MARCO ISLAND — Resident Don Farmer, a Naples Daily News and Marco Eagle columnist and former CNN correspondent, led the “In the Round” audience at a forum on electric municipalization to ask the question “why now?” Why undertake a project as potentially expensive as looking into buying the electric cooperative when people face economic hardship?
The city’s electric municipalization committee met earlier Wednesday afternoon and the resounding question toward the end of that meeting was “why buy” Lee County Electric Cooperative, the Island’s electric provider?
About two hours later, the question of “why buy?” became “why now?” at the “In the Round” forum on the topic hosted by Orion Bank.
Farmer’s question spurred the most cheering and comments from the audience, as he geared the question toward City Councilman Jerry Gibson, also the chairman of the city’s electric municipalization committee and John Arceri, a former City Councilman who Farmer described as a person “of influence.”
The audience, many rising to their feet, clapped and echoed: “Why now?”
Gibson’s response was “why not?”
Gibson also said he believed Farmer’s question was “putting the cart before the horse” because so far the city has not spent money to look into the idea. City Council approved $100,000 in the budget for a consultant to look into the viability of the city purchasing or taking over LCEC by eminent domain, but the committee chose to begin preliminary work on its own without hiring a consultant.
He also said it has not been determined whether a city-run electric utility may bring money into the city.
“Why are you people so afraid of facts?” Gibson asked the audience.
The “In the Round” panel included LCEC’s CEO Dennie Hamilton, Barry Moline, executive director of the Florida Municipal Electric Association, Gibson, and Arceri, a former City Councilman who was among the primary negotiators for the city with LCEC regarding plans to put the Island’s electric wires underground.
Moline fielded many questions on the pros and cons of a city-run electric company and came with many examples from the 34 cities which are members of FMEA and operate their own electric companies.
Arceri, who has decades of experience in electric utilities from New York state, offered why he believed it was a viable idea to look into municipalization and to negotiate with LCEC for rates and for underground pricing. He said he believes Marco “subsidizes” the other areas in the electric cooperative.
Hamilton said selling to Marco Island was “not in the best interest” of any of LCEC’s customers, including Marco Island.
Electric as a new tax
“We are convinced the citizens of Marco Island would pay higher rates to the city for the same service they have now through LCEC,” Hamilton said.
He reiterated that LCEC’s customers are also the owners of the coop. He added that he did not believe Arceri’s claim that Marco subsidized other areas was valid.
Hamilton said in years where there were storms on Marco and when there were significant capital improvements to the Island’s system such as in 2003, other areas may have contributed more to the cooperative than Marco. There are four service areas which are more dense and purchase more electric than Marco within the cooperative, Hamilton added.
He also said if Marco is looking to earn money from sources other than property taxes, they may legally charge a 10 percent fee on customers’ electric bills.
“I don’t want to be a tax collector,” Hamilton said, adding that he would do that if the city requested.
He said he saw the issue as a way of “hiding funding for the city through electric rates.”
The audience came back occasionally and repeated “why now?”
Arceri answered that it is a “longterm issue” and it may be a possible solution to the city’s financial troubles as property taxes are not generating the money they used to for the city due to declining property values.
The idea of Marco Island being LCEC’s “cash cow” was the impetus for the research. Arceri said if he had a goal it would be to negotiate a savings for Marco Island, either in rates or undergrounding.
Resident Ron Dick, also a part-time Canadian resident, was among many at the meeting who thanked LCEC for providing relatively low rates with reliable service.
Carl Haeussler Jr., a resident and Island Realtor, said he appreciated LCEC and said anyone from up north likely knows the value LCEC provides with rates lower than in northern states or Canada.
“If it works, don’t fix it,” Haeussler said.
Hamilton addressed several questions from residents looking for more detailed information on how LCEC came to the conclusion that they don’t want to sell and it’s not in Marco residents’ best interest.
He said LCEC was not required and had no motive to hire anyone to discover the value of Marco’s segment of LCEC, such as infrastructure and the depreciation of it.
Hamilton shared that LCEC brings in $370 million in annual revenues and profit margins are allocated back to members in proportion to the energy used. Marco Island accounts for about $35 million of annual revenues, he said. LCEC has 193,000 customers and Marco has about 18,000 customer meters, Hamilton said.
“The city’s committee has not asked LCEC for one piece of information,” he added.
Moline said from his observation the committee is “leaving no stone unturned” as they work to gather impartial facts.
Hamilton also accepted an invite from the electric municipalization committee to give a presentation on LCEC.