Press Journal: “Vero Unloads on Energy Group”

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SURELY YOU READ THE JULY 15, 2015 ARTICLE IN THE PRESS JOURNAL by Scott Wyland that “Vero Unloads on Energy Group.”

You may have also read Mark Schumman’s remarks in InsideVero that 32963 columnist Lisa Zahner “spent much of her ‘analysis’ serving up the Orlando Utilities Commission’s objections to Vero Beach’s decision to exercise its right to seek alternatives to a multi-decade deal gone bad…(but) made little mention of the counterarguments in Vero Beach’s response to the OUC.”

This is not to re-report Mr. Wyland’s article, or Ms. Zahner’s, but to provide further details on the City’s letter of response to the Orlando Utility Commission’s (OUC) threat to sue the City for it’s “Go to Market” strategy for lowering its electric rates.  Vero Beach purchases approximately 60% of its power from OUC.

At their June 16, 2015 meeting where the City Council voted unanimously to issue a RFP to test the market with other utility suppliers to determine what the market is and then go back to OUC with those numbers for further negotiation of OUC’s electric rates. If the City doesn’t get where it needs to be then it would make the next move.

According to Attorney Robert Scheffel Wright, representing the City of Beach, the Go To Market scenario would represent a $ 30 – 34 million nominal dollars/$ 20.4 net present value savings over OUC’s latest offer.

Attorney Wright, Wayne R. Coment, City Attorney and John R. Frost II, of Frost Van den Boom, PA fired back to W. Christopher Browder, VP and General Councel of OUC over their threat to sue the City in their letter of July 13, 2015.  Here are several salient points from their letter.

“Contrary to your assertion, the City has not ‘confirmed’ any attempt to breach the PPA (Power Purchasing Agreement). Rather, the City has issued its RFP to obtain information regarding power supply alternatives that are available to the City.  No breach or default would occur, if at all, until the City were to cease purchasing and and paying for power pursuant to the PPA.

The City rejects OUC’s novel theory that a potential supplier, e.g. a Bidder who makes an offer in response to the City’s RFP, can be liable for tortious interference with any rights of OUC.  Such bidders would only be responding to the City’s invitation to bid, in a competitive process conducted by the City to evaluate its power supply alternatives available in the wholesale power market.

…the City has nothing to hide and has made OUC’s (threatening) letter available to all potential Bidders as an addendum to its RFP.

The City hereby advises OUC that OUC’s letter itself may very well constitute intentional tortious interference by OUC with the City’s prospective business advantage by virtue of its rather blatant attempt to scare off potential Bidders. Moreover, in attempting to utilize third scare tactic, the OUC may very well have exposed itself to liability for similar causes of action by prospective Bidders, whose competitive business interests are directly threatened by OUC’s Letter.

…OUC’s letter is facially anti-competitive in that it is plainly intended to chill potential suppliers from even responding to the City’s RFP, and in fact, the City has already received notice from one previously self-identified likely Bidder that it will not bid because of OUC’s letter.  Accordingly, OUC is hereby advised that the City is fully prepared to bring a claim for redress of the damages suffered by the City as a result of OUC’s anti-competitive actions under the anti-trust laws of the State of Florida and the United States of America.

If OUC does not immediately withdraw at least that portion of its purported notice threatening to sue potential Bidders for tortious interference, the City is prepared to immediately pursue any and all legal remedies.

…regarding our hoped-for resolution of this situation without litigation, the City continues to believe, as its business representatives have conveyed to OUC throughout their discussions over the past several months, that there is a business deal available that is, in fact, mutually beneficial to both OUC and the City of Vero Beach.  The City is ready and willing to continue discussions toward such a resolution…(but) it is our understanding that the City’s representatives requested such a meeting several weeks before the RFP was authorized…however, the City’s invitation was either declined or no meaningful response was ever provided by OUC.

The City appreciates your careful consideration of this matter.”

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