LCEC responds to city reinstating complaint to Public Service Commission
LCEC has responded to the city last week reinstating its complaint filed with the Florida Public Service Commission back in the spring by notifying City Manager John Szerlag of its latest position.
In a letter to the city, LCEC CEO Dennie Hamilton wrote that on May 15, 2017, LCEC will terminate its implied franchise agreement contract with the city. The 30-year agreement expired on Oct. 1 and the terms of the agreement will continue as before.
“To the extent that an implied contract of indefinite duration arises after our previous franchise agreement expired,” Hamilton wrote, “this letter provides formal written notice that in 180 days LCEC will terminate any such implied contract. Notably, any claimed option for the city to purchase LCEC property within the city that may have arisen under Section 3 of the expired agreement will no longer be in effect upon termination.”
That action will no affect the delivery of electricity to LCEC customers.
“We will still pay the franchise fees to the city,” said LCEC public relations manager Karen Ryan. “For our customers, we will not stop delivering electricity at all. LCEC is a not-for-profit electric cooperative and it is important that the franchise agreement issue not impact our members indefinitely.”
City negotiator Stuart Diamond said he is willing to continue negotiations and will contact LCEC to see if it is willing, too. LCEC has taken the stance that it will not negotiate an agreement simultaneously while defending a complaint against it.
“The City decided five months was enough time to negotiate since there wasn’t any movement in the talks on three specific areas – streetlights, electric rate and equity issues,” said Diamond. “The city wants a modest concession from LCEC on the equity, especially giving the equity to the heirs of someone who has died and not make them wait seven years. The city wants that to be 60 days or so, which is increasingly the practice all over the nation.”
LCEC is holding $9 million of equity from the city, which is LCEC’s largest customer and Diamond said the city got back only $120,000 in equity last year.
“Because of the dynamics of the two parties, five months was not enough time to get an agreement,” said Diamond. “On paper, it seems an agreement would be pretty easy.”
Diamond thinks the PSC decision may take a couple or three months, perhaps sooner if it determines that one of the parties has a weak case.
“We remain hopeful that upon final resolution of the city’s complaint to the PSC, that we can quickly work toward a new franchise agreement that protects the interests of our members and citizens of Cape Coral,” said Ryan.