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Thursday, May 14, 2009

Marianna Renews Franchise With Florida Public Utilities

New 10 Year agreement is approved by City Commission
By Sid Riley
In what appeared to be a 180 degree change in attitude, in a short meeting on Thursday afternoon the Marianna City Commission unanimously approved the new ten year franchise agreement with Florida Public Utilities which the utility had submitted to the Commission.
At a public workshop meeting only a few days earlier, Commissioners Wise, Roberts, and Clay had publicly stated they were in favor of denying the renewal and proceeding with placing the issue before the voters in the City for determining whether or not the Commission should pursue purchasing the utility and creating a municipally owned and operated electric utility in Marianna. Since the Commission has voted to renew the franchise, there will now be no referendum on the matter.
The change in attitude came after receiving recommendations on the issue from a special working committee created by the Commission to assist them. This special committee was comprised of Bill Stanton, Director of JCDC, Jim Dean, City Manager, Frank Bondurant, City Attorney, and Kim Gainer, City Finance Director. This group led the negotiations with the management of FPU on the new franchise contract.
At the commission meeting, prior to the official vote, Mayor Jim Wise stated that since the new agreement provided for ‘Peak Demand" industrial rates, and FPU had met all of their other demands, he was now in favor of renewal. Commissioner John Roberts stated that he favored renewal since the rate of return was not that great, based on the projections made by the city’s consultant, Bill Herrington. Commissioner Roger Clay stated he agreed with Wise and Roberts on those issues and he too was prepared to vote for renewal of the agreement. Commissioner Paul Donofro stated that he was against consideration of purchasing the utility because of the extreme uncertainty in our economy.
The new franchise is almost a carbon copy of the previous franchise, except for a few significant changes. Due to the drastic rate increases which have been made by FPU over the past eighteen months, many felt the previous flat rate structure would make future attempts for industrial recruitment very difficult. Thus, the city has demanded that a new "peak demand" rate schedule for key industrial users be implemented within the next twelve months. This will give some relief to key industrial users such as Family Dollar, but will do nothing to ease the burden of electrical bills to residential customers.
Another change provides for assisting in the "hardening" of the electrical services for designated areas, such as the county court house. This will eventually provide for underground delivery of electrical services for these areas.
Finally, FPU agreed to reimburse the city for the $22,000 it has spent in consulting fees as it evaluated the feasibility of purchasing and operating the utility within the city.
So now it is a done deal. The citizens of Marianna will continue to purchase their electricity from Florida Public Utilities for another decade.

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