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Florida Supreme Court tries to untangle utility dispute

In a case being watched by local governments and utilities, the Florida Supreme Court heard arguments Thursday in a dispute about who should provide electric service in unincorporated areas of Indian River County.

The dispute between Indian River County and the city of Vero Beach centers on whether unincorporated areas will continue to receive electricity from a city-run utility after what is known as a “franchise” agreement runs out in 2017. The county wants to cut ties with the city utility, but the Florida Public Service Commission sided with Vero Beach this year.

A key part of the case involves the state’s longstanding practice of designating territories for utilities to serve, preventing duplication of costly electric systems. The Public Service Commission said Vero Beach’s designated territory includes the disputed unincorporated areas, effectively trumping the franchise agreement, which details issues such as the use of county property and fees paid to the county.

Floyd Self, an attorney for the county, argued Thursday that the Supreme Court should reject the Public Service Commission’s position. He said Indian River County has the “fundamental, exclusive and primary authority to select the electric service provider” for the unincorporated areas.

“The Public Service Commission does not have the authority to pick electric service providers,’’ Self said.

But Kathryn Cowdery, an attorney for the Public Service Commission, said a franchise agreement does not determine who provides electric service and that the county can’t choose another utility after the franchise agreement ends in 2017. Such a change could occur, however, if a request was made to the Public Service Commission to change utility territories and the commission ultimately agreed, she said.

“They [county officials] do not have the authority to choose an electric service provider,’’ Cowdery said. “They do not have that authority.”

While the case focuses on the Treasure Coast county, it could have broader implications for other parts of the state. The Florida Association of Counties, the Florida Association of County Attorneys and Escambia County, for example, filed a friend-of-the court brief on behalf of Indian River County. The Florida Electric Cooperatives Association, meanwhile, filed a brief backing the Public Service Commission’s position.

The Supreme Court typically takes months to rule in such cases. While justices questioned attorneys on both sides Thursday, they appeared to express more skepticism about the county’s arguments.

Justice Charles Canady, for instance, pointed to the Public Service Commission’s legal authority to resolve territorial disputes. He questioned why the commission would have such authority if local franchise agreements can determine which utilities serve areas.

“Ultimately what we have here is a territorial dispute,’’ Canady said. “The question about who is going to serve this area is a territorial dispute in the making, is it not?”

The arguments did not focus on what utility might serve the unincorporated areas if the county ultimately prevails, though Florida Power & Light serves other unincorporated parts of Indian River County.

A brief filed in June by the county said Vero Beach’s provision of electric service has become “increasingly more contentious for those customers living outside the city” because of rates that are higher than comparable FPL rates and because of utility money subsidizing the city’s general-revenue fund.

NEWS SERVICE OF FLORIDA

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