I left before the meeting was over but the message was clear—get out NOW. Being in the ARP (All Requirements Project) is costing us a whole lot of do re me—anywhere from $10 to 14 million dollars in year 2014 (it takes 5 years to exit our contract) or close to $4 million depending on what decision we make going forward.
The President of Energy Advantage Consulting, Sue Hersey, suggested several courses of action and admitted that “there’s a problem” with FMPA. She said that you really need people who can manage fuel risks. Right now we are 22.5% higher than FPL.
During Ron Exline’s term, he voted to purchase a share of the Nuclear Power Plant in Port St. Lucie. This has turned out to be a great investment for us and nuclear is cheaper. It provides 30% of our capacity with FMPA providing the rest.
We also own part of the Stanton Plant in Orlando which is coal producing. Coal plants now make about half of the electricity generated in the United States.
Volatile fuel prices and a weakened Florida economy as well as credit concerns could place pressure on the financial performance of the members of FMPA of which there are 14. Vero Beach exited with FMPA in 2005 and now in one more year it can sell its power and profit from what they produce. Right now, we must sell all of our power we generate to FMPA at a price they determine, not necessarily market rates.
We own our asset and Ms. Hersey said that all was in good condition because it has been maintained. The best plan of action is to maintain local generation for reliability, exit FMPA, run our transmission studies, do an RFP for long-term capacity and energy purchases, and highly consider a Stand Alone operation with the LM6000.
The overall message of last night was to give FMPA notice—NOW—before January 1 or we will have to wait another year and that will cost us possibly $14 million dollars to wait.
Perhaps we now have a Commission that will vote on the right course of action for The City of Lake Worth. One question that comes to my mind is, should we really be in the power producing business at all? With the right employees in place as well as Staff along with future Commissions that will read and understand Contracts, we have an excellent shot at being independent and lowering costs to all residents.
