interventic.n in th- South Dade Atomic Plant of
- - Florida Power and Light. Mr. Fenn seconded the tion.
Mr. Baldwin asked Mr. Speigel if it would be necessary to have a fairly ccm- 1 I
prehensive study made before we intervene, deciding the amount of electricity 1 we'll need. Mr. Speigel said this would not be needed. Generally speaking, we know enough facts. Mayor Bryan asked what the deadline on intervention is.
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-Nr. Speigel said ilt is April 14th. Mr. Baldwin said that is the isst he heard, .
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- Commissioner Csynon asked'if they should have an appraisal made an the plant .
before they start out and see what they have to work with.
- Mr. Settle said right newwe're ts1 king about buying, not selling our plant.
Mr. Menge said ,we're talking about buying them out now.
- Wr. Danicls of Florids Power and Light asked if it is permissibic to make's Mr. Daniels said j comment. Mayor Bryan
- aid he would like to hear from him. I he would like to bring out a couple of things for his own clarification if
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for nobody else's. One thing is you are ts!
He isn't s lawycr king shout so he an asked interventioneveryoneinto a
some proceedings bear in trashington.It is his further understanding that what you are talking *
.- aboutwith hiin.require
- would bringing a suit essentially allegating anti-trust actions;
~ that is, that Florids Power and Light is having dealings that are inconsistent a with the anti trust laws. Mr. Speigel said that is only partly correct.
1ssically, whether the situation and circumstances may be inconsistent with 8 the anti-trust laws -- you may not he doing anything, but you may have from an economics point of view, the kind of monolopy, which even thoua.h,pctsonally. i you're not doing anything you shouldn't do, you have obt:'ined such a monolopy.
would be an issue. There are a number of actions on occasion which they have l }
e- taken an issue with, with Florida Power and Light. Mr. Danicas forsaid he knows l
that. His point is that just a simple statement of voting intervent ion f is J is, in his.vicw, a little hit more than signing.a "me too" petition. That l*
t i ! you are gning to essentially bring those thoughts againrt rpf,1. which says that they are in their dealings with Fort Picrce, inconsistcut with those laws i
- . dealing with anti trust.
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. Mr. Fcnn said he didn't . understand it that way. 8
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,. *lo felt ifr. Spelgel was saying that as a municipsi owned utility,We that we missed b have the privilege of buying into the South Dadu Nuc1 car plant. {* r that opportunity some years ago with the one on llutchinson Island. Sometime "
ago when we contacted a certain agency, they told us we were too late to
- ' negotiste to buy into the flutchinson Island plant. There is another nuclear plant which will be built. in SouthinDade. buying Asintohe understands this plant. Init order we have untilso to do
- April 14th to show our interestwe have to go thrnu;h the procedure of intervening, saying'to.;the Depart that in good faith we want to buy into this plant. I Itssically, the Mr. Speigel said he would see if he could clarify this. ,
- opportunity of local utilitics, smaller utilitics, to participate in the I ownership of a large nuclest generator is considered implicit in anti-trust You have a dramatic example here today, laws in these kind of circumstances.
where you are suddenly faced with a situation where youroit costs have gone
' up and you don't have say nuclear energy, you're put in a disadvantageous .
position. This is not because you don't have a good system or because you
,' - didn't use forcsight, but tots 1 circumstances result. The concept behind the nuc1 car act was that this new form of cheap energy which had been developed at great cost by the govern =cnt and taxpayers, would put large companics who are 1
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' in' a position to put together the tremendous ag;regate of capital necessary to
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- build the Turkey Point or St. Lucic, in s position where they could put every-the Fort body cisc out of business. He hears peepic say weThis havestatute to sellwas out design Pierce and he system wasn't because we have oil and not nuc'est.. involved in the drsiting, but was involved in it
- and the concern was that smaller utilitics like Fort Pierec should have an opportunity to participate in nuclest development with the bigthst, companics basically, as a
- mer.ns of being abic to stay in business because it was felt even in the utility business, competition is a fundemental principal underlying this economic society. The concept of courts have said that they have to
.. g preserve as muc's competition as possiblu, because if you wipe out the sen11
- systems and turn the state over to one or two big companies, What's theninvolved they don't here 8
.have is that.
to compete and then they don't have to be efficient.The because Florida power and.
reason there is on the face o
- justifies Light interventien, is, as he understands it,is refusing to permit the s=s11er systems to that is really the basic proposition. Ile thinks that is fundamental to it. - j f The problem of litigstion could be essily resolved if T1orida power and Light, l *
- and he is sure the Department of Justice would support our position, offers ;
[ an opportunity to the various citics to participste.
. Mayor Bryan said what concerns him in light of Mr. Daniels' remarks is that he thinks we're approaching this intervention more in an effort to obtain ' I information on this as t comparison.
If it costs 80 million dollars to ! 2
. that was needed, and we're sitting with !
acquire the portion of the pisnt30 million dollars worth of bonds on a plant we aircady I have and w it might well be that after intervening for s while. <
power than we need, thatthat would he climinated as-sn siternstive or as a reasonabic niternstive or somewhere along the way we might find out tha t we couldn' t. What the R yur would hate to see hspren then is to have some other parties take to our get own in there, .
pleadings if we have to allege anti-trust action of some sort and use that to block the negotiations for the sale of the system which we now i have,to Florida power and Light. This business of buying power is certainly that 3 something that needs to be explored, but we're sitting here with a plantfor the co l
can at Icsst It is'an expense thst's going to he !
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make more power than what we can use.there regardless of whether We'vewe are going still got to he able to com to buy power :it a cheaper. rate from Florida powes and Light. to maintain.
l the bonds on the plants, the employees at the plant and the plant As he understood the proposal that was being made, but he was doesn't that we needed want to to esplore
- exp. lore alternatives and he agrecs with that, -
an siternativ'e whicli'is going to knock us out of the ballpark then on what
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- may well he the most ressonah te solution to the problem and that would be to sell the plant. !!c would hesitate to vote for a motion that would have a chance of knocking us out of the negotiations to sell the plant based on ourby violations intervention
, Florida Power.and I.ight.
and pleadinns we might make relative to anti trustEle is wondering if ,it might h about pleadingr, to have something is awful draf ted, hard a proposal to talkasinto.what the. abstract we can do in the forn-or interventbe iontaking.
and what
, . position we-would -
we andwould look atbe saying in the interventiun, whatthat and have it to us in time that;we
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con td .sce it 9 do.
over for a day at least sud have a specini scuting and then vote on wha JWp
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- The !!ayor doesn't want to get hung on the sale of the system in an ef fort to get siternatives by exploring an avenue that's reasonahic to explore, but -
he doesn't think it's reasonabic to explore something that night knock us (
out of what looks like a reasonabic solution st this point depending on the 1 way negotiations go. .
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." Mr. DanicIs asked fer a clarification of what ifr. Spcinct said as to your l
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a implicit rights to someone ai n's nucicar unit. Ifc ststed that it is his understandin:: that the law does not say that. It may he implied but it isn't !! .*
in the law that snyone has a right of access for somebody olse's property. As He asked if that is true. Mr. Speigel said the 1sw does not say that. !
i ist as he knous the only pcopic, private companics that have access to other 3
peopic's property arcutilitics exercising the right of eminent domsin. A
- utility which has this right is chercising some of the rights of the sovereign. ,
1 In order for competitien to survive, it needs access to this new fora of
- energy which is only sysilabic in rather large plants. The conclusien dich l
- has been drawn and applied in many cases is in order to naintain a sicustion consistent with the anti-trust laus, a portion of the pisnt should be offered to other utilitics. Mr. Danicis stated that isn't it really true that since the law does not say that,thst the implications are that if 1 utility is in !
fact inconsistent under the anti-trust laus, then the Justice Department may try to get a set Icnent to have the other party gain access rather than having a direct right to just say, " Hey, I want a piccc of your unit over herc," and
! " . i that's all there is to it. Mr. Mr. Speigel said he agrees with Mr. Danicis in '
that this is not the law. Daniels said if he understands what has been sa'id so far, in order to get involved in an anti trust review of FPGL's of. l about allegations l application anti-trust for license, the City would have to I.rin::to Fp;L and be prepared to defend them,
' stated, "I can tell you that FP6L will deny then and defend then vigorously."
!!e further stated he- is just trying to cicar the air here because he doesn't
- think the Board really understood it that way. ,
Mr. Settic would like to take opposition to what the Mayor has said. Obviously. -!
3, Florids Power and Light objects strenuously to us filing this intervention s proceeding secording to what Mr. Daniels is saying. Mr. Scttic thinks it if we dowould I 1
6t -
- - put us in a nuch better position thing to do. He doesn't to sell to Florida Power and Lightfil I
. that is the best Uc have no ides that Florida Power and Light wants to buy 5
- . at this point.
this plant and if we do, what they're a year willing outtoofoffer this plant us forinto thisthe plant. We General do know we're pu. ting some $000,000 l
Fund at this point. ' Mayor Brysn said $462,000 plus a $70,000 credit. Mr. ,
Settic said siright - $563,000. It is close to $000,000. It seems to Mr.
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-Settic that if we cet cca. pared to what they offer the City of Vero Dench '
-* which he believes was six and a half million if he recs 11s, and if that could be -- not will be -- by some future City Commission, seen as a windfall ]
- to pave streets and so forth and then the money is conc, then you've got toAlusys 200 of the pcopic j go into taxes to raise bonds for the genersi fund.It would seen to him this is going to have to be s psy g00 of the taxes.
long sud hard as to whether we're really interested in selling . !!c for one is .
not willing to take the position Littic at this point was a formerthat we're employee interested of Florida in Power sellin;;. 1 l He night also point out that Mr. Mr. {
t l and Light for many years and is now the City Manager of Vero Besch. 3
- Scttic can see where riorida Power and Lignt would definitely like to buyof competition. He would g Fort Pierce and Vero Beach and get rid of this pocketbefore he would vote for selling it have to take s very, very long hard look at it. Mr. Scttle would prefer to voro on the motion ~
on the floor.
7 Mayor Bryan said the point he w.s trying to make was if we by passing this motion, take a chance on climinating the possibility of selling this plant to Florida Power and Light'by alleging anti-trust action, then obviously if we to into court and prove anti-trust sction on the part of Florida Powerofand to win the opportunity to purchase 10*. or some percent Light in an effort ,
the
- plant doun -in Miami, then the ucxt answer by anyone cisc who wanted tothe determin-
[
. intervene,if af ter getting the opportunity to purchase that plant,it were better not l I 4 I ation were made that and that it would be better to proceed to sell i
- a. portion of a plant in Hiani the plant to Florida Power and Light or at 1 cast have that alive as an for whatever reanon ,
niternative, that any interested party' opposed to that +
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would then he ahic to take the position the City had taken in the F1nrida Power.and intervention .
- ' to establish than based on the-City's own pleadinp,s that ,
I Light should net be allowed t o negotiate with the City because .. .
Light were committing.
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, ,. , l J Ills suggestion was that we defer action on this until f - .
wouldwe can if see what isact I
, , the intervention have, . . . t ation of this matter to determine what effect Ilc [
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any, on the continuing efforts to negotiate with Florids Power and 6 Light.isn't
- -s is prepared to :sy that he wants to see an offer from Floridajl rower N and I isn't prepared to vote in favor of a motion that mightto consider whether or not
- the peopic of this concunity to have the opportunitv j they want to sell this plant to Florida Power and !.acht. Itc is prepared to t .-
proceed further to ask Hr. Spelgel or whoever is sppropriste to subniit tointer- us l t for consideration at a special meeting before the 14th, whatever effect He is sitting here being asked to vention might have so that we can see. ' i vote on a motion to file plesdings that he hasn't seen to raise issues that he i
- isn't sure of, but appsrently one of them is anti-trust, and without beingissue and the effset '
advised of the ramifications to us of raising the anti-trust that would have on our negotiations with Florida Power 'and Light and be isn't going to vote in favor of that. .
Daniels that question. Mr. Daniels
. Mr. Settle ask:d if we could ask Hr.said he would like to cicar up one point. He isn't here today t this body not to intervene -- no way -- that is your choice. Ilis only point As he
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in said, being herea is he isn't to make lawyer, but sure this body understands what is involved.is trying to say w Nr. Danicis said TP5L was asked to come and ts1h with Theythewill Authority do thatandif aske that a propossi for the t ossible purchase of the system.They are going to look at it very carefully for 3 is utill what points. Oneisis, c esired.it it good for Fort Pierce, is it good for FP5L and its share- If those holders and is it good for the customers and employt.cs of Fort pierce.
things don't jive up, as far as Fr$L is concerncd Ethey es#t make a pro
.a .
think we can do business with you."
i Mr. Settle asked Mr. Daniels if he could ask him a question with a yes or noMr. Settle asked if
. answer. Mr. Danicis said he can.Mr. Daniels said he thinks the Mayor answered that^
will cesse negotiations .
aircady. Mr. Danicis can't answer that because he isn't an officer of the ;
cocpsny and that decision vill have to be made by one. Mr. Setti that we probably would not feel in the proper posture to try to buy the system
, while the Authority is litigating against us in an anti-trust matter which would ,
further that anti trust. '
Mr. Settle said as he understands it, if there is such a thing as a friendly j anti-trust suit, this vould be onesaidof them. Mr. Danicis said hc isn't awarc i of any of that type.
Mr. Scttic FP;L is creating a monnpoly in the south Florids aren. He thinks it would be argued on that basis, especisily this if Vero is sold to FPOL. He understands Dsytons Beach is considering at point going back into their evn system since their contract his expir i
from his own standpoint as a businessman and not as an attorney, if he vare Florids Power .ad Light, ,he might negotist? more snxiously if intervention was flied.
Mayor Brysn said if you are in a dangerous position reisting to anti-trust andl l there are civil and cr'.minsi sctions which can be taken against you for anti- -
trust and silegations are made that you sIready have too much of an area. you might very well feel that you can't negotiste for anymore of that area once that &
allegation is made by the party with whom you are supposedly negotiating.
Mr. Settic said he understood there would be no criminal charges, simply a- trust there ar ..
civil charge. Mayor Bryan said for anti
. case, would there be criminal charges? Mr. Speigel they're said no. Es would be stating facts which show on the grounds of principal, why what
- doing may be incon<istent with the guidelines of the The problem can anti-trust laws. This is he ensity solvc<1 altogether di f ferent from a case in enurt. h
- if Florlds Pcwer and I.ight of fers some fair sharc, a rcistively small s are, by making a proposal to share the nucicar pisnt.
There was one comment Mr. Spefget noticed ej f
earlier by Mr.1 3 that they're not going to' give up casily. . .
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. Mr. Spcinct would like to have 504 for. cverytiac he's heard that from a ,
t . major utili tics company. Many major companics have succceded in carrying ,f' their point just by impressing upon somebody that disagrees with them the , , '
!* fact that it may bc long and expensive and difficult to prevail. Mr. fipcigel '
- o i y ' has been surpri:;cd how rapidly the situntion changes very quickly.h%cn you go ahead and do it all of a sudden you find that it happens. Itc thinks .
he can probably probe his memorics when he's heard this cycn from Florids -'
- Power sud Light befure. That's an occupations 1 hs:srd. Mr. Speigel takes ,
his work very seriously. If they find in their opinion that the company
- is unreasonably dragging it out, then they begin working st lower and lower .
J y.
rates. They've discovered the answer to what Mr. Danicis was implying, is to hang in as attorneys even if they have to work for nothing. !!c is ,1 never going to sit in a conference roon with sny utility -- he repretented a small city in Florids some 10 years ago when.they looked Florida Power and Light in the eye-- and he's never going tu be in a position "where he says to his client that they've got a righteous cause, but because they're in a position to drag it out and make it expensive, you'd better give up. He'll work for nothing for as many years ss necessary to try as best he can to right the balance between the small litigste with the limited resources and a major company, the fifth largest utility in the country , with an unlimited litigation budget, which the customers are paying for. Mr. Speigel stated
.- .- that he would say this, that if this thing is going to be dragged out and the protection cf your. interest requires it, he'll work for nothing.
Commissioner Caynon said you've got a deal. .
Mr. Speigel thinks this is very important when a priva'te utility comes before .
a public agency and makes what he thinks was c1carly implicit.in what Mr.
Danicis said.
'Nayer Bryan said what concerns him is not dragging it out or how long it's
- going to take. He's concerned shout the initis1 action and the effect that it would have. If we were nct in the process of considering snic of the plant i I
to Florids Power and Light and we were determined to go shcad for sure i without considering this as an alternative, if we were to go ahead and operate
- E nunicipsi plant, he wouldn't be concerned about the procedure of Jnter-
. venticn. t'in, lose or draw ve've still got a plant to operate. Ile thinks onc '
. of the choices being considered at this time by the city and Utilitics Authority is the potential of the ssic to Florida Power and Light, purchase by them and
- the sale by the City. He is concerned that the papers filed in this inter- i vention would have an effect on that other choice which might or might not ,
prove to be the aest solution for the city, by climinating it as a choice.
He is concerned that if we prove our esse too good in the intervention, we i sight get all Joae with it and determine it is not economics 11y feasible to }
go ahead and get a piece, of the plant, and so then we say we don't want to do that and decide to go back to "go" and tsik to Florids power and Light and they say, "Sorry, we can't talk to you. You've proven so well the anti-trust allegations you've msds that you don't have that as a choice anymore. ,
We can't afford to get into that." .
l
. - Mr; Speigel said he is very often glad he's not' a Mayor who has to be faced with tough decisions. He recognizcs there are some tough elements in it.
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Or.s prob 1cm is that you've got a desdline. That's the resi probica. If you didn't have to face the res11ty that Florida Power and Light, unicss you
- do intervene by April 14th, is going to say as they said about the other units, that you're out ---if Florids Power and Light's representative is willing to say thst even if Fort Pierce does not intervene, they will nonetheless be given the same opportunities to participate in the plant as sny other Intervener has, then they could get Fort Picree off the hook in that fashion.
If they are willing to work out some other interin strangement, that would .;
do it. If they're not, Fort Picrce is faced with the problem.
Nayor Bryan said if we could in time to meet the deadline, have a copy of the if these-proposed pleadings and a Ictter from legs prohibit, 1 etmnsciwin, advising us that lose or draw, or ef fect
- picadings are filed, that this would not our ability to negotiate a sale to Florida Power and Light, we could at that .
- time if we had th3t advice and s copy of the pleadings sn we could actually see the allegations relating to anti-trust, be in a position to know what's being filed and have expert advice as to the specific ef fect of filing thosc specifics.on the alternative of selling the plant to Florida Power and Light.
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Hr. Spelect said they know what it is to havc'dcadlines. If the'cummission p }
. and Authority desire it, they certainly will get this thing draf ted as fast ~
i
- as they can. lic would expect that they could get it to the bodies. He would M prefer whencver it is possibic that the plesdings be reviewed by the City itself before they are filed, because it is the city's action, not his.
IIc doesn't know if they will be sbic to answer precisely the question being
. placed before them. , ,
Mayor Brysn said that is the question he's interested in, because if filing of #
- those picadings is going to c11minste the possibility of negotisting with
. Florida Powcr and 1.ight, we ought to know that on the front cud of that filing ,
and not file it, rather than come in on the back end and be told we've knocked ourselves out of the possibility of negotiating with Florida Power and 1,Ight.
Mr. Henge said he is sorry to s'ay that we've got a couple of membcrs who have prior engaa.cments and they're going to have to 1 cave us. There is a question on the floor. Mr. Fcnn es11ed for the question.
. Mayor Bryan said he would like to offer a substitute motion.
Mr. Settic sail Mr. Fenn called the question. Mr. Henge'said the Mayor could
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offer his moti2s.
Mayor Bryan said he would like to move that thn Authority authorize the "
preparation of pleadings for intervention in the procedure involving the plant in Dade County for submission to the Authority at the carlicst possible date 4 and that a special meeting be es11cd to considc r those pleadings and thatalongas to thc cffect of fili
- with the plcadings , advice bc sought on any potential or prospective negotistions with Florids Power and 1.ight
- - A ,
- concerning the sale of-the c1cetric system. ,
. ~
This motion di:d for 1sek of a second.
Mr. Menge askeI that the roll be enlied on tl e question. ,
Mr. Fenn, Mr. 'tcilly, Mr. Settle and H'r. Henge voted yes. Mayor Bryan voted no.
Motion carried. .
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Mr. Fenn exited at this point.
~~ Commissioner Csynon sa.id nobody ever said whs't this plant would be worth if ;
. we were to sell it. '
Mr. Henge said that is true and that is tsc next thing we're going to take
- . up. He is glad to have the City Commission here today because he thinks it's important to have them know what's going on because they're going to be involved in any finsi decision made. .
We have here at the present time a resolution -- one that was presented
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and one that the Mayor hss revised that now gets involved in the sale of the l plant. .
Mr. Hence asked Hr. Baldwin if tne.e is any particui:.r disagreement with the '
revised resolution. Mr. Baldwin said he hasn't had time to compare them. IIc .
doesn't think there would be any probica. Hr. Henge said. basically it's the some thing. There is some change in wording. Mr. Us1dwin said he thinks the Mayor has essentially required sn estimate of cost. Mr. Hence said it states we will proceed to bring ahoard some expert persons, engineers, accounts and -
so forth, to make an evalustion of our plant so we can find out what we own.
You can't sell anything unless you know what you have. Right now he doesn' t think sny of us know what we do have. Ifc need to 1cnow the net worth, market
- n. value, potential value, what will happen five or ten years down the road.
Mr. Baldwin said Mr. nrown ludicated there was no quarrel with the Mayor's
'rcsolution. Mr. Scttic said the only thing he notices that has been changed is rather than hiring people, that we get proposals. lle is in agreementinwith the this. Mr. Daldwin said he thinks Mr. Bryan sino excludes the attorneys 2nst II:6r.' Mr. Bryan said he was assuming,. mayhc he was assuming. wrong, - - -
, that it would bc Hr. nroun. lic gsthers :that say .have been su error.5 3 3079 :
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3/26/70 . .
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Mr. Settic moved t. hat Resolution U. A. 76 .5 .be adopted, 1.r
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- Mr. Baldwin said so there will be no question. this is the substitute resolution prepared by Mayor Bryan. Mayor Bryan said he has an origins 1 here.
- The roll was called with Mr. Reilly, Mr. Settic. Mr. Bryan and Mr. Henge .
voting yes. Mr.,C ten carried. *
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. There being no furcher business Mr. Menge. adjourned the Ut111 tics Authority ,
. Special Meeting. ,
.. Nayor Bryan adjor.rned the City Commission Special M.eeting.
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~ * . . ' , ATTEST: -
' ~
secretary Chairman <
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t APPENDIX B l
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