Indian River Shores vs. Vero Beach Electric — Vero Beach, Florida

The arrangement predated the town's complaints by decades. According to a Florida Public Service Commission staff memorandum in Docket No. 160049-EU, dated June 23, 2016, Vero Beach began providing electric service to Indian River Shores residents before 1968, when the town asked the city to supply water and electric power under the 1968 Contract. In 1986, Indian River Shores and Vero Beach entered into a 30-year franchise agreement that gave the city the exclusive right to run an electric system in public places in the part of the town south of Winter Beach Road.

The boundary itself came from Tallahassee. The same memo lists four PSC territorial orders, issued in 1972, 1974, 1981 and 1983, and 1988, approving agreements between Vero Beach and Florida Power & Light that divided the service area. Everything north of Old Winter Beach Road in the town was served by FPL, Veronews reported in March 2016, while everything south of it lay in Vero Beach territory.

The split put neighbors on different bills. When the town sued in July 2014, Vero Beach 32963 reported that of the 4,239 electric customers in the Shores, 739 in the north end were served by FPL and 3,500 in the central and south parts paid Vero Beach rates about 30 percent higher, roughly $2 million a year in extra charges. By May 2016, Veronews put the split at 80 percent of Shores residents on Vero Electric and 20 percent on FPL.

The town's legal argument went beyond price. Indian River Shores officials said town residents had no vote in Vero Beach elections and so no voice over the utility that set their rates, and that electric profits were subsidizing Vero Beach city government, according to the 2014 Vero Beach 32963 account of the lawsuit and later Veronews reporting on town hall meetings held in the Shores Community Center in 2016.

The opening move was a letter. By letter of July 18, 2014, the PSC memo records, Indian River Shores told Vero Beach it would not renew the franchise agreement when it expired on November 6, 2016, and that after that date the city would no longer have the town's permission to use its rights of way. The town filed suit the same month, which triggered a mandatory 100-day conflict resolution process between the two governments; mediation failed in 2015.

The circuit court sent the core question to the PSC. On November 11, 2015, Circuit Judge Cynthia Cox dismissed three of the four counts, and the Indian River Guardian reported that she let stand only the claim that Vero Electric's rates were unreasonable. The PSC memo summarizes the key ruling: the court dismissed the claim, finding that the relief requested is squarely within the jurisdiction of the Commission. The Guardian traced that authority to 1974, when the Legislature passed the Grid Bill, vesting the PSC with superior and exclusive authority over electric service territories, and reported that the case had cost Indian River Shores taxpayers more than $600,000 by then.

The town took its case to the PSC in two steps. It filed a petition for a declaratory statement on January 5, 2016, and on March 4, 2016, a petition asking the Commission to modify the territorial orders based on changed legal circumstances under Article VIII, Section 2(c) of the Florida Constitution, arguing that Vero Beach could not serve inside Indian River Shores without the town's consent once the franchise ended. Because the town itself is not a utility, Veronews reported, it filed as a customer, citing Town Hall and other facilities served by Vero Electric.

Each side read the expiring franchise differently. Vero Beach argued that its PSC-awarded service territory was effectively permanent whether or not a franchise existed, while the town said it had only temporarily assigned electric service to Vero Beach. In 2015 the Indian River Shores Town Council also passed an ordinance claiming power to regulate Vero Electric rates after the franchise ended; Veronews reported in May 2016 that the two governments tentatively agreed to postpone that ordinance, with up to a year's notice before any use, and to place the town's rate lawsuit in abatement while the PSC case moved forward.

Indian River County ran a parallel case over its own franchise, which expired in March 2017, appealing a PSC decision to the Florida Supreme Court, which heard arguments in December 2015, according to Vero Beach 32963. The Indian River Guardian later reported that the county's argument was rejected by the state's highest court. On September 13, 2016, the Guardian reported, the Florida Public Service Commission today denied the town's request to modify the long-standing territorial orders establishing Vero Electric's service within Indian River Shores. The town had already agreed in June 2016 to end its circuit court battle with Vero Beach over rates, Veronews reported.

Money, not litigation, ended it. In September 2015, after FPL offered $13 million for the Shores customers, Vero Beach 32963 reported that Vero Beach countered at a mind-distorting $66 million, later trimmed to $64.5 million. By 2016 FPL's offer stood at $30 million, made up of $27 million from FPL and $3 million over three years from Shores residents through a surcharge, according to Veronews. The Vero Beach City Council rejected it in August 2016 and said it would entertain an offer at $47 million.

The November 2016 Vero Beach election changed the math. The franchise expired on November 6, 2016, and the new council began with a 4-1 vote to pursue the partial sale, Vero Beach 32963 reported on December 1, 2016. That deal was then folded into a sale of the whole system: in October 2017 the Indian River Guardian reported that the $185 million purchase and sale agreement with FPL would obligate the City to a partial sale, if a full sale cannot be completed.

The full sale went through. On June 5, 2018, the PSC decided FPL should serve the Vero Beach utility's roughly 35,000 customers in the city, a portion of the Town of Indian River Shores and part of unincorporated Indian River County, according to a PSC release. The Florida Municipal Electric Association, reposting the News Service of Florida, reported that final PSC approvals on November 27, 2018, ended the territorial agreement between the city utility and FPL, and FPL completed the purchase in December 2018, putting all of Indian River Shores on one provider.