LCEC greenlights Cape franchise agreement
A new franchise agreement between the city of Cape Coral and its utility services provider got the first of two required approvals Thursday.
The LCEC board of directors unanimously approved the proposed pact, giving Executive Vice President CEO Dennie Hamilton the authority to sign the agreement.
The signature is contingent on Cape Coral City Council approval on Monday and whether the ordinance is approved as proposed.
If Council OKs the latest effort, it will signal the end of a messy two years that have cost city taxpayers and LCEC ratepayers more than $1 million in legal fees and other costs.
“I’m very enthused it took place,” said Mayor Joe Coviello, who negotiated the latest round on behalf of the city. “My hopes are that they (fellow Council members) will approve it, and we’ll have an agreement moving forward.
“It’s one of the top accomplishments of not only myself but council as well,” he added. “I believe I was able to put something together that is fair and equitable to everyone.”
LCEC spokesperson Karen Ryan said the electric co-operative is happy with the result.
“We can’t wait to start working together and putting this all behind us,” Ryan said. “A lot of credit goes to a lot of people. The mayor and Dennie deserve credit for being willing to sit down and talk about it after so many years.”
It was a costly battle, with city ratepayers and taxpayers paying the legal fees for both sides.
From mid 2015 to date, the city’s legal expenditures alone have totalled $577,634.
Previous LCEC estimates have topped $1 million in legal costs however Ryan said Thursday that after asking the accounting department to get a more definitive number, the total is likely to be more in the $600,000 range.
Figures do not include staff time taken up in the often acrimonious on-again, off-again talks that have included the city filing a complaint with the Public Services Commission, threatened lawsuits, and a reach out to FPL to see if the utility would consider purchase if the city bought LCEC’s in-city assets as allowed in the previous franchise agreement and then “flipped” the buy over to the larger supplier.
Among the items in the new agreement are:
* 20-year term with an automatic 10-year renewal unless either side wishes to amend or terminate the agreement 180 days in advance of the extension.
* The franchise fee to be paid by the utility and passed through to customers will be locked in at 3 percent for five years, after which the city will have the option to raise it to a maximum of 4.5 percent. After the 10th year, the maximum rate would be 6 percent.
* The city will also have the option to purchase electricity from a third party, provided LCEC is notified in writing. LCEC will have 90 days to match the offer.
* As far as technology, which was a sticking point for both sides, LCEC will “monitor new and emerging technology developments to operate as efficiently and effectively as is financially justified,” according to the agreement.
* LCEC will also offer customers with qualified renewable energy systems the opportunity to sell excess energy back to LCEC.
Also, the city and LCEC would work together to hash out new technology, with LCEC determining the cost benefit of it.
Cape Coral City Council meetings begin at 4:30 p.m. in the Council Chambers at City Hall, 1015 Cultural Park Blvd.