POLL: Is Marco footing the bills for other LCEC customers?

Without oversight, study the only way to know

Should Marco study electric subsidization?

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— 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.

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Comments » 15

marcoislandres writes:

Some might say that Marco is being subsidized by other LCEC customers each time we have a hurricane. One of the reasons Florida is livable in the summer is because of reliable electric service and how fast it comes back on after a major hurricane. Good luck getting that kind of service if Marco takes over.

playballonK writes:

The fact this corrupt idea has not gone away yet proves this is extremely vital to the Good Ole Boy Network on this island.
What next, Waldack calling it the 'save our children' pr.

MarcoJimbo writes:

Subsidization-Councilman Trotter and others seem to feel that we are not getting full value for the money we pay LCEC for electric service. Does Mr.Trotter pay insurance premiums? Despite my personal feelings on that matter, I know that in the event of a catastrophe I will be made whole with no extraordinary out-of-pocket expense on my part. If the City were to take ownership of the island's electric system, and if it was severely damaged by a storm or other catastrophic event who would be "on the hook" for the cost of repairs? You guessed it-You and me. I don't know about you, but I sleep a lot better on a big boat. Please Bill, don't rock the boat.

OldMarcoMan writes:

Is their any way we can underground people who just complain about everything and refuse to move back to where ever they are from?
When I'm not useful any more and they put me on welfare, I mean Social Security I'm moving to Jersey because everything must be perfect in that State.

Fossil writes:

Mr. Arceri's observation that "the incorrect impression that government oversight is protecting Islanders from any subsidization" is indeed a factual statement. The statement is also relevant as to the perceived subsidization that homeowners provide for re-use water production. Re-use water is a product produced by a City owned utility and is primarily used by hotels, condos and time share facilities. The City also benefits from this product to keep much of it's property green. Homeowners pay primium potable water rates to maintain their lawns because the city cannot produce enough re-use water to accomodate homeowners. Users of re-use water should pay full production and delivery costs of re-use water. Certianly, customer class (homeowners) should be a concern here. Or how about all those new sewer customers? Newer customers see all the brand new investment in the treatment plants and replacement of old pipes and feel they are footing the costs for improvements and maintenance that benefit and serve older customers (including hotels, condos and time share units). Let's have a study to see if homeowner water and sewer rates are subsidizng re-use water or one to see if the new sewer customers are subsidizing the improvement and maintenance costs for all those old sewer customers. We need to ensure there is no unacceptable "class" (read homeowners), subsidization taking place in City owned utilities and the products they produce, before we waste money designing ways to document another takeover of major utility. The City should get it's own house in order and pay a consultant to do a study on these issues before we look at LCEC. Maybe such a study will result in a reduction in existing homeowner water and sewer rates. Yes, let's give our citizens some government oversight.

MrBreeze writes:

Great observation Fossil. With the takeover of the utilities, I see the long term plan of the "resort comminity" which leaves no room for the small guy. This along with the bridge expansion will further along this mindset. The city should have had the forsite to run supply mains along with the sewer mains for the STRP program for centralized irrigation with re-use treatment water. That way all could benifit and the STRP costs would have been offset. How does the city believe running the electric utility would benifit the community when they still have to purchase the power. I see its just a further way to place fee's on residents and create jobs for "hang around cronies".

dougenman writes:

My opinion is that subsidization goes on all the time. The big areas that come to mind are schools, roads, insurance, tolls, sales tax, property tax and income tax.

The LCEC portion of it, if any, is minimal and not worth another dime of taxpayer money to study. In the long term view; when our end of the electric grid wears out the newer end of the grid will subsidize us. It's time to stop being penny wise and pound foolish.

Doug Enman

dc5799 writes:

Wayne is writing to the sun times now. Does this mean the eagle has stopped publishing his letters?

marcoredeagle writes:

General Rule of Capitalism: Businesses, to stay in business, need to charge people equally and often people feel exploited.

If I take the John Arceri view ... brilliant view John!!!! ... because I have no kids then I don't have to pay real estate tax to Collier County for schools. I'm subsidizing someone else's kids. HOW DARE THEY? THIS ISN'T FAIR.

John Arceri, the world isn't fair. And why does the counsel continue to waste taxpayers money continuing to take over LCEC?

happy6 writes:

why change something that works? and works well...
we are a finite size and can have a finite number of residents...and this finite number of residents can only pay so much....now joel is promoting cisterns at $5000 minimum each...we could have had reuse water lines put in for $1,500/lot...but the answer back then was the people wouldn't pay the extra for the reuse lines...now we're trying to put in third world countries water systems to water the yard....are you kidding me?....i';m sure monte or ed will weigh in on this topic with their s----- analysis.

MrBreeze writes:

I would have been happy to pay 1,500 for a reuse water line. I feel we were cheated out of that chance to lower our water bills. Furthermore, why was not the thought of a "liquid Only" for the sepitc systems and leave the tanks to be cleaned on a maintence schedule that has been done in other water surrounded communities. The fee would have been 1/3 and solid waste would be contained by the system the homeowner paid for. Now the sewer is in and the tank and costs are gone and the treatment capacity has to increase. It was just poor planning, but as I see it the city owned property is very well watered at night when you drive down Collier like it is the vegas strip.

sailingalong writes:

Wake up folks. This is just another Camel's nose under the tent program. We will have this study, then another one, then we will file a lawsuit in order to get some records, then we will expand the lawsuit and then there will be more claims and more legal actions. Someday, hundreds of thousands of dollars from now, the council will discuss if they want to go to referendum. We will once again hear the Tucker rational that "This is too complicated and important a decision to allow the voter to make. That is why we get paid the big bucks." The Arceri controlled council will then decide that the city has invested so much money it would be foolish not to pursue acquisition.

This is just the first stop on a long, well organized railroad ride.

playballonK writes:

Marcronie Island

MrBreeze writes:

Why do we allow this Arceri guy to even be involved. Is he elected, or employed by the city? I do not see why if everone knows whats up then how come it continues?

Fossil writes:

MrBreeze, he is not elected but appears to control at least four elected councilmembers. The fleecing of our citizens continues and is traceable to a few promonent businessman in our community. These men fund and use the services of this guy and his four go to guys on the council to advance their vision of Marco Island's future. This will continue until the voters finally smarten up.

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