Press Journal columnist misstates electric rate comparison Reply

The Indian River County Commission assesses a 6% franchise fee on the electric bills of country residents who are customers of Vero Electric, and of FPL. Similarly, If an when the become customers of Vero Electric residents and businesses within the city will also pay a 6% franchise fee, yielding an effective FPL rate of $108.69, compared to Vero Beach’s current rate of $116.08. The difference between the two rates is 6.4%, not 20%, as many continue to claim.

COMMENTARY

“Reisman and his colleagues at Treasure Coast Newspapers persist in presenting the rate differential between Vero Electric and FPL in a way that shows how much more FPL customers would pay, if they switched to Vero Electric. This is a misleading and meaningless comparison. The relevant percentage is the savings Vero Electric customers could expect by switching to FPL. At 1000 kilowatt hours, that number is 8.7% for county customers and 6.3% for customers within the city. At 1200 kilowatt hours, based on today’s rates, the savings would be 14.3% for county customers and 9.1% for customers within the city.” 

MARK SCHUMANN

For years, in comparing rates between Vero Electric and Florida Power and Light, the FPL-friendly Press Journal has followed FPL’s lead in quoting 1000 kilowatt hour rates.  Probably because this measure now yields the least favorable comparison from FPL’s perspective, the Press Journal is quoting rates at 1,200 kilowatt hours.

On the mainland, inside and outside the city limits, some 90 percent of Vero Electric’s residential customers use an average of less than 1000 kilowatt hours per month. Based on the most recent information available from FPL and the City, at 1000 kilowatt hours, the rate differential between the two utilities is 8.7 percent, $116.08 for Vero Electric and $102.64 for FPL. Reisman seems not to want to use these numbers, probably because he has for the last 7 years been telling his readers they could save 25 percent or more, if the City would only sell its electric system to FPL. In fact, the FPL-friendly Press Journal has played key role in leading the public to embrace an exaggerated sense of the benefits of the proposed power sale.

Not only has Reisman taken to using a different rate level for comparison, he misstates the delta. As of March, FPL’s rate for 1200 kilowatts of residential power was $122.40. Vero Beach’s rate was $142.87.  The difference between those two rates is 14.3 percent, not 17 percent, as Reisman claimed when he wrote, “That’s about 17 percent more than FPL rates.” The simple, undeniable, indisputable fact is that at 1200 kilowatt hours customers of FPL are paying 14.3 percent less than customers of Vero Electric, not 17%.

Reisman and his colleagues at Treasure Coast Newspapers persist in presenting the rate differential between Vero Electric and FPL in a way that shows how much more FPL customers would pay, if they switched to Vero Electric. This is a misleading and meaningless comparison. The relevant percentage is the savings Vero Electric customers could expect by switching to FPL. At 1000 kilowatt hours, that number is 8.7% for county customers and 6.3% for customers within the city. At 1200 kilowatt hours, based on today’s rates, the savings would be 14.3% for county customers and 9.1% for customers within the city.

Reisman’s larger point was that the City’s largest commercial users, such as the Indian River County School District and Piper Aircraft, stand the most to gain from a sale of Vero Electric. It would have made more sense, then, for him to offer a comparison of commercial rates.  At 6000 kilowatt hours of commercial power the rate differential between Vero Electric and FPL is 10.4 percent, with the City charging $743, and FPL charging $665.50. At 10000 kilowatt hours of commercial use, the rate differential is 10.2 percent, $1099 for Vero Electric and $986.50 for FPL.

Reisman remains silent on the fact that the Florida Public Service Commission has already approved rate increases for FPL to take affect later this year and again in 2018.  Once these rates increases are in place, FPL customers may well be paying more for the electricity than customers of Vero Electric.

Reisman did make one good point. He wrote, “FPL’s bid must be carefully analyzed by city officials, council members, consultants, advisory commissions and the public. The city cannot continue to make mistakes it has made in the past regarding electricity.”

Last Tuesday, Councilman Harry Howle dismissed the value of receiving input from the advisory commissions. Given his dismissal of the role of the commissions, he can hardly be expected to support hiring consultants to review FPL’s latest proposal. Most likely, Howle, along with Laura Moss and Lange Sykes, will vote this coming Tuesday to accept the terms outlined in FPL’s latest offer. They will claim they are agreeing to a non-binding letter of intent, but the die will be cast. There will be no meaningful negotiations. And who could expect otherwise. Howle, Moss and Sykes were all elected with significant support from FPL.

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