MARCO ISLAND — When it comes to electricity on Marco Island, studies that make a person stutter seem to be the names of choice. First it was municipalization, in which the city would study the costs and benefits of Marco Island taking over the electric utility, Lee County Electric Cooperative.
Now the topic is subsidization. Is Marco footing the bills for other LCEC customers?
Barry Moline, executive director of the Florida Municipal Electric Association, was cited in the April 24 issue of the Marco Eagle, on page 8, as having said that the Florida Public Service Commission reviews LCEC rates and ensures there is no unacceptable subsidization taking place.
John Arceri, a former City Councilman with more than 30 years experience in electric utilities, said the statement gives the incorrect impression that government oversight is protecting Islanders from any subsidization.
Moline clarified the issue. There is no oversight for subsidization in the sense that City Councilman Bill Trotter is suggesting.
Moline said that the Public Service Commission only reviews rates and subsidization between customer class, such as between residential, commercial and industrial.
Trotter however was suggesting subsidization should be reviewed to determine if Marco is subsidizing growth in other areas LCEC serves, such as the developing Ave Maria. There has been no government oversight of LCEC in this sense.
For Marco to challenge the rate structure, the city would first have to show the commission that LCEC is being unfair before the Florida Public Service Commission would investigate, said commission spokeswoman Cindy Muir.
Moline described subsidization of growing areas by fully developed areas as a possible two-way street.
“When you look at subsidization within a customer class, there are issues that cut both ways. For example, newer customers see brand new investment, and that might look like older, existing customers are footing the bill for expansion. However, the electric facilities that serve older customers also require maintenance and replacement, and to the newer customers, that is a cost,” he wrote in an e-mail to the Eagle Friday.
“The cost and subsidization debate can both ways. The only way to understand these costs is to analyze it in detail,” Moline added.
Trotter is requesting City Council review the possibility of an electric subsidization study at the 5:30 p.m., May 4, council meeting at City Hall, 51 Bald Eagle Drive.
Trotter says a subsidization study will be separate from the municipalization study and possibly lead to either lower electric rates or lower cost to underground rather than a city-owned utility.
Trotter is continuing to work with LCEC on establishing the pilot program to underground electric wires in the Barbados area of the Island.
The costs estimates by LCEC for putting overhead electric wires underground has been a point of contention with Trotter over the last year or two years.
“Undergrounding” and municipalization were separate issues, he said.
“As unrelated as they are, it has been a driving force for other cities to look into municipalization,” Trotter said.
See Trotter’s news submission in a related story to the left regarding the idea of a “subsidization” study versus the “municipalization” study, which is going before council Monday and was estimated to cost about $20,000 for the next phase. He estimates a subsidization study to cost about half the price of a municipalization study.