Lower FPUA Rates A Political Red Herring
October 20, 2009 by Ed Tsunoda · Leave a Comment
You know it’s election season in Fort Pierce when campaign signs and media coverage start to focus on Fort Pierce Utility Authority rates and promises to lower them. Unfortunately, those promises are never kept, mostly because the Mayor and the City Commission don’t really have control over the rates. Energy is expensive.
The 2007 election season featured a Mayoral candidate in Rick Reed who ran on lowering utility rates, including having people show up with ‘pink slips’ from the FPUA at City Commission meetings, and using auto dialing ads saying, “If you think your electric bill is too high, vote for Rick Reed”. Reed is running for a Commission seat this year, and his signs around the city again are promising lower utility rates.
Sitting Commissioner Reggie Sessions won his seat in 2007 also running on the promise of lower utility rates. Sessions has been repeatedly frustrated over the last two years, trying to get something done to fulfill his campaign promises, but finding the political will in the city to be lacking. Sessions to his credit tried to use his influence as a Commissioner initially, then voted against rate hikes unsuccessfully, then tried to start a campaign to get enough signatures on a petition to give the City Commission more power to do something, an effort which also failed.
The problems lie in the areas of your utility bill that aren’t really even under FPUA’s control. The FPUA belongs to the Florida Municipal Power Agency which purchases the fuel on behalf of 30 something local utility companies in Florida in bulk. They negotiated a long term purchase rate for the cost of fuel, that FPUA and other local Florida utility companies are locked into, even though prices for fuel have dropped. That’s the “Fuel Cost Adjustment Charges” you see on your bill. The contracts between FPUA and FMPA and the fuel providers are exceeding difficult to get out of. FPUA would have to give 30 years notice to avoid astronomical penalties.
“We acknowledge our electric rates are high at this time,” FPUA Director Bill Thiess said. “But there’s nothing we can do about them. The FMPA is bound to that set price until September at which time electric rates should go down.”
The city does have the ability to lower utility rates by giving back or refusing to take moving forward, the 6% of revenue that they receive annually from the FPUA, which adds up to around $5 million a year. However, that $5 million represents a significant chunk of city revenue, and would undoubted result in reduced services and or higher taxes to cover the shortfalls, and would only create a roughly 6% savings on FPUA customers bills. So pick your poison, lower utility rates and higher taxes, or lower taxes and higher utility bills.
The possibilities for actually lowering consumers bills are limited. It makes for a compelling campaign promise, because everyone feels hit by rising fuel costs and utility bills are certainly an easy place to see it. But the reality is that the Mayor and the City Commission really have very little control over the rates, and wouldn’t have much more control even if they took over administration of the FPUA. As a political platform it isn’t much to stand on and will leave candidates at best frustrated like Commissioner Sessions has found himself, or at worst perceived as having made empty promises to get elected.
