Florida Municipal Power Agency (FMPA) Lost $ 247 Million from 2003 to 2014

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EVERYONE IS WOUND UP ABOUT THE FLORIDA MUNICIPAL POWER AGENCY.  

At the Taxpayers’ Association of Indian River County luncheon on Wednesday, July 7, “getting out of it” was one of the hottest topics (due to its excessive electric charges).  Representative Debbie Mayfield seriously addressed it and Mr. Lang Sykes and Attorney Erin Grall, candidates for Ms. Mayfield District 54 seat, emphasized that getting their hands about it would be one of their highest priorities.

The City of Vero Beach seems to be “stuck” with FMPA for roughly 40% of it’s power supply.  By being stuck, as City Manager James R O’Connor wrote in a June 3, 2015 memorandum to the Vero Beach Finance and Utilities Commission, “The FMPA contracts have been validated, in accordance with the Florida Statutes, by the Florida Courts, and accordingly, and efforts to modify them are at best impractical, and probably impossible.

Meanwhile, as you most likely know, in March, 2015 the Auditor General of the State of Florida conducted an “Operational Audit” of FMPA which “disclosed the following:”

  • “Fuel hedging activities were not consistent with industry practices utilized by the joint agency activities.
  • “Investment in natural gas exploration and drilling were not consistent with industry practices utilized by other joint action agencies and were more complex and involved more risk than alternative forms of hedging commonly practiced.”
  • “Certain interest rate swaps were not consistent with industry practices utilized by other joint agencies, which resulted in significant termination fees likely to be incurred.”

The Operational Audit can be found with this link.

http://fmpa.com/wp-content/uploads/2015/03/2015-165-Auditor-Generals-Report-and-FMPA-Response.pdf

On page 11 of the Audit it lists how much the FMPA lost each year from 2003 to 2014.

Mr. Guarriello became CEO of FMPA in September 2008. From 2008 to 2014 FMPA lost roughly $ 237 mil. From 2003 to 2007 they lost roughly $ 10 mil.

According to Bloomberg, “Mr. Nicholas P. Guarriello serves as the Chief Executive Officer and General Manager of Florida Municipal Power Agency. Mr. Guarriello serves as a Principal R. W. Beck, Inc. He served as the Interim Chief Executive Officer of Florida Municipal Power Agency since September 2008. He has experience providing services to joint action agencies, including playing a key role in the formation of FMPA. Mr. Guarriello has more than 30 years of experience in the utility industry. He served as the President and Chief Executive Officer of R. W. Beck, Inc. from 1998 to 2005.

He served as Project Manager and Principal-in-Charge for numerous power supply studies, bond financings and contractual analyses and negotiations, including those relating to joint ownership agreements and litigation support services for FMPA. Recent assignments include leading the development of FMPA’s 2008 Integrated Resource Plan. He serves as a Vice Chairman and Director at Public Gas Partners, Inc. He is a registered Professional Engineer in the State of Florida. Mr. Guarriello holds a Bachelor’s degree in Electrical Engineering from Polytechnic University, New York, and a Master’s degree in Business Administration from New York University.”

FMPA was established in 1978. So from 1978 – 2008, perhaps Mr. Guarriello was a consultant for FMPA, inasmuch as Bloomberg states he played “a key role in the formation of FMPA.”

This is from Water and Wastes Digest about R. W. Beck: “Areas of specialty include management and technical consulting, financial analyses, risk management, owner’s engineering and advisory services, litigation/arbitration/mediation support among others.”

Since Mr. Guarriello reports to a Board of Directors that would have presumedly approved important decisions, such as those highlighted above, we have been urged to write Mr. Guarriello a letter to request public records of Board meetings that must exist in a digital format, to determine who Vero Beach Board Members were during these years and how they voted. Next week we will summarize how FMPA has responded to the “Operational Audit.” 07072015 Letter to FMPA

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