BELLEAIR - Whatever the prospects are for the Town of Belleair to proceed with its own independent electric supply, Progress Energy has not given up the fight to retain the town's residents as customers.
In April, it appeared that Belleair was well on its way to having its own electric company. An analysis by a consultant in March gave optimistic figures for the town to forge ahead. Legal problems were out of the way.
All that remained, so it seemed, was that the Town Commission give its go-ahead and then put the question to referdundum. A referendum is not legally necessary, but the town leadership wants citizen approval in embarking on what is a huge undertaking.
But then, Tuesday evening, Progress Energy appeared to be back in the picture.
Gail Simpson, PE's manager of public policy, accompanied by David Phillips, regional vice president, gave a presentation to the Town Commission arguing for the continuation of service by Progress Energy.
In part, the presentation was rebuttal of what the town's ad hod Electric Franchise Committee and Finance Board heard back on April 13 from the consultant.
Things aren't as rosy as painted by the consultant, Simpson said. Also she said it was important to look at other factors as well as numbers. She emphasized service and the strength of Progress Energy to cope with any unusual and tough situations.
One measurement PE likes to use is reliability, which is defined by the company as the average number of minutes a customer is without service in a year.
Company wide, the average is 85 minutes. In Belleair, it is 60 minutes according to Aaron Perlut, who works in public relations for PE.
Simpson gave the Town Commission figures Tuesday that showed a possible loss in the first year of operation under a model where Belleair had its own independent company.
She said the rates ascribed to PE as given by the consultant were not correct. If the correct rates are used, Simpson said, it would show a total net loss of some $65,000 for Belleair in the first year.
Three main issues were cited by Simpson. They were rates, the acquisition of wholesale power and operation maintenance cost.
She said PE rates are favorable, wholesale power costs are very volatile and that the operation maintence would be more than estimated.
Simpson said in the context of PE's greater economy of scale, Belleair was safer economically with Progress Energy.
One of the persuasive sweeteners offered to the commission by PE was an indication that the power company would help cover some of the town's legal expenses when it was engaging in litigation (which it won) with PE.
Belleair won the legal fight by having a court grant its plea for arbitration over the cost of buying PE's infrastructure, which, the town asserted, was part of the 30-year agreement that was ending.
The arbitration resulted in a ruling that Belleair would Progress Energy $8,500,000 for such things as the system's value, separation and integration and stranded costs if it ultimately decides to go into business for itself.
Add in some other costs and Belleair would put itself in debt to the tune of $9.3 million that will be paid over 30 years, the funding to come from electric income itself.
Because they would be revenue bonds, they do not pledge the security of the town and re-payment is budgeted out of the revenue of the electric enterprise.